The upcoming abolishment of the ‘no fault’ Section 21 could be costly for landlords

Just what we need.

With the government’s commitment to abolishing ‘no-fault’ evictions in the private rented sector, the debate is certainly heating up. Is this really a good idea? On the face of it you might vote a resounding ‘Yes’, but long term I’m personally not so convinced.

A White Paper for section 21 is expected this year.

In April 2019, the government announced: “Private landlords will no longer be able to evict tenants from their homes at short notice and without good reason.” Exactly, the point that there has to be a good reason is a valid one. However, many landlords are concerned that we are already in a position whereby the law makes it extremely difficult, costly and time-consuming for landlords even when there is a good reason to evict.

As Section 21 enables private landlords to repossess their properties without having to establish fault on the part of the tenant, tenants are not therefore unduly discriminated against when trying to secure another rental. The problem is the section 21 notice has been used indiscriminately when a fault notice was the required method of eviction. So could we then argue, it’s the landlords’ fault for not using the correct notices in the first place? Interesting point.

This has caused several issues for the tenant and ultimately landlords, as those tenants being evicted via a no-fault notice incorrectly, are moving on to an unassuming landlord further down the line. Often causing the same issues in the new tenancy. I can totally see why a landlord would go down this route if they do not want the hassle of proving fault on behalf of the tenant, or possibly feel unable to prove it. My view is steadfastly if a tenant is at fault, it should be documented and create a warning for future landlords. I also feel that being held to account is the only way we are going to see a shift in the behaviour of tenants who cause serious issues within their tenancy. There are two sides to every story, and it is not always the landlord’s fault!

A problem for landlords

Effectively, the abolishment of the notice will dramatically affect the ability of a landlord to regain possession of their property.

Although a section 8 notice also allows a landlord to evict a tenant, a landlord will need a valid reason. This notice can be issued if the tenant has:

  • rent arrears (the most common cause)
  • damaged the landlord’s property
  • committed anti-social behaviour

However, a section 8 eviction notice can be challenged by the tenant, which could potentially lead to a court hearing. The eviction can be challenged if the notice is not valid or the tenant has a good reason why they should not have to leave the property. The Ministry of Justice reported in 2017 that it takes an average of 22 weeks for a landlord to repossess a property through the courts. A court visit could be costly for a landlord. However, issuing section 21 can seek to regain the property as early as two months. Once again, I can see why landlords would choose this option regardless for the reason of eviction.

I have seen good landlords having to defend their case against an unscrupulous tenant and the court system appearing to be weighted in the tenant’s favour. What makes this worse for me to stomach, is those very tenants who have received free legal representation to boot. Which the taxpaying landlord has indirectly also paid for. Surely this cannot be justice?

Agreed, those tenants who have done nothing wrong and behaved in an appropriate tenant like manner should be suitably protected, and by the same rules, so should the good landlords.

Interestingly, poor tenant behaviour was the most common reason for a section 21 notice, which does not require a court hearing and can be carried out on paper.

A win or loss for tenants?

It is evident that tenant organisations support the abolition of no-fault evictions. Shelter described the Government’s announcement as “an outstanding victory”.

This is because the abolition will mean there will be fewer unwanted moves caused by evictions and tenants will have more confidence to complain about mistreatment. Will landlords have the same confidence?

However, a report by the NRLA, ‘Possession Reform in the Private Rented Sector: Ensuring Landlord Confidence’, suggests tenants will be worse off. The report states the removal of section 21 would make 84% of landlords likely to become more selective in their choice of tenants. Therefore, it would impact low-income, vulnerable tenants, leaving them without homes. I personally feel that this will be the case, from what I am hearing from landlords. So is this really an ‘outstanding victory’?

An increased selectivity has already been visible in the recent COVID-19 pandemic, with landlords insisting on a solid plan B from prospective tenants for example only accepting those with UK Home Owner Guarantor. This gives landlords themselves a sense of security, as the pandemic caused mass unemployment, resulting in tenants being unable to pay their rent.

Furthermore, the NRLA warned of “serious dangers” to the supply of rented housing for vulnerable tenants.

Difference between section 8 and section 21 eviction

A section 8 notice is served when a tenant is in breach of contract, whereas section 21 is issued to end a tenancy agreement to allow the landlord to regain possession of their property.

How will this change the private renting sector?

Overall, increased security for tenants will cause landlords to become more selective with the occupants of their properties. I am already seeing an increased selectivity and indirect discrimination against vulnerable people even before section 21 has been abolished and this is due to the harsh impact of the coronavirus. This could become problematic for the private renting sector. Whilst the abolition aims to cut down the homelessness figure in the UK, it will force objecting landlords to become more aware of their own security and deny desperate seekers the chance of a home.

  • Increased security for tenants;
  • However, landlords will become more selective

In conclusion, it is my view that the abolition of the Section 21 Notice alone, will be counterproductive.  I feel that this would only have a positive outcome if landlords received support in dealing with ‘problem tenants’ instead of being branded the ‘bad guys’ as is often the case.

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