Saying goodbye to section 21?
Mark Banham, an Associate in this firm’s property litigation team, explains the government’s recent proposals to end no-fault evictions.
The proportion of households in the private rented sector has risen to 19% making it the second most popular housing tenure in England. In light of this, the government has published its proposals for a “fairer deal” for tenants.
Most tenants let a property under an Assured Shorthold Tenancy (AST). Under the current law, landlords can terminate an AST and obtain possession of the property using either a fault based or a non-fault based procedure.
The “fault” based procedure is set out in section 8 of the Housing Act 1988 (“the Act”). By serving a section 8 notice, landlords can seek possession pursuant to certain grounds. Most commonly, landlords seek to rely on a tenant’s non-payment of rent or breach of their repair obligations.
The “non-fault” based procedure is set out in section 21 of the Act. By serving a section 21 notice, landlords can seek possession after the fixed-term of an AST ends. The notice period has to be more than two months, after which the landlord is entitled to issue possession proceedings against the tenant if they have not left the property.
The proposed change
In April 2019 the government announced its proposal to abolish section 21 notices, with the aim of preventing private landlords from evicting tenants at short notice and without good reasons.
Under the proposed change, landlords will need to serve a section 8 notice should they wish to terminate a tenancy. In order to be successful in any subsequent claim for possession, they will need to show a “concrete, evidenced reason” for bringing the tenancy to an end. Alongside this, the government also intends to amend the grounds for serving a section 8 notice, and has proposed that landlords will be able to evict tenants if they want to sell the property or move into it themselves. Little detail has been provided on how these grounds will be assessed or proved.
The proposals have been welcomed by many who recognise that the ability of landlords to evict tenants on as little as two months’ notice causes instability in family life. If the proposal is enacted, then tenants will presumably be able to stay in a property without fear of eviction.
On the other hand, the court procedure for obtaining possession under section 8 is notorious for taking longer and is often more costly than the procedure under section 21. Although the government has also promised to reform the court procedure alongside these proposals, there is some scepticism that the court procedure for serving section 8 notices will be significantly improved. There is also a risk that landlords may increase rents to protect themselves against the risk of having to undergo an expensive process to regain possession. Further, landlords who want certain tenants out are likely to assert an intention to sell or to move in themselves, even if that is not their real intention, and the policing of that will be problematic, to weed out the cynical untruths from genuine changes in circumstances.
On balance, together with the other recent changes to legislation, this has the potential to make the private rental sector even more difficult for unwary landlords.