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Section 21 – All Landlords Should Speak Up Now!

Following the government’s announcement in April 2019 that it intended to repeal section 21, and after Theresa May reaffirmed this commitment at the CIH Conference in Manchester at the end of June 2019, the next step toward the demise of section 21 has now been taken, with the publication of the promised consultation document. Any landlord who rents properties using the assured shorthold tenancy regime needs to be speaking up now and responding to that consultation document.

The forward to the consultation, given by James Brokenshire, sets out the ambitions clearly. The aim is to bring about a “generational change to the law that governs much of the rental sector.” There is no doubt the proposals will bring about a seismic change: but landlords would have to question whether that is change for the better.

The way in which the government are planning to implement these changes is by repealing section 21 and then making a periodic assured tenancy the default position (although there is a question raised about fixed term tenancies, and whether these should be required to have a minimum term, when used). Landlords will then be forced to serve a section 8 notice, relying upon one or more of the grounds for possession if it wants to bring the tenancy to an end. It is of note that the consultation asks for views on whether the abolition of section 21 should be wholesale (allowing Registered Providers in particular to voice concerns).

The Deregulation Act provisions (the benefit of which have been questioned by many landlords) are also discussed. Part of a number of measures aimed at improving the standards in social housing, the provisions of the Deregulation Act police landlord’s compliance with laws concerning gas safety and energy performance by preventing landlords from serving a valid section 21 notice in default of compliance, and by introducing the retaliatory eviction provisions. If section 21 disappears, how will that policing then be carried out?  The answer appears to be by proposing that the Deregulation Act provisions will seemingly now apply to section 8 notices. Many landlords have been caught out by the gas safety rules in particular, and have been forced to fall-back on the section 8 route to regain possession; if landlords will not be able to serve a section 8 notice because of a potential minor admin error re providing a gas certificate, what options will be left for those landlords?

Acknowledging that there are gaps in the current grounds, the consultation document then sets out proposals to beef-up the current grounds by introducing new grounds. The proposal is for new grounds where a sale of a property is to take place, and potential amendment to the existing ground where a landlord wants to move into the property. But the proposals with regard to the latter raise more questions than answers. What about situations where the landlord is itself a tenant, and possession is needed to, in tun, hand back vacant possession to the head landlord? What about where a landlord dies, and the property falls to his or her estate? The mention in the consultation of landlord not being able to serve notice on the sale ground within the first 2 years of the tenancy needs to be qualified to allow for a sale by personal representatives in the event of the landlord’s death.

The consultation does not raise any questions about the Court process (this having been covered in recent consultation documents) but it does refer to “working closely” with the Ministry of Justice to speed-up the time possession proceedings take. The consultation talks of reducing the current minimum time frame between issue and the first hearing taking place by 1 week (down to a minimum of 3 weeks, from the current 4 weeks) and to seeking to free-up the Court bailiffs so evictions can take more quickly. However, even by it’s own estimate, the Ministry admits this may only speed up the average time to progress a possession claim by 2 weeks. If a tenant is engaging in anti-social behaviour, or is not paying rent, a mere 2 week reduction in a time that takes to conclude a matter is unlikely to allay the concerns of landlords. The consultation also refers to a project to ‘speed up and simplify’ the process by introducing an online possession system. The consultation points to a similar scheme now used for divorce cases – but the press around that online divorce system has been far from positive.  

Landlords may not be able to stop section 21 sailing off into the sunset, but all landlords should be having their say now to influence the shape of the future of lettings. The consultation closes on 12 October 2019.

For any further information please contact Joanne Young from our Property Litigation Team - j.young@ashfords.co.uk

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