Removal of Section 21 Housing Act 1988

by Ian Narbeth

7:22 AM, 7th October 2019
About 2 months ago

Removal of Section 21 Housing Act 1988

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Removal of Section 21 Housing Act 1988

The Government consultation on “A new deal for renting: resetting the balance of rights and responsibilities between landlords and tenants” closes on 12th October. I would urge all landlords to make a submission: Click here. You can also email your submission and any comments to TenancyReform@communities.gov.uk Below is an extract from my submission

1. The Government may already have made up its mind on the matter but there are reasons why section 21 should not be abolished for all tenancies. If the concern was having tenancies of 3 to 5 years, removing section 21 throws the baby out with the bathwater. It is proposed tenants can terminate on two months’ notice but landlords cannot terminate without cause. Coming after everything else that has occurred in the past few years this may be the last straw for many landlords.

2. In recent years Private Rental Sector (PRS) landlords have been demoralised by Government actions. In the last four years we have had:

• Restriction of mortgage interest relief so that from 2020 some landlords will pay tax on zero profit – a tax rate of infinity – or on actual losses;
• Removal of 10% wear and tear allowance;
• Right to Rent checks making landlords unpaid immigration officers. Landlords are threatened with up to five years in prison if they rent to an illegal immigrant. It is understood that a total of about 16 illegal immigrants have been caught as a result of the legislation. Given the amount of extra work required of landlords and the disproportionately harsh punishments, the policy should be re-thought. Similar sentences apply to offences under the Terrorism Act. Is that how much the Government wants to work with landlords?
• 3% extra stamp duty which pushed house prices up and which sucks out of the system money that could be spent on maintaining and improving properties.
• The Tenant Fees Act which instead of just capping or abolishing certain fees, has made all payments illegal unless expressly permitted. It will render landlords liable to fines of up to £5000 for a first infraction if they miscalculate interest for late rent payment and charge so much as a penny too much. It will encourage bad tenants to threaten landlords with severe penalties for trivial mistakes. Until the overpaid penny is repaid the tenant can ambush a section 21 application even if they owe thousands of pounds in rent.

3. Without section 21, landlords will become choosier about their tenants. Despite the No to No DSS campaign, how many landlords will take a chance on the “challenging tenant”: the young person coming out of the care system, the person leaving a homeless hostel or a mother with children leaving a domestic violence refuge?

With the best will in the world some people have troubled lives and not all of them make good tenants. If landlords cannot get “problem” tenants out quickly, they will be less likely to take a chance and will choose the middle class employed tenants every time. Start penalising or prosecuting landlords for not taking on the impecunious, troubled tenant and they may withdraw their rental properties.

4. Section 21 prevents a landlord being tied to an unwanted tenant indefinitely. With the abolition of tenant fees the cost of moving into new accommodation will (we are told) come down. With an efficient market and a plentiful supply of housing, tenants can relocate if they have to.

Yes, there are costs in moving and yes people become attached to their home, but plenty of people have to move for work and they manage.

5. Tenant lobby groups such as Shelter and the CAB assert that tenants can be evicted on only 2 months’ notice. That is wrong. Nobody can be compelled to leave that quickly. In practice if tenants refuse to leave it always takes several more months until the tenant is actually required to vacate.

Government might consider longer notice periods for true “no fault” evictions of longer-term tenants. Something like 2 months notice during the first 2 years, 3 months if the tenant has been there between 2 and 5 years and four to six months notice for tenants who have been there for over 5 years?

6. If, notwithstanding the powerful arguments against, s21 is to be abolished Government should also look at “starter tenancies”. Housing Associations use these. They allow the landlord to assess the tenant and get them out after 12 months if they are unsuitable. PRS landlords will be much happier if they can have a starter tenancy for up to 18 months to assess tenants. Appropriate safeguards can be introduced to safeguard tenants from this exemption being abused. It should also be noted that where there is anti-social behaviour, housing associations can demote a tenancy back to an AST.

