Section 21 changes: what landlords need to know…
“No-fault evictions” are expected to soon be a thing of the past, after former Prime Minister Theresa May promised to “protect tenants from unethical behaviour” by abolishing Section 21.
The legislation currently allows landlords to evict tenants at short notice and with no reason. Campaigners have welcomed the change that is designed to better protect private renters, while critics claim the move will make it harder for landlords to remove problem tenants through the “inefficient” court process.
What is a Section 21 notice?
A Section 21 notice allows a landlord to evict a tenant without giving a reason. This section of the 1988 Housing Act can be used to serve an eviction notice either after a fixed term tenancy has ended — where there is a written contract — or during periodic tenancy, where there is no fixed end date.
Tenants must be given at least eight weeks' notice under Section 21, and those on a periodic tenancy have to be given any additional time that may be covered by their final rent payment, too.
The notice is often used by landlords to remove tenants from a property to either allow them to sell the home or move into it, though campaigners claim the fear of eviction discourages tenants from complaining about issues with a property or poor conditions.
Research by Citizens Advice last year suggests tenants who made a formal complaint about a property had a 46 per cent chance of being evicted from it within six months, while the Ministry of Housing, Communities and Local Government said evidence shows that ending tenancies through Section 21 is one of the biggest causes of family homelessness.
What changes to Section 21 is the Government proposing?
In April, the former Prime Minister set out plans to end the practice of “no-fault evictions” in England by abolishing Section 21, which means landlords will need a good reason to evict tenants.
The changes are intended to create greater certainty and security for renters, and will effectively create open-ended tenancies.
Similar plans for Wales have been announced by First Minister Mark Drakeford, while Scotland introduced new rules two years ago requiring landlords to provide reasons for ending a tenancy.
How will section 21 changes affect landlords?
In what has been described as the biggest change in the private rental sector for a generation, landlords will now have to provide a concrete, evidenced reason for evicting a tenant that is already specified in law.
Critics of the move claim this will make it harder for landlords to evict renters who are in breach of their tenancy agreement.
The National Landlords Association (NLA) claims Section 21 ended up becoming “a backstop to overcome the ineffective Section 8 process, where a landlord has to go to court to regain possession when a tenant is in breach of their tenancy agreement, because it is seen as slow, costly and inefficient”.
The NLA believes the changes will create “chaos” for landlords, but the Government claims landlords will have more effective ways of getting their property back when there is a genuine need to do so.
It promises to expedite court processes so owners can regain properties from tenants swiftly in cases where they have fail1ed to pay rent or damaged the property, for example.
In short, tenants will no longer have to fear the use of eviction as retaliation for making a complaint, or being forced to find a new place to live with just eight weeks' notice.
For the more than four million people who live in privately rented homes, they will have greater security in where they live.
Campaign group Generation Rent has welcomed the change, claiming that unplanned evictions through Section 21 had forced people into debt and contributed to rising levels of homelessness.
It added that the new rules are “just the start” and promised to work with the Government “to make sure the detail of this policy is right for renters”.
What can landlords do?
Landlords can make an individual response to the consultation which is available online from the Ministry of Housing, Communities and Local Government (MHCLG) website.
Responses can be submitted via an online form, email or post by 12 October.
When will the Section 21 ban come into effect?
The changes are being consulted on, after which the Government will need to respond, and if they wish to take forward, legislate through discussion in Parliament.
The Government has proposed that – once the law has been passed by Parliament and approved by the Queen – there is a six month ‘transition period’ before the law comes into force. However, they are consulting on the length of this.
This will take some time and – assuming nothing else changes politically and the Government prioritises it – it’s unlikely any changes will come into force before late 2020/early 2021.