Landlords across the UK are being thrown yet again into disarray this week as the Government announce their intention to axe Section 21 (no-fault evictions).
The concern is that without being to serve Section 21 notices, landlords could be forced to go to court to get their properties back.
There are also plans to modify Section 8, and bring in new dedicated “Housing Courts” to handle housing-related issues.
McCartan Lettings Managing Director Hannah McCartan says, “Landlords shouldn’t panic though, as it may not be a totally disastrous plan. Reform of Section 21 and Section 8 are long overdue, and if axing Section 21 opens up a constructive debate about why it’s not working in our current, broken housing system, there is hope that an improved system – which is more relevant and supportive to both sides – can be introduced in its place.”
If the Government implement the Scottish system (which replaced the Section 21 equivalent in 2012), though landlords would need grounds to evict their tenants to regain possession, they could be provided with a whole array of new grounds to allow for this.
What is Section 21 and Section 8?
Section 21 appears in the Housing Act 1988. Since its conception, Section 21 has been the preferred method for landlords to regain possession of their properties as it gives them the legal right to do so without needing to give a reason or to obtain a court order. The related notice is served to the tenant, and provides them with 2 months’ notice to find alternative accommodation and vacate.
Should the tenant not vacate at the end of the notice period, the landlord can use accelerated court proceedings, which is essentially a paperwork exercise for the courts, and no-one is needed to attend court.
Like Section 21, Section 8 appears in the Housing Act 1988, and gives landlords the legal right to regain possession of their properties – but they have to give a reason from a list of grounds. The grounds essentially break down into mandatory or discretionary grounds, and include things like the landlord needing to move back in, rent arrears, and breach of tenancy agreement. For possession to be granted on a Section 8 Notice, both the landlord and the tenant are required to attend a court hearing.
This makes for a substantially longer process for eviction. Many legal professionals advise landlords to serve Section 21 Notices instead of Section 8 for rent arrears (especially if it is unlikely any rent will be recovered) due to the speed of regaining possession vs going to court on a Section 8.
From a property investment point of view, the ability to regain possession so easily (unlike with historic Assured tenancies) proved extremely popular and reassuring when it was brought in in 1988, and became the reason behind the buy-to-let boom in the early 2000s.
Over 20% of households are now rented in the UK.
Adequate Notice, Failure to Vacate, and Revenge Evictions
Many tenants are left feeling frustrated at the news they have 2 months’ notice to leave their home without being provided with a reason to do so. Depending on their circumstances and what is available in the market at the time, two months might be very short notice, and they suddenly have to find the money to fund a move. Families are especially worst hit, with the possibility of needing to move away from school catchment areas, taking their children out of school and away from their friends.
Many landlords are left feeling frustrated when they serve the notice, their tenants don’t leave, and they are forced to start court proceedings. Citizens Advice actively encourage tenants not to vacate if they don’t want to, thus forcing their landlord’s hand and meaning their landlord is unlikely to give them a good reference when they then do move out.
There’s also the issue of “revenge evictions”. The term, coined by housing charity Shelter and the press, refers to situations where tenants complain about maintenance and are evicted because of it so the landlord can re-let the property without dealing with any of the issues.
No No-Fault Evictions
Hannah says “the fact of the matter is, most landlords love long term tenants; they want to keep their good tenants who want to stay long term, who keep the property well and pay their rent on time.
“It is a misrepresentation to say a Section 21 notice is a no-fault eviction in the real world, as most landlords only consider serving them if given a reason! In many instances, the reason could be made up of several more minor reasons that all add up to it being necessary to end the tenancy, rather than one major breach of contract, such as non-payment of rent.
“As an example, a landlord wouldn’t necessarily consider evicting a tenant who doesn’t regularly clean the property, even though failure to clean is a condition of the contract. However, if the rent isn’t always paid on time, their pet is fowling in the garden and not being picked up after, and the neighbours are complaining there are loud parties every weekend and send photographic evidence of broken beer bottles outside their front door, a landlord might feel they need to find a new tenant, even though these things don’t constitute a concrete breach of tenancy.”
According to the Ministry of Justice, the average eviction time is 298 days* – not quite the quick and easy process that lead to the buy-to-let boom!
The Residential Landlords Association (RLA) has grave concerns about the Government’s plan to modify the Section 8 process. RLA Chairman Alan Ward says the Section 8 process “requires significant improvements” before the new Housing Courts system is put in place, and those improvements will need time to bed in.
Renting Homes Act
Although these changes will initially affect only England, landlords in Wales have been told by the First Minister that the Welsh Government are set to follow suit. “Section 21” as a name, however, will not be applicable in Wales from 1st September when the Renting Homes (Wales) Act will replace the Housing Act 1988.
Have Your Say
The RLA will be launching a landlord survey on Friday this week (19/04/19) asking for experiences and important aspects you, as landlords, want to see protected amongst the Section changes. We will be sharing the link as soon as we have it.
*as quoted by HomeLet