Date Published 30 May 2023
What choices do landlords have if Section 21 evictions Are abolished?
The recently introduced Renters (Reform) Bill outlines plans to abolish Section 21 (also known as 'no fault') evictions – a contentious measure that is opposed by some landlords.
The proposal was initially mentioned by the Government in the 2019 Conservative manifesto and is one of the commitments on which it was elected.
Why is it so controversial?
Section 21 – background
Section 21 of the Housing Act, 1988 enables landlords, without an extended notice period, to provide tenants with a two-month notice to vacate once their fixed-term agreement has ended. They are not obliged to provide any other reason for eviction – hence the term 'no fault'.
The plan to abolish Section 21 was reiterated in the Queen's Speech in 2019, and further details were outlined in the White Paper, A Fairer Private Rented Sector, published in June of last year.
Currently, under the existing law, the only alternative to a Section 21 notice is for landlords to seek eviction under Section 8 of the same Act. This can be a protracted process, and the landlord must be able to demonstrate that the tenant has broken the terms of the tenancy agreement.
Educational outcomes
The new Bill proposes a simplified tenancy structure, doing away with fixed-term agreements and making all tenancies periodic. This means that a tenancy will only terminate if the tenant chooses to leave or if the landlord has a legitimate reason to evict using Section 8.
Michael Gove, the Levelling Up, Housing and Communities Secretary, commented on the proposal: "Some renters face a precarious lack of security as a result of Section 21 no-fault evictions. Short notice relocations worsen children's educational outcomes, make it difficult to maintain stable employment, and prevent families from settling and investing in their local area."
Nevertheless, the Government has acknowledged the need to expand the grounds for ending tenancies through Section 8.
Once a tenant has resided in a property for six months or longer, landlords will be able to seek repossession under certain circumstances.
These circumstances include:
• Wishing to sell the property;
• Desiring a close family member to move into the property;
• Redevelopment of the property;
• Strengthening of grounds related to anti-social behavior.
A comprehensive list of the proposed exceptional circumstances can be found here (https://www.gov.uk/guidance/tenancy-reform-renters-reform-bill).
However, tenants will have the option to terminate their tenancy at any time, provided they give the required two months' notice.
It should be noted that the Renters' (Reform) Bill must go through the complete Parliamentary process before receiving Royal Assent and becoming law. It can be subject to significant amendments as it progresses through the House of Commons and the House of Lords.
Longer than a year
Although the Bill is in its early stages in Parliament, there have already been suggestions that the Government is considering a proposed amendment concerning student lets. This amendment may allow landlords to regain possession after 12 months so that a new group of students can occupy the property.
The new Bill has been described as the most radical reform of the Private Rental Sector in a generation, and due to the possibility of numerous additional amendments being proposed, debated, and voted upon, its passage could take longer than a year.
Only then will the proposed abolition of Section 21 become law, and even at this point, the Secretary of State is recommending a two-stage approach to implementation.
• Stage 1 – all new tenancies will become periodic;
• Stage 2 – The Secretary of State will announce when all tenancies will be subject to the new, periodic system.
As property management specialists, Cosy Resi understands the challenges landlords may face, particularly in light of potential changes to Section 21. We specialize in property and HMO management, offering a wealth of knowledge and experience to help you navigate the evolving landscape. Our personalized approach ensures that we build strong relationships with each of our customers, tailoring our services to meet your unique needs. If you're seeking guidance and support in maximizing your tenancies amidst the proposed reforms, we invite you to contact us today (https://www.cosyresi.com/default.aspx). Discover how Cosy Resi can assist you during these uncertain times.
Meta tags: Renters' (Reform) Bill, Section 21, Landlords, Tenants, Legislation
Meta description: Options for landlords regarding the proposed reform of Section 21
