Is section 21 part of your landlord toolkit?
“Landlords will still be able to end tenancies where they have legitimate reasons to do so, but they will no longer be able to unexpectedly evict families with only 8 weeks’ notice. This important step will not only protect tenants from unethical behaviour, but also give them the long-term certainty and peace of mind they deserve.” Prime Minister Theresa May.
Plans have been announced by the Government to abolish the section 21 procedure. Landlords will be familiar with this process, often labelled as the ‘no fault’ eviction.
The section 21 process seeks to avoid conflict and costs by providing a tenant with a notice allowing two months to vacate a property. Often, this notice is followed by a quicker paper-based application for possession as opposed to a lengthy process whereby a hearing is usually necessary. A section 21 notice allows landlords to recover their property without having to provide a reason for doing so, making it the preferred method for many.
The National Landlords Association (NLA) has launched a campaign which seeks to inform the public (and the Government) of the anticipated negative result that revoking the section 21 procedure would have on the private rental sector. A survey carried out by the NLA revealed that of 3,000 landlords, 11 percent had relied on the section 21 procedure over the previous five years and only seven percent had used the section 8 ‘fault’ procedure. Furthermore, when a landlord had sought an eviction due to a fault with the tenant, 44 percent had preferred the section 21 procedure.
Landlords are clearly losing confidence in the rental property market with changes being introduced by the Homes (Fitness for Human Habilitation) Act 2018 and the Tenant Fees Act 2019, as well as further changes anticipated from the removal of the section 21 procedure. Many private landlords are even considering downsizing their rental portfolio at a time when rental properties are in demand.
What about protection for landlords?
The section 21 procedure has always provided a ‘back up’ for landlords and often overcomes the difficulties of the section 8 process. Landlords are often advised to proceed with serving both notices.
Removing the section 21 procedure may cause amends to the section 8 route. The grounds set out in schedule 2 of the Housing Act 1988 are predicted to be expanded, allowing landlords to recover possession for other reasons, such as if the landlord wishes to occupy the property themselves or if the property is to be sold. There are also proposals to speed up the section 8 process which would be a welcome change to the private rental sector.
However, the proposals are very much in their infancy and further updates from the Government are expected.
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