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No-fault eviction notices - What this could mean for landlords?

Posted on 15 April 2019 by Sasha Loveridge

No-fault eviction notices - What this could mean for landlords?

The Government plans to scrap the “no-fault” Section 21 procedure for repossessions and consultations will begin today. The Prime Minister has already formally backed its abolition and if the consultations receive public support, the law could be introduced by the end of the year.

Pressure groups have been urging the Government to reform the rental market to give tenants better protection from eviction and greater stability in their home, claiming that Section 21 evictions are one of the biggest causes of homelessness.

Although a landlord is able to evict a tenant with no reason given under the Section 21 process, research has shown that in the majority of cases it is done when the landlord wants to regain possession so they can sell the property. In more recent years, due to the delay of the Section 8 procedure, landlords have been using a Section 21 notice when the tenants are in rent arrears.

However, the ability to serve a s.21 on a tenant is of great importance to a landlord who wants to regain possession of their property. Landlords need to have confidence to invest in the buy to let market. If they do not, the availability of homes to let in the private rental sector will fall as landlords will no longer invest. By abolishing the Section 21 procedure, the only means of repossession will be by the Section 8 procedure, which is based on tenant fault ie. rent arrears, antisocial behaviour, breaking the terms of the tenancy agreement etc. Although abolishing s.21 could reduce the levels of homelessness, it could force landlords out of the buy to let market.

Stricter legislation has already been introduced in recent years with regards to being able to serve a Section 21 notice, which has already meant that in some cases, landlords find themselves unable to evict their tenants.

Under the Government’s plans, landlords would have to provide a “concrete, evidenced reason already specified in law” in order to bring a tenancy to an end. Furthermore, Court processes will be expedited so that landlords are able to swiftly regain possession of their property through the Section 8 process.

What about landlords who want to gain possession to sell? The Government has said that it will amend the Section 8 procedure so that it can be used when a landlord wants to sell the property or move back into it themselves.

Research has shown that on average, tenants stay in their properties for over four years and in 90% of cases, tenancies are ended by tenant rather than the landlord so although in most cases there is no need for a Section 21 to be served on a tenant, it is an important safety net for a landlord and provides them with reassurance. An end to Section 21 could have devastating effects on a landlord and their plans with their investments as open ended tenancies would effectively be created.

Although reducing homelessness and ensuring tenants feel they have security in their home is important, the Government needs to think carefully and act with caution when considering the changes that should be made and what laws will replace the Section 21 procedure to ensure there is a fair balance between landlord and tenant. Many trade bodies are already opposing the proposal, reacting strongly with anger. Only time will tell whether the abolition of Section 21 be a welcomed change or not.

Posted in: Landlord & Tenant/Housing