7. With Section 21, tenants know they will have to leave if the landlord’s paperwork is in order and, despite the Parliamentary draftsman’s attempts to make a missing comma fatal to a landlord’s application, it works better than a section 8 application. Many cases don’t get to court. Section 8 is a slower process and more cumbersome. The landlord has no certainty of getting possession. It is worth the tenant’s while to take his chances. Even if he loses it will still be weeks before he is evicted.

8. Government should look at establishing a specialist housing court with judges who know the law. Unless the court system is overhauled and vastly speeded up BEFORE section 21 is abolished or restricted even more, a bad situation will be made even worse and delays will increase. There will be more section 8 cases, more paperwork for judges to read, more lawyers to be involved and more cost added to the process. Who will pay that cost at the end of the day?

9. British justice generally encourages advance disclosure of evidence. With s21 claims the law positively encourages tenants to take technical points at court such as that a Prescribed Information Form (which the tenant may have never read) was served a day late, it mis-spelled a name or was signed by only one director, not two.

Tenants should be required to raise points in advance and judges must throw out “ambush” defences that are held back until the last moment. If the tenant offers a spurious defence or no defence or does not turn up at court judges should not act as advocate for the defence and delay the process further.

10. What about tenants who won’t ventilate a property properly? A senior housing officer at one council said that in over 90% of cases where mould is found in rented accommodation it is down to tenants’ lifestyles. They won’t open windows, they dry laundry in the living room with the windows closed. When they have a bath it is like a sauna. Without section 21, the landlord could take months even to gather evidence. All the while the fabric of the house is damaged and the landlord will have a bill for thousands of pounds and rental voids while repairs (unnecessary if the tenant had used the property properly) are carried out. Try recovering £5000 out of a £1000 deposit!

A claim under section 8 requires evidence. What of the tenants who complain about the condition of their property but don’t allow access for the landlord to inspect or his tradesmen to carry out repairs? What of the tenant who leaves his dogs alone all day and they bark continuously? The landlord could use section 8 which takes 12 to 18 months. Then, just before the court hearing the tenant allows access and promises to behave or makes arrangements for the dogs.

Does the landlord go to court, pay hundreds or even thousands of pounds for legal representation only to find the judge says: “Well, provided the tenant gives access/ keeps the dogs under control, I won’t order possession”? Or does he wait till next time and start all over again?

11. With selective licensing, some Councils are trying to make landlords responsible for dealing with anti-social behaviour. In some areas they require landlords to issue s21 notices to deal with problem tenants. Landlords must not be placed between a rock and a hard place of being penalised under a Council’s licensing rules but unable to evict an anti-social tenant.

The courts should have a lower bar for anti-social behaviour than the Environmental Health Officer at the Council. If there is credible evidence of anti-social behaviour from two or more witnesses, judges should be prepared to evict.

12. Special consideration is needed for Houses in Multiple Occupation (HMOs or house share). The following remarks also apply to flats with communal areas where one tenant can seriously upset the neighbours.

13. With four, five, six or more people sharing a house sensible landlords try to pick tenants who will get along together. However, from time to time a house mate is just obnoxious. They pay the rent on time but annoy the other tenants. They play music or the TV loudly or insist on watching offensive programmes in the communal areas. They put the laundry on late at night disturbing others’ sleep. They don’t do their share of chores such as emptying the bins. They never wash up. They “borrow” other people’s milk or coffee and don’t replace it. In all of these cases good tenants may leave or threaten to leave.

Another issue is the personal safety of the landlord and property manager in HMOs. If a tenant threatens the landlord or even is just physically intimidating, it will make life very difficult. It is bad enough where a tenant of the whole property is threatening. With an HMO, the property manager will be visiting the house frequently for check-ins, check-outs, viewings, periodic inspections and general maintenance. Rarely does a month go by without a visit. Without section 21, it could take months to gather sufficient evidence of a tenant’s anti-social behaviour to launch a section 8 claim. Even if the court procedure is vastly speeded up it could still take many more weeks to get to court. If the tenant is meanwhile threatening or intimidating other tenants and the landlord cannot give comfort that action will be taken, tenants will give notice to leave.

