Section 21 misconceptions

Section 21 misconceptions

10:26 AM, 30th May 2022, About 4 weeks ago 74

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In the recent Queen’s Speech, the government reiterated its commitment to scrapping Section 21 ‘no fault’ eviction notices during the next Parliamentary session.

Paul Shamplina, star of Channel 5’s Evicted! Nightmare Tenants, founder of Landlord Action and Chief Commercial Officer at Hamilton Fraser, has joined forces with PropTech firm PayProp and issued a joint call on agents, landlords and tenants to look into how the eviction process could change once the government’s latest proposed reforms are introduced.

On their mutual agenda are some of the misconceptions that surround Section 21 and Section 8 notices, and a look ahead to the post-rental reform future.

“Currently the vast majority of tenancies end because the tenant chooses to leave, not because the landlord is evicting. Landlords want tenants to stay in their property long term, and only serve notice as a last resort,” Shamplina said.

“We know from our experience at Landlord Action that the majority of Section 21 notices are issued because a tenant is in rent arrears, or because a landlord wishes to sell or move back into their property. In many cases, landlords could have used Section 8 for rent arrears or anti-social behaviour, but their lack of faith in the associated court process, which is undoubtedly more protracted, is why many always revert to Section 21.”

He added: “Therefore, abolishing Section 21 will not significantly change the number of evictions, it will simply change the process, which may have knock-on consequences for the number of open court cases and the associated costs for which the tenant will be liable.”.

He argues that the Section 8 notice and associated grounds will become the norm. Landlords who previously wrote off arrears and used Section 21 will potentially now seek those arrears via Section 8, to the disadvantage of the tenant.

“There are various aspects of Section 8 that need considerable revision before Section 21 can be fully abolished. I believe it will need to be a phased ending to allow the courts time to clear the backlog from the last two years and for all grounds to be considered and revised appropriately,” he said.

“For example, the route for dealing with abandonment cases must be clarified, to prevent unnecessary court cases where the tenant has clearly already left the property.”

 The importance of evidence-gathering and record keeping

According to Neil Cobbold, managing director of PayProp UK, PropTech and automated software in particular has a key role to play in transitioning to a lettings market without Section 21.

“The scrapping of Section 21 is likely still some way off, with a White Paper and the legislation itself needing to make their way through both Houses to reach Royal Assent,” Cobbold said.

This, Cobbold says, gives agents, landlords and tenants a chance to prepare for a playing field without Section 21.

“It’s important to note that reforming evictions is going to cause some upheaval and there will be a significant bedding-in period,” Cobbold says.

“That’s why it’s vitally important that agents have their evidence-gathering and record-keeping processes in place, so they can move as seamlessly as possible from the old way to the new, in which agents and landlords will likely have to rely on a beefed-up version of Section 8.”

He added: “Comprehensive, automatically generated reporting based on live transactional information can make a real difference when it comes to providing the relevant evidence when eviction is necessary. The burden of proof for agents is going to be higher once Section 21 is abandoned. Having to demonstrate proof of arrears, for example, speaks to the need for robust record keeping and evidence gathering tools.”

The government also plans to reduce the number of cases making it to the courts by bringing in a new ombudsman for private rented sector landlords, helping to ensure disputes can be easily resolved without legal recourse. Using technology to create an automated record of payments, communications with tenants and other lettings processes will help landlords and agents to provide evidence of their good conduct when referred to the new ombudsman by tenants.

Section 21 back on the up

Recent Ministry of Justice figures found that private landlord eviction claims are now higher than pre-pandemic – a fact that some have attributed to landlords getting claims in ahead of the removal of Section 21.

Covering the period of January to March 2022, the figures show there were 6,447 claims by private landlords to evict tenants – some 3% higher than the same period in 2019, before Covid hit.

Of these, 6,066 were accelerated procedure claims being made as a result of a Section 21 notice – some 63% higher than the last quarter and nearly a third (32%) higher than the same quarter in 2019, before the pandemic.

Overall, there were 3,763 evictions by landlords, an increase by over a third (38%) on the previous quarter.

Although these numbers aren’t massive, they are still significant, and the direction of travel post-pandemic is for more eviction claims to be made.

