Opinion and insight for the Roythornes team
Government announces plans for no-fault evictions to be scrapped in England
By Kelly Willows and Michelle Moore
The Government has announced plans on to scrap Section 21 notices in order to protect tenants from unethical landlords and to give them more long-term security.
What is the current law?
Landlords in England can currently obtain vacant possession of their property by issuing a Section 21 Notice which allows them to give their tenant two months’ notice to vacate the property without providing a reason for their wish to end the tenancy. If the tenant does not vacate in line with the notice, the landlord will need to issue possession proceedings at court, evidencing that they have served the necessary documentation at the start of the tenancy (Energy Performance Certificate, Gas Safety Certificate, How to Rent Guide and Deposit Certificate and prescribed information). If undefended, the court will usually grant a possession order without a hearing and give the tenant between 14 and 42 days to vacate the property. If the tenant does not vacate in line with the court order, the landlord will need to instruct bailiffs to effect eviction.
However, the changes which the government intend to introduce would mean that if landlords want to seek possession of their properties they will have to use the Section 8 process. This process is currently only available to landlords under certain grounds, such as where the tenant has breached the terms of their tenancy, for example, by being in rent arrears or engaging in anti-social behaviour. The Section 8 process requires a court hearing and can be defended by the tenant if there are substantial disrepair issues. If the landlord successfully obtains an order for possession, the court will give the tenant between 14 and 42 days’ notice to vacate the property. If the tenant does not vacate, the landlord will need to instruct bailiffs to effect eviction.
Whilst it may not be official policy for local authorities, it is our experience that if a tenant is looking to go into social housing following the end of the tenancy, they advise tenants to await a court order or even bailiff’s appointment before vacating the property. If they do not, they will be deemed to be making themselves intentionally homeless and thus ineligible for social housing. Therefore, this can mean even after expiry of a notice or court order, the landlord is still a long way from getting their property back.
What will the withdrawal of Section 21 Notices mean for landlords?
The proposed changes would mean landlords will no longer be able to evict tenants on a no-fault basis and thus will have to provide a concrete reason for evicting the tenant. Although Government proposals aim to replace the use of Section 21 Notices by strengthening and making additions to the grounds on which landlords can obtain possession under Section 8, this will most likely mean more expense and uncertainty for landlords throughout the eviction process. Furthermore, the Government has not addressed the following questions: how much evidence would a landlord need to provide to show they want to move back into the property? Will it simply be enough for landlords to say they want to sell the property or will they have to accept an offer or will they need to have exchanged contracts for this to be sufficient evidence? What about if it is a family member the landlord wishes to move into the property, is this a ground? All these questions will need to be dealt with if these reforms are not to negatively impact landlords. However, if it is left to judges and not the legislation to provide the answers to these questions, it may take years for case law to develop; and if there are tenant-sympathetic judges, this could prove a real problem for landlords wanting to get their property back.
The Government argues that the main reasoning for the use of Section 21 Notices presently is because the landlord wants to sell the property or move into it themselves. So by proposing to add additional grounds for the landlord to rely on under the Section 8 procedure, they believe this will not cause any detriment to the landlord. In contrast, we see many landlords using the Section 21 procedure to the reduce cost and time to obtain possession when the tenant is in rent arrears as they do not want/cannot afford to suffer the delays at court. The process of Section 8 proceedings is a much more expensive and time-consuming, with landlords or their legal advisers having to attend a court hearing (which can often be months in the future), and it is not uncommon for tenants to stop paying rent during this time; whereas the Section 21 route is a lot quicker. It is dealt with on paper and landlords often choose to take the hit on rent arrears in order to regain possession sooner.
But in recent months, there have been significant delays with the courts, even via the Section 21 route. One recent case we ourselves dealt with saw the landlord: issue possession proceedings in October 2018; obtain a Possession Order in the first week of January 2019; instruct court bailiffs in mid-January, with a bailiff appointment finally being scheduled for May 2019. This has, therefore, taken the landlord a whole seven months to obtain vacant possession of his property even though the Section 21 procedure is the quicker route available to them!
Reforms to the court process
If the Section 21 route is to be abolished, significant reforms will need to be made to the Section 8 process to reassure landlords that if they do need to obtain possession for one of the reasons listed in Section 8, they will not have to wait for months on end to repossess their property. When introducing this proposal, a Ministry of Housing spokesperson has said that the court processes will be “expedited so landlords are able to swiftly and smoothly regain their property”. With courts in the local area recently experiencing delays of in excess of 30 working days in dealing with correspondence, any streamlining of court processes will also need to be coupled with ensuring there is adequate court staff to process documents and this, of course, costs money.
There has been much coverage in the news about scrapping the Section 21 notice in order to prevent retaliatory evictions. Whilst we do understand that abolishing the Section 21 procedure would potentially protect tenants against retaliatory evictions by their landlords, it is rather like using a sledgehammer to crack a walnut. Whilst no tenant should be evicted for reporting a problem to their landlord, there is already a mechanism whereby the local authority can prevent landlords from serving section 21 notices if they fail to address issues of disrepair. However this fact does not appear to have been mentioned in many news reports.
Therefore, it appears to us there are very few pros to scrapping Section 21 and a number of cons which could have the consequence of making lenders more reluctant to lend on buy-to-let properties and potential landlords choosing not to let their properties.
At present, the Government has given no indication as to when it wants to put this legislation in place and we eagerly await further updates. In the meantime, landlords should continue to ensure the prescribed information has been provided to all tenants and proceed with serving a Section 21 notice as usual.
If you need any help with problem tenants or to proceed down either the Section 21 or Section 8 route, please contact our Property Litigation team on 01775 842500 and ask to speak to Kelly Willows.