Tenants’ circumstances change and loss of a job, relationship breakdown or bereavement may lead to problems with drink or drugs so that the behaviour of a previously respectable tenant becomes unacceptable. If they live on their own or with their own family that is bad enough. In an HMO it is much worse.

Without section 21, how long will it take to get such a tenant out? What about the rights of other tenants, especially women who may feel intimidated by a large drunken male? What about their rights to security and a safe home environment?

14. How are landlords supposed to use section 8 in the circumstances I have described? How do we gather evidence? Can we prove that the awkward tenant borrowed the milk on five occasions, failed to put the bins out and left his messy crockery in the sink? Is that sufficient? How much foul-mouthed swearing in front of others is so offensive a tenant should be evicted? How much hogging the TV remote and watching “Naked Attraction” on TV or late night porn is too much?

Do landlords have to run up substantial legal fees, lose tenants and suffer rental voids because a disobliging tenant won’t change his or her behaviour? Without section 21, that is what HMO landlords are faced with. With section 21 we can tell the other tenants: “Please bear with us. We are evicting the trouble-maker.” Without section 21, it will take too long and the good tenants will be gone before the nuisance tenant is removed.

15. If section 21 is not available, landlords will plead multiple grounds under section 8 to improve their chances of success. The more lurid accusations the better. Tenants will be chased for every last penny of rent. Count Court Judgments will be registered against them. Their dirty linen will be washed in front of the court. Landlords will have to spend more to bring cases and tenants will have to call on Shelter, Citizens Advice etc. to defend them.

It is ironic that just as the Government changes the law of divorce to allow no-fault divorce and avoid claims and counter-claims of bad behaviour it will pit landlords and tenants against each other and encourage landlords to make as many complaints as possible. This will substantially increase the workload for an already over-stretched courts service.

It will also mean that more tenants will find they are treated as intentionally homeless by councils for not paying rent and will be unattractive to private and public sector landlords.

Who will house them?

I predict that abolishing s21 will end up hurting the very people Government is trying to help.



Comments

paul robinson

7:58 AM, 7th October 2019
About 2 months ago

SECTION 21 Consultation (ends 12th October) – Info for all landlords and also specific Ministry of Housing feedback for HMO landlords using joint tenancies.

Warning Long post –

Copy of email extract at bottom of posting.

SCRAPPING SECTION 21 PROCESS AND CONTACT INFO.

I discussed with my MP and whilst he was supportive, I have not heard anything back from him.

I also phoned the ministry of housing (03034440000) and surprising someone did phone me back and following another email, they provide the below response.

They confirmed the process would be as follows:-

1) 12 week consultation
2) Info analyses and report written to government
3) Government would decide if to raise a bill
4) As primary legislation, would require a vote my MP’s in parliament.

Part of my own rental business deals with groups of young professionals on a joint tenancy, with fixed term tenancies and for a host of reasons provide great benefits to all parties, including providing safe, well priced quality accommodation allowing young professionals to save for their 1st house. The scrapping of section 21 will have a major negative effect on this market, as it will on the student market. We also have some single unit professional rentals and again sign fixed term tenancies (blocks), which all parties have always been happy with. But without the vehicle of section 21 allowing block tenancies it will have a negative effect, although not as great as the shared professional rentals.

I have express my grave concern that despite there being 1000’s of shared HMO rentals, clearly define by legislation and majority licenced, the consultation document does not recognise or even discuss the impact of scrapping section 21 on this rental demographic. The lady I spoke to at the ministry of housing in fact said “the consultation document is geared towards single unit occupancy” which if you consider is a major oversight and in my opinion a flawed consultation process!