“Section 21, having been virtually unused during the pandemic for obvious reasons, is starting to be used more frequently again,” Cobbold concluded. “So, if and when it is scrapped, it is likely that there will be a higher number of claims already in process, which will make some kind of bedding-in period even more vital.”

Shamplina adds: “Ultimately, tenants’ interests are best served by a rental market where landlords have confidence to invest, giving tenants a choice of properties to rent at a competitive price due to a balance of supply and demand.”

“It is essential that new legislation continues to encourage investment in the market as there is already a supply and demand imbalance, so any loss of stock will be negative for tenants.”



Comments

Dixie

11:34 AM, 30th May 2022, About 4 weeks ago

Does ending section 21 it would be impossible to ask the tenant to leave if I wanted the house back to live in myself please?

Pete England - PaTMa Property Management View Profile

12:54 PM, 30th May 2022, About 4 weeks ago

Thank you, for a good summary. Web Software like https://www.patma.co.uk/?ref=Lovat helps landlords manage their properties and provides a rent record for both landlord and tenant to access as well as a task management process so providing any clear information for a ombudsman process.

Dylan Morris

14:25 PM, 30th May 2022, About 4 weeks ago

Reply to the comment left by Dixie at 30/05/2022 - 11:34The answer is we don’t know. If a landlord who rents his house out and then wants to move back in himself is prohibited from doing so then it will be a totally unacceptable state of affairs. Same if a landlord is prevented from repossessing his property because he wants to sell it. It could happen, the Johnson Junta really is that insane.
Also given the next Government will be a Labour administration get ready for the resurrection of the PRS Right To Buy scheme dreamt up by the previous Shadow Chancellor the Right Honourable Comrade John McDonnell.

John Payne

18:03 PM, 30th May 2022, About 4 weeks ago

Keeping records of correspondence could be difficult if the tenant doesn't have an e mail address you them have to pay for recorded delivery to allow it to be signed, and that still relies on the tenant not being out when the postman arrives

Tracey Burke

18:06 PM, 30th May 2022, About 4 weeks ago

Hi I am in need of some advice my tenant signed a new tenancy agreement after signing one six months prior due to a change of landlords name the agency letting my property had a guarantor to sign first agreement but not on the new one tenancy agreement is that right?

CMS

3:07 AM, 31st May 2022, About 4 weeks ago

Reply to the comment left by Dixie at 30/05/2022 - 11:34
That is just never going to happen. The Govt will not take away the s21 and leave no mechanism whereby the landlords can gain possession of their property for perhaps a sale or to live in the property. If they did this they would effectively be asking landlords to take the place of interest only mortgage companies for the occupants.

The whole s21 being abolished will, in the long run, not make a great deal of difference i don't think, and as it happens, i actually believe that with the markets the way they are at the minute the next couple of years could see a rise in rents which should put a smile on landlords faces.

CMS

3:09 AM, 31st May 2022, About 4 weeks ago

Reply to the comment left by Tracey Burke at 30/05/2022 - 18:06
Check the terms of the guarantee that was signed. Some of them (certainly the one i signed for my brother) stated that i was a guarantor for so long as he occupied the property regardless of it being a new tenancy or simply a periodic.

Letting agents dont always ask guarantors to sign the new agreements just in case they refuse! Well thats my experience anyway. Hope this helps

Tracey Burke

7:30 AM, 31st May 2022, About 4 weeks ago

Reply to the comment left by charles stevens at 31/05/2022 - 03:09
Thanks but I hope it doesn’t stand because the tenant is in areas which I knew nothing about till a court summons came to my address!!!!!

Tracey Burke

7:31 AM, 31st May 2022, About 4 weeks ago

Reply to the comment left by charles stevens at 31/05/2022 - 03:09
Thanks but I hope it doesn’t stand because the tenant is in areas which I knew nothing about till a court summons came to my address!!!!!

Tim Rogers

10:12 AM, 31st May 2022, About 4 weeks ago

Reply to the comment left by John Payne at 30/05/2022 - 18:03
I wish recorded delivery did just that, unfortunately experience shows that it doesn't. Many postmen do not get signatures or record the delivery at all.

This was the case before COVID, now it's even worse. I have resorted to fully tracked deliveries, (often non Royal Mail), for all and any potentially sensitive / legally interesting documentation.

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