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The recent government announcement that they plan to abolish Section 21 notices has rocked the lettings industry.
The abolishment of Section 21 notices means the Government are removing AST’s from the Private Rented Sector. Rather than looking forward if this legislation happens, it means landlords are being forced back to the last century. They will only be able to offer ‘assured’ tenancies, which are for ‘open ended’ periods.
It’s vital that our sector is flexible so that it offers opportunities to those needing access to housing quickly for new work, educational opportunities and so on, as well as supporting families who want longer-term stability. This one-size fits all approach will not work.
The Ministry for Housing, Communities and Local Government (MHCLG) consultation that closes on the 12th October 2019, is not to decide whether to abolish Section 21’s, but to decide how the change could be implemented.
The last Prime Minister, Theresa May supported this change, we don’t know how supportive the current PM Boris Johnson is, which is why we need you to act now.
Your views should be heard. We explain more about why, and how you can complete the Government survey, below or respond to the survey here.
Spend time now to save an Assured Shorthold Tenancy (AST) crisis
Serving notice for AST’s under current legislation
Landlords with AST’s can currently serve a Section 21 notice to gain possession of their property for any reason either at the end of fixed term, in line with a break clause or within a rolling tenancy (periodic) by giving two months or ‘one period’s’ notice.
During an AST, the only way you can gain possession is when the tenant is in breach. To do this you have to serve a Section 8 notice using a specific ‘Ground’ that covers the breach.
For example for rent arrears, you can use Ground 8, 10 and 11:
Ground 8 - the rent is at least eight weeks, two months or one quarter (depending on how rent is due) in arrears and the judge must give possession if the criteria are met.
Ground 10 & 11 - some rent is owed and/or the rent has been paid persistently late. These are discretionary grounds, the judge ‘decides’ whether to give possession or not.
What does the Government announcement mean for landlords?
The Government want to abolish Section 21 notices, which means the only remaining route to get your property back would be to serve a notice under Section 8.
- Section 21 notices are referred to as, the ‘no fault or no cause’ notice meaning you don’t have to have a reason to get your property back.
- Section 8 is a ‘cause’ notice, which is used to let a tenant know that they are in breach of the tenancy, what the breach is (with evidence) and what they have to do to put it right.
The Government are suggesting amendments to the Grounds that can be used for a Section 8 notice. However, it’s important to know that for each Ground clear evidence is required.
Where tenants pay their rent and look after the property well, many landlords will be happy for their tenants to stay in the property for a long time meaning the tenant will feel secure. If you’ve always had very good tenants, or never needed to get your property back for another reason, you may be one of the landlords wondering what all the noise is about.
But if you need to get your property back, for example because:
- your tenant persistently pays rent late or stops paying altogether
- your tenant is behaving anti-socially
- your tenant is not caring for your property
- you want to refurbish the property
- you need to sell your property
- you need to move back into your property, or you need it for a family member
- your landlord/tenant relationship has broken down
- your tenant is consistently unhappy and is not responding to negotiation and is not behaving in a standard tenant manner but wants to stay in the property.
You’ll have no other option than to serve a Section 8 notice, and without changes, the current Section 8 notices will not cover you.
By getting rid of Section 21, the Government will be making it harder, and in some cases practically impossible, for private landlords to evict anti-social tenants who cause misery for their neighbours and fellow tenants. If landlords have to prove that the relevant legislative ground is met, it will mean tenants will always be able to challenge a notice to evict for anti-social behaviour, which would then need to be proved by those affected.
Problem tenants remain in situ far too long term. Likewise, intimidation can often put neighbours and fellow tenants off from speaking out as they are intimidated by the anti-social tenant and refuse to give evidence.
The reality is that a Section 21 “no fault” notice is the only workable option for landlords in such unfortunate circumstances.
Everyone acknowledges that the court system is simply too slow to address such behaviour swiftly meaning it would take even longer to gain possession of your property. When they made this change in Scotland court waiting times increased three fold and they are a much smaller market than England.
Substantial additional resources and staff would be needed for the current court system alone but it’s believed that tinkering with the existing system will not secure the scale of improvements required. In fact, it’s believed that the Government and Ministry of Justice would need to launch dedicated housing courts run by specially trained judges to process possession cases more swiftly. Not only could this not happen overnight but there has been no announcement to say there are any plans for this or if there is additional funding or resources. County court closures, especially in rural areas, are instead the current reality.
Unless the Government can commit to ensuring that landlords have the same level of confidence about repossessing properties in legitimate circumstances as they do under the Section 21 process, they will inevitably become more risk averse, making it harder for more vulnerable tenants especially to rent property. There will also be an increase in CCJs for non-payment of rent and many tenants will find that few landlords (either PRS, Housing Associations or the Council) will rent to them as a result.
As the now Secretary of State for the Environment, Food and Rural Affairs pointed out on 30th April in the House of Commons: “We all want to help renters, but we need to take care that we do not pass new laws that might actually make it harder for vulnerable people to get rented accommodation.”
What can you do?
You can individually respond to the consultation and we encourage you to do so. The consultation, which relates to England only, seeks views on how tenancies should operate in future.
You can access this online from the Ministry of Housing, Communities and Local Government (MHCLG) website. Click here to read the consultation document, and here to complete the survey. You can submit responses via the online form, email or post.
Please act today to avoid a crisis in the lettings market, the deadline is 12 October 2019.
We will continue to lobby MPs about the Government’s proposed changes, the impact this will have on the private rented sector and their ability to offer tenancies. You can also lobby MPs, click here to read the National Landlords Association (NLA) Section 21 lobbying guide. More...