As you can see in the reply email from the Ministry of Housing, they have suggested “exploring” revising the consultation documents – however with limited time left on the 12 weeks, again I feel that this is flawed.

I would recommend that all landlords:-

Email their MP and also the following parties:-

TenancyReform@communities.gov.uk
Eleanor.Millington@communities.gov.uk
john.healey.mp@parliament.uk
james.hall@parliament.uk

Copy in:-

john.stewart@rla.org.uk
Policy@landlords.org.uk

Also if you are a HMO landlord, especially if deal with groups on shared tenancies, I feel it’s vital that we ask for the Consultation Document to me revised to recognised this large rental market, plus extend the consultation period to allow enough time for landlords to respond.

REPLY FROM MINISTRY OF HOUSING

Thank you for your email regarding Government proposals to remove Section 21 of the Housing Act 1988 and for taking the time to talk on the phone recently. Please accept my apologies for the delay in responding to you.

Please see below responses to your queries, which I hope will be helpful to you.

These answers reflect the proposals as they currently stand in the consultation document, which we are asking for views on. The Government will consider the responses to the consultation and the information gained through stakeholder engagement to decide on the new framework, and so the final framework may be different once this process is complete.

• Following the proposed removal of S21, subject to the proposal of still being able to agree an initial fixed term tenancy – at what stage in that tenancy can the landlord and tenant discuss another fixed term tenancy?

There won’t be a fixed point in the contract when landlords and tenants can discuss a new fixed-term tenancy – you would be able to do this at any point and could continue to use the two-month mark if that works for you.

A landlord could continue to find a new tenant to take the place of the existing tenants and issue a new fixed-term tenancy, in the same way as occurs at the moment, if all tenants are willing and agree.

However, the changes proposed in the consultation document would require the landlord to use one of the existing grounds for eviction under Section 8 of the Housing Act 1988 to terminate the tenancy, if they wished to gain possession of the property.

The consultation asks for views on the existing Section 8 grounds, including whether they need to be improved. It sets out that the Government plans to introduce a new ground for when the landlord wishes to sell the property and explores amending grounds for moving into the property, rent arrears and anti-social behaviour.

• As I understand it, following proposed removal of S21, and after the initial fixed term tenancy, if it isn’t possible to agree a 2nd fixed term tenancy, then the tenancy will default to a rolling periodic. With 5 tenants on a joint and severally liable tenancy, will only 1 be required to give 28 days’ notice to bring that tenancy to a close, or would all 5 have to be in agreement to bring that rolling tenancy to a close?

You are correct that if a fixed term contract comes to an end, and a new one isn’t agreed, then the tenancy will automatically become a statutory periodic tenancy.

If a joint tenancy enters the statutory periodic phase, any one tenant can serve notice to terminate. It is only during a fixed-term tenancy that all tenants must agree to end the tenancy together. The proposals as they currently stand in the consultation document do not seek to change this.

• Can the Q&A support document be updated to encompass shared HMO (licenced in particular), ensuring that this large sector’s feedback can be encouraged to be gathered and also easily analysed on receipt?

We are exploring updating the document so to explain how the changes will interplay with joint tenancies, to help landlords understand how this will affect them, including landlords of HMOs.

Thank you for also sharing details about your business model with us, and your thoughts on the impact the proposed reforms would have. As we discussed on the phone, the consultation is seeking to gather such views, to help shape the future framework so that it works for all parties.

If you haven’t already, I would encourage you to respond formally to the consultation survey. This can be done online at: https://www.gov.uk/government/consultations/a-new-deal-for-renting-resetting-the-balance-of-rights-and-responsibilities-between-landlords-and-tenants.

If you have any follow-up queries please don’t hesitate to come back to me.

