PM Liz Truss confirms Section 21 “no fault” eviction powers are to be abolished
On 12 October 2022, Prime Minister Liz Truss confirmed her intention to introduce legislation into the current session of Parliament to end the power of residential private sector landlords to evict tenants on “no fault” grounds under Section 21 of the Housing Act 1988.
This is not a new proposal; the Government first announced its intention to ban no-fault evictions three years ago, and the Queen’s speech on 10 May 2022 again confirmed a commitment to abolishing the Section 21 process. However, confirmation of the Government’s commitment to pursuing this policy within a definite timeframe takes on a greater significance.
What is a Section 21 eviction notice?
A Section 21 Notice allows a landlord to regain possession of residential property let under an assured shorthold tenancy agreement, without the need to cite or prove any breach of the tenancy on the part of the tenant. The landlord does not need a reason for serving a section 21 notice – for example, they might just want to move back into the property or sell it.
One of the criticisms of the Section 21 Notice is that it allows a relatively short period of time for a residential tenant to make alternative arrangements. The Notice will give an expiry date – effectively the termination date for the tenancy – which will generally be two months after the date of service.
If the tenant is renting on a fixed term tenancy, the expiry date in the Notice must be no sooner than the last day of that term. If the tenancy is a periodic tenancy, the expiry date must be the last day of the tenancy period.
What do the proposed reforms mean?
Because of the automatic continuance of Assured Shorthold Tenancies following the initial fixed term, a Section 21 notice is often the preferred method of termination for landlord who want to recover possession of rented properties. It is comparatively simple to serve a Section 21 notice and that is generally sufficient to recover possession of the property.
In the event that the tenant does not leave on the termination date in the notice, it is possible to obtain an order for possession without the need for a hearing. This is of particular benefit where the tenant cannot find suitable alternative private sector accommodation, as hard-pressed Council housing departments have been known to insist on seeing an order for possession of the tenant’s home before accepting them onto the list of those in need of re-housing.
The only current alternative for landlords is a Section 8 “fault-based eviction”, which requires a landlord to prove one or more relevant circumstances exist that entitle the landlord to take back possession. In the event that the tenant does not leave on the termination date, the landlord must pursue a full possession claim in Court, including a Court hearing, which can take up to a year given the current Court backlogs.
The Government has indicated that they will introduce grounds for a landlord to terminate an AST, for example where the property is needed for the landlord or a family member, or where the landlord is selling their interest in the property, but at the time of writing no real detail has been provided on these additional grounds and how easy they would be to operate in practice.
Section 21 is understandably unpopular with tenants and tenant bodies, particularly because of the relatively short notice period required to end tenancies that may have been in place for many years. It is hoped that the proposed reforms will give “good” tenants more security over their ability to remain in their homes, resulting in a positive effect on physical wellbeing and mental health.
It is also unarguable that tenants, particularly those who are already being hit by the rises in living costs, may be hard-pressed to find the money to relocate elsewhere within the private sector, and that this may result in even greater strain being placed on social housing stocks.
The confirmation that the Government will bring forward the Renters Reform Bill in this session of Parliament will be of some relief to residential tenants. Tenant bodies have long awaited the abolition of the Section 21 notice, arguing (with some justification) that it is an unnecessarily disruptive process that prioritises the rights of landlord to an unfair degree whilst costing the tenant dearly in time, money and stress.
However, Ms Truss’ announcement will come as an unwelcome additional worry to residential landlords, who are already facing additional burdens caused by rising costs and the ever-growing body of legislation governing the private rental sector. The fear is that more and more landlords, especially smaller landlords, will leave the private rental market, resulting in increased costs and less available housing stock.
Whatever the details of the Bill, there will inevitably be a “bedding in period” where nobody is quite certain how to operate the new rules. In the short term therefore, it is vital for landlords to take action in respect of any tenancies where they know they will require vacant possession within a definite timeframe.
How can we help?
If you are a landlord seeking possession of a residential property, or would like any further information about this reform, please contact a member of the Geldards team, listed below.