Proposed Changes to Section 21 Notices
The process of obtaining possession of a rented property from tenants can be a fairly time-consuming and stressful experience for any landlord.
Currently, landlords can serve a “no fault” eviction notice (called a “Section 21 Notice”) on their tenants and this requires the tenant to vacate the property by no later than two months after the Notice is served. However, the Government are now seeking to abolish Section 21 Notices and move the law concerning possession claims further into the tenants’ favour.
Therefore, as well as complying with their duties that were introduced by the Deregulation Act 2015, landlords are now likely to encounter further significant obstacles when trying to recover possession of their property from tenants.
It is worth noting that currently, the Government’s proposals have not been turned into law and are going through a consultation process, so this article is purely speculative as to what the changes to the law are likely to be. Nonetheless, landlords should be aware of the possible changes and what the consequences are likely to be when trying to take possession of their properties.
Abolition of Section 21 Notices
Section 21 Notices would be abolished completely and landlords would be unable to use this procedure. This would also involve abolishing the most commonly used form of tenancy agreement, the Assured Shorthold Tenancy Agreement, and replace it with a different type of tenancy, the assured tenancy. Assured tenancies would be for either a fixed term or on a rolling monthly basis.
Tenants would still be able to end the tenancy agreement at the end of the fixed term or, if it is a rolling monthly tenancy, by giving a month’s notice. Although the landlord’s power to end the tenancy agreement would be restricted, as I will explain below.
Improvement of the Section 8 Grounds
Instead of serving a “no fault” Section 21 Notice, the Government now propose that the grounds under the fault-based system, the Section 8 procedure, are widened and landlords will need to prove one of the following to obtain possession of their properties:
The landlord wishes to sell the property.
The landlord, their spouse or partner, or family wish to move back into the property.
The landlord can show that their tenant is in at least two months of rent arrears at the time of serving the notice and the landlord has placed the tenant on notice on this. As well, at the time of the possession hearing, the landlord will need to show the tenant is in at least one month of rent arrears to obtain possession. Furthermore, if there are three instances of a tenant clearing rent and then running up arrears again, then this ground will be mandatory (i.e. the Court will not have discretion to make any other Order). This is a modification to the current Section 8 mandatory ground 8 (at least two months’ rent arrears).
The landlord can show there has been anti-social behaviour at the property. This is a reinforcement of the current Section 8 ground but the Government have not yet elaborated on this.The landlord can show there has been domestic violence at the property. This is a ground provided for social housing tenants but this would now become available for private landlords.
The landlord can show their tenants have routinely refused access to the property for repairs and safety checks.
The above grounds would be in addition to the current fault-based grounds under Section 8.
As well changing the grounds to obtain possession, the Government has proposed to introduce an accelerated Court process for the mandatory grounds, so this would remove the need to hold Court hearings for possession claims, unless tenants wish to challenge them.
If the legislation is passed, then it is likely to be implemented in late 2020 or early 2021, with an initial six-month transition period.
The proposed abolition of Section 21 Notices would present difficulties to landlords in obtaining possession of their properties. In practice, unless the landlord is able to prove one of the specific grounds, then they will be left with no choice other than to wait until their tenants voluntarily vacate their properties. This is likely to dissuade proposed landlords from purchasing properties and entering into the investment market.
In some cases it has been beneficial for landlords to serve both Section 21 and 8 Notices (usually in cases where there have been rent arrears and the landlord also wishes to leave open the option of pursuing possession under Section 21) but this will now not be an option for them. In cases of rent arrears, landlords could also be faced with the prospect of a tenant “playing the system” and clearing their rent arrears on two occasions, thus frustrating the landlord’s attempt to obtain possession.
Further developments from the Government are awaited with interest and whether this will be final legislation that is enacted by Parliament.
If you require any advice in relation to residential possession claims, or in relation to any other areas of Civil Litigation and Dispute Resolution, please contact Joe Sandercock who will be pleased to advise you.