With thanks again for your time,

Dylan Morris

8:31 AM, 7th October 2019
About 2 months ago

I have a friend who contacted me over the weekend for some advice as she’s looking to move to another part of the country for work (she’s employed by the NHS) maybe for 12 months. She’s looking to rent her house out on a fixed 12 months tenancy. I’ve told her that in order for her to regain occupancy of her home after 12 months she will need to serve a Section 21 notice as a minimum 10 months into the tenancy, as at least 2 months notice has to be given. We then had a discussion regarding the situation if Section 21 is removed. My take on this is that she would not be able to regain occupancy EVER as without the ability to serve a Section 21 she cannot end the tenancy. Am I correct ? If so this would prohibit somebody like my friend renting her house out in future on a temporary basis if the Government go ahead and remove Sec 21 ?
My friend then raised an interesting point (which I was a little unsure of answering) in that would the tenancy end after the 12 month period if she didn’t service a Sec 21 (or the ability is removed) and the tenant simply complied and left the house on the tenancy end date ?

paul robinson

8:42 AM, 7th October 2019
About 2 months ago

Reply to the comment left by Dylan Morris at 07/10/2019 - 08:31
Section 8 and go through the courts - one of the valid reasons would be if she wished to move back in or sell - but you have to question why a landlord should have to do all this and incur extra cost and work - fundamentally additional risk, work = rent increase. The governments "one size fits all" approach doesn’t work for a lot of landlords and their decent tenants.

Ian Narbeth

9:44 AM, 7th October 2019
About 2 months ago

Reply to the comment left by Dylan Morris at 07/10/2019 - 08:31
You ask: "would the tenancy end after the 12 month period if she didn’t service a Sec 21 (or the ability is removed) and the tenant simply complied and left the house on the tenancy end date?" Yes it would end. The tenant can leave on the last day and that is the end of liability for rent. However, if the landlord has not served a s21 notice he will first have to do so before taking court action so he could lose two months or so if the tenant changes their mind about leaving.

Luke P

13:09 PM, 7th October 2019
About 2 months ago

Chris Daniel

21:09 PM, 7th October 2019
About 2 months ago

Reply to the comment left by Luke P at 07/10/2019 - 13:09What IS interesting about that post is that Scotland have a Tenant campaign group called Living Rent, who protest about Lock changes of 300 of their " neighbours " !
These neighbours are Asylum seekers who've been provided with Housing by the state ( whilst the current level of Homelessness continues ) and have had their Appeal against the right to remain turned down.
Point I'm making is Tenant support groups are increasing ( look at the direct action by Acorn at letting Agents in Bristol over No DSS adverts ) whilst Landlord apathy continues.
I think the 97% of Landlord who aren't a member of some Landlord body aren't helping, at a time when the PRS is under continued attack.
If Landlords don't like the 'flavour' of any of the Landlord Associations - groups out there, then start your own Because 'rolling over' and playing dead isn't working.

Rod

22:38 PM, 7th October 2019
About 2 months ago

I've said it many times before- I always write to the government minister in charge (straight to the top)! If everyone did the same they'd soon get fed up but remember - no one likes to be told how to do their job so word it carefully!

paul robinson

7:21 AM, 8th October 2019
About 2 months ago

Reply to the comment left by Rod at 07/10/2019 - 22:38
I’d also recommend (see my comment above) emailing your MP - if this does go through it will be voted on in parliament

JJ

11:46 AM, 9th October 2019
About 2 months ago

It's a good summary of many of the things that have been recently introduced to penalise landlords but it misses the fact that this comes on top of the right for councils to claw money back from landlords housing social tenants if they subsequently find that the tenant is not eligible for benefits paid; realistically landlords do not have the powers to check the eligibility of the tenant. And the context needs to be that these changes penalize good landlords and indirectly, good tenants.

Mike

12:33 PM, 9th October 2019
About 2 months ago

Well said Ian, I endorse each and every point Ian Narbeth made in this post, I may send a link to these points to my MP or simply copy and paste the points for my local MP to consider before voting the bill.

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