Abolishing S21 without S8 fully ‘fit for purpose’ will have dire consequences

by Paul Shamplina

11:02 AM, 16th April 2019
About 5 months ago

Abolishing S21 without S8 fully ‘fit for purpose’ will have dire consequences

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Abolishing S21 without S8 fully ‘fit for purpose’ will have dire consequences

Abolishing Section 21 without making Section 8 fully “fit for purpose” will have dire consequences on our housing supply.

Yesterday (15th April 2019), the government has outlined plans to consult on new legislation to abolish Section 21 in a bid to end so called ‘no-fault’ evictions. Although this is not a surprise move, it is one that, if goes ahead as suggested (i.e. full abolition of Section 21), will be game-changing for the private rented sector.

As I have said for many years, the vast majority of landlords only evict tenants as a last resort. At the end of the day, a landlord doesn’t let his property just so he can subsequently evict the tenant, there is always a reason, so the term no-fault is moot. When the property is let, it is an active decision made by the landlord. Unfortunately, circumstances change, for both landlords and tenants, but that’s what most people like about the PRS – its transient nature.

Removing the ability to evict with Section 21 will undoubtedly make any prospective landlords very nervous about embarking on the world of buy-to-let and could encourage existing landlords to exit the market, thus compounding the housing shortage crisis. I also believe we could see a surge in landlords serving section 21’s in the near future, as this could be a step too far, especially for the smaller landlords, which unfortunately will result in more evictions.

I do fully understand the need for families to have greater security and be able to put down roots, but there are several factors within this proposal that need to be carefully considered before an outright ban is implemented.

Changes to Section 8 and Court Processes

It was reported by Citizens Advice that supposedly 141,000 people have been handed eviction notices since laws to ban revenge evictions were introduced in 2015.  I just don’t understand how they have collated this information when non-fault means the landlord would not have given a reason.

No-one knows exactly how many Section 21 notices are served every year.  However, what we do know is that the most common reason for doing so is rent arrears, as was the case for 56% of landlords who responded to our survey last year.

In this instance, the reason landlords use Section 21 to gain possession rather than Section 8 as was intended, is because it is typically quicker.  Landlords have little faith in the current court system and few anticipate being able to pursue rent arrears, so most take the decision to forfeit recovering lost rent and just to get their property back as soon as possible so they can re-let.  Section 8 also comes with the added risk that tenants can counter-claim, therefore delaying the process further.

The announcement said that “Ministers will amend the Section 8 eviction process, so property owners are able to regain their home should they wish to sell it or move into it.”

In my view, if Section 8 is going to have to be relied on more heavily, it must be “fit for purpose” and any changes and their application need to be carefully considered.  Clearly, if a landlord is going to need strong grounds for possession, there are going to be a lot more court hearings. So, my question would be, are there going to be a lot more judges and resources to handle this increased workload?

The government has said that “Court processes will be expedited so landlords are able to swiftly and smoothly regain their property in the rare event of tenants falling into rent arrears or damaging the property”.  However, in truth, we don’t know how ‘rare’ rent arrears cases are because most landlords are writing them off via use of Section 21.

So, in that respect, perhaps greater use of Section 8 might be a positive thing as there will then be more accurate records of rent arrears cases.  However, the government must then assist landlords by ensuring money orders are registered as CCJs.  This will not only act as a deterrent to tenants who regularly fall into arrears and simply move on, but also enable landlords to pick up on defaulting tenants from their referencing.

Finally, what about all those cases which are less black and white? The cases where the tenant does pay the rent, eventually, but it is always late, refuses to give the landlord access and fails to communicate regularly, leaving the landlord with no choice but to pay the mortgage out of his own pocket until the tenant coughs up? My point is, it is not always one reason why a landlord decides to serve notice, it can be series of reasons which have built up over time, leading to a breakdown in communication. Where will those landlords in that situation stand?

Landlords are feeling very downtrodden at the moment and it’s easy to see why – they haven’t even started to feel the effects of the tenant fees ban yet and already have been hit with yet another potentially industry-changing piece of legislation.

Whatever the outcome, we know it isn’t going to happen quickly as there is a consultation first, but since there is much at stake for everyone involved in the PRS, I would urge the government to fully engage with the industry to understand the consequences of legislative change and consider dilution of Section 21 over removing the use of Section 21 altogether.

So finally, as a landlord, I urge you to complete the consultation on Section 21’s when its released by the Government, to have your say.

Contact Landlord Action

Specialists in tenant eviction and debt collection. Regulated by The Law Society.


Comments

PJB

19:20 PM, 18th April 2019
About 5 months ago

Here is a thought. If it becomes possible to evict a tenant using S.8 for 'un-tenant like behaviour', we should be able include a reasonable amplification to the meaning of 'un-tenant like behaviour' in the AST agreement such as refusing permission to enter the property to inspect for gas safety, electrical safety, damp, legionnaires, fire alarm certification, emergency lighting certification, essential maintenance, failure to communicate, condition of the property including cleanliness, damage and so on.
Late payments are already covered by S.8.
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I take the point that many judges have a natural bias in favour of the tenant. This is probably because judges know that a S.8 judgement against the tenant will be regarded by councils that the tenant made themselves 'intentionally homeless' and the council will not want anything more to due with them.
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I propose making the local council make an officer available to receive and store copies of email exchanges between the landlord and tenant which can be later used in court to demonstrate what events took place that brought the claim for eviction to court. With evidence being held by a third party, the judge will need to be more circumspect. The local council also should have an interest in that if the tenant is evicted, they are better able to judge if the tenant will make themselves intentionally homeless before matters are taken to court. My local council re-homed my former tenant before court action mainly because we forced a dialogue with council months before the end.

