Section 21 – Where are we now? Plans to abolish section 21 confirmed

After several delays in the plans to abolish section 21 notices, the Government has finally confirmed that it plans to press ahead with abolishing section 21. This comes after there were rumours in the last few days that the Government may be setting aside its current plans to abolish section 21 notices as they were no longer considered to be a priority. However, today the Prime Minister has confirmed in the House of Commons that the Government does plan to press ahead with abolishing section 21 notices.

What is a section 21 notice?

A section 21 notice also known as a “no fault eviction notice” allows a landlord to end an assured shorthold tenancy without having to prove that a ground for possession under Schedule 2 of the Housing Act 1988. So long as the landlord provides sufficient notice, which is usually at least 2 months (but can be longer in certain circumstances), and certain other pre-requisite requirements regarding deposits, gas safety checks/certificates, EPCs and the How to Rent guide have been fulfilled the landlord can proceed to serve a section 21 notice. If the tenant does not leave following expiry of the notice, then the landlord may commence a possession claim to evict the tenant.

Since the introduction of the Deregulation Act 2015 issuing a Section 21 notice has been tricky and the pre-requisite requirements are complicated and many. Therefore, it is usually a good idea to obtain legal advice on this to avoid serving an invalid section 21 notice.

 What changes are being proposed once section 21 is abolished?

The White Paper published in June 2022 “A fairer private rented sector white paper” set out the plans for the changes that are likely to be introduced once section 21 notices have been abolished. As part of this there are plans to introduce a new simpler tenancy system. The plans are to move all tenants from assured tenancies/assured shorthold tenancies to a single system of periodic tenancies. The idea behind this is that it will provide greater security to tenants with landlords only being able to remove tenants in reasonable circumstances.

The circumstances in which landlords can remove tenants are to be set out in a set of reformed grounds of possession. There are plans to strengthen the current grounds for possession and introduce new grounds on which tenants can be evicted. It is a proposed that a new ground for possession for a landlord who wishes to sell the property and if the landlord and/or their close family members wish to move into a rental property will be introduced. This new ground would not be available for the first 6 months of the tenancy, and it is unclear on what sort of evidence a landlord wishing to use this ground will need to provide to satisfy the Courts. There are also plans to introduce a mandatory ground for serious repeated arrears. This ground would be used when a tenant has been at least 3 times in two months or more worth of rent arrears in the last three years. This will allow landlords to evict tenants who are in repeated rent arrears but bring the balance of arrears down just before the hearing to avoid eviction.

Further changes to the grounds for possession include increased notice periods of four weeks for rent arrears cases, a reduction in notice periods for serious cases involving anti-social behaviour and specialist grounds for possession for those providing supported or temporary accommodation.

There are also other changes on the radar in relation to providing a more effective court system, a new ombudsman system that all private landlords must join, the introduction of a new property portal, strengthening current enforcement powers for local authorities and making renting a more positive experience for tenants by giving tenants rights to request pets and prohibiting agents and landlords from having blanket bans on lettings to tenants who receive benefits.

A lot of change is on the way but in the uncertain economic times with the cost-of-living crisis and landlords dealing with increased and uncertain costs of mortgages, the economic impact of these reforms remains to be seen.

Conclusion

Things are about to get challenging with the cost-of-living crisis and rise in prices. Aside from the fact that earlier this week Government spokespersons would not confirm that these reforms were still going ahead under Liz Truss’s Government, the news that section 21 abolition is going ahead is not surprising. What this means in practice is that once section 21 notices have been abolished it will become impossible for most landlords to recover possession of their property through the courts without being able to rely on and satisfy one of the grounds for possession.

It remains to be seen how all these changes are to be implemented into practice. A lot of this requires a major overhaul of the current working practices and systems. The proposed changes cannot be considered in isolation and changes to existing legislation and the introduction of new grounds will need to be considered carefully taking into account the wider picture.