Mandy Thomson

11:02 AM, 20th April 2019
About 5 months ago

Many of the comments on here assume the government would adopt a similar possession model to the fairly recent Private Housing (Tenancies) (Scotland) Act, which introduced a dedicated housing court and introduced more mandatory no fault grounds which allow for possession if the landlord's circumstances change (e.g. landlord is selling).

However, from what I understand the intention is to simply rely on the existing grounds under s.8 "concrete, evidenced reason already specified in law". As we in the PRS industry know, this would be an unmitigated disaster.

I know there's going to be a consultation and would urge everyone to complete it, but from my own experience government consultations rarely, if ever, result in changes to proposed policies, though perhaps government may be persuaded to soften this a little perhaps by the introduction of Scottish style no fault grounds, particularly if they get their Brexit plans through.

A government desperately fighting for its life is hardly going to listen to an unpopular minority, however much it believes that minority to be in the right and draws voters from.

As for a housing court, my understanding is there is little appetite nor funding for this and Giles Peaker responded to one of my Tweets by saying they have huge backlogs of cases (though with their aim being to dedicate a whole half day to each case, this is hardly surprising).

Having said that, I can find no comments anywhere from Scottish landlords on the new system, either negative or positive, except I believe Edinburgh landlords are turning to holiday lets and the few Scottish landlords I've spoken to had pre PRT tenancies they haven't renewed so were still using the old s.33.

Annie Landlord

20:12 PM, 20th April 2019
About 5 months ago

Reply to the comment left by Mandy Thomson at 20/04/2019 - 11:02
The government press release certainly included reference to adding selling or moving back in to the existing S8. I regularly search for comment from the SDP or Westminster on the operation of the new Scottish tenancy and ending of no reason evictions. There is almost nothing out there, which leads me to conclude that no positive outcomes are being seen. The Housing Tribunal appears to overwhelmed, but apart from that updates are very thin on the ground

Mandy Thomson

8:57 AM, 21st April 2019
About 5 months ago

Reply to the comment left by Annie Landlord at 20/04/2019 - 20:12
Yes, I believe they are open to introducing those additional grounds, but NOT to introducing a housing court. Even if s.21 was left alone, we NEED to ensure that only judges with knowledge of housing law are used.

As an example, I have a colleague who does a lot of court advocacy work and he told me about one occasion where the judge immediately dismissed a s.8 claim because (the correct form 3 notice) mentioned agricultural tenancies in the subheading.... That is the level of housing law ignorance we are dealing with.

However, from what I can glean, the Scottish housing court, though laudable in theory, is failing in practice and I believe this is because they are expected to give each individual case a full half days hearing (according to the solicitor from TC Young who trained us on the Private Housing (Tenancies) (Scotland) Act 2016).

Mandy Thomson

9:33 AM, 21st April 2019
About 5 months ago

If the government wants a viable alternative possession system, I would suggest that for the more readily provable grounds like rent arrears and sale of the property, use an accelerated procedure where there is only a hearing if the evidence isn’t straightforward or the tenant can bring proper contrary evidence.
This could be done by a trained caseworker and again, only referred to a judge if the evidence or the case wasn’t straightforward. The judge (fully conversant with housing law of course) would only call a hearing where the case couldn’t be settled on additional evidence from the claimant.

Mandy Thomson

9:48 AM, 21st April 2019
About 5 months ago

Reply to the comment left by Mandy Thomson at 21/04/2019 - 09:33
"...only call a hearing where the case couldn’t be settled on additional evidence from the claimant."
That should read "where additional evidence from the claimant (where the original is lacking) is still inconclusive and there is no contrary evidence from the defendant (the tenant).

PJB

10:16 AM, 21st April 2019
About 5 months ago

Reply to the comment left by Mandy Thomson at 21/04/2019 - 09:48I fully agree. It is clear that S.8 needs to be strengthened and the hearing process speeded up. I believe that if claims were handled by a dedicated tribunal service in the first instance and only referred up to the county court if it felt it could not make a safe decision or if there were criminal issues (such as theft, fraud, damage, threats, etc.).
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On the S.21 front, abolishing S.21 will allow students to continue their AST agreement(s) on a statutory periodic basis if they so chose. In the meantime, the next set of students that signed up to legally occupy the property can no longer do so. I believe the landlord is still responsible to honour the AST agreement and must find suitable accommodation for these displaced students. It is a situation that puts the potential incoming students, letting agents and the landlord in deep trouble. The University itself could also get dragged in.
This is a major trip hazard.

Mandy Thomson

10:28 AM, 21st April 2019
About 5 months ago

Reply to the comment left by PJB at 21/04/2019 - 10:16
The question of student tenancies (and other tenancies where the agreement needs an end date) is one area the Scottish PRT fails to address, and landlords could be put in the situation you describe. I've come across cases where a student drops out, doesn't get a job and therefore can't pay the rent etc but remains in the property and won't budge...

Clearly we need a ground to cover this, which allows for a set fixed term with an option for the landlord to serve notice if the tenant holds over after the fixed term.

For Scottish student landlords, could they get around the current failing in the system by only granting a tenancy where the tenant gives them NTQ (post dated to an agreed future date) at the start of the tenancy?

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