Section 21 misconceptions

Section 21 misconceptions

10:26 AM, 30th May 2022, About a month ago 76

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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

CMS

15:27 PM, 6th June 2022, About 3 weeks ago

Reply to the comment left by Tracey Burke at 06/06/2022 - 15:24
Sorry i dont quite understand what you mean. Basically, in order for the notice to be valid the tenant has to have received a valid gas certificate prior to the notice being served (i would give it at least a few days). It is for the landlord to obtain and serve the certificate but the court will ask for copies to be provided to them if you need to take court proceedings because the tenant does not leave the property at the end of the notice.

Tracey Burke

15:41 PM, 6th June 2022, About 3 weeks ago

Right sorry my friend’s daughter has been given a section 21 but she has had no gas safety check since 2018 and that was because the landlord applied for the landlord license and the address which states on her tenancy agreement for her deposit isn’t with them we’ve phone them other 2 places and it’s not with them so not sure were she stands about this eviction whether it’s legal? Any advice please

CMS

15:46 PM, 6th June 2022, About 3 weeks ago

Reply to the comment left by Tracey Burke at 06/06/2022 - 15:41
If she hasn't got a valid gas certificate at the time of the notice the notice is invalid. if a deposit was taken and not registered as required by legislation, i think but would need to check, the section 21 notice is invalid and a valid one cannot be served until the deposit is returned. She would also be able to make a claim for up to 3 times the deposit but the landlord doesn't have to pay this to the tenant in order for the notice to be valid. I hope this helps

Tracey Burke

15:50 PM, 6th June 2022, About 3 weeks ago

Thanks 😊 I do d think so but it’s been easier to get a answer on here so thanks for ur advice appreciate it

Tracey Burke

15:52 PM, 6th June 2022, About 3 weeks ago

Sorry one last thing should her landlord of given the court proof of a gas certificate? When they sent the other paperwork?

CMS

15:55 PM, 6th June 2022, About 3 weeks ago

Reply to the comment left by Tracey Burke at 06/06/2022 - 15:52
The landlord has to give evidence of the gas certificates and details of them being provided to the tenant (as well as alot more info) if the landlord has to take possession proceedings. If your daughters friend has only just received a section 21 notice then the landlord wont have provided the Court with anything yet as they will only make an application to Court if the section 21 expires and the tenant has not left. Hope all this helps

Ray Lancaster

15:55 PM, 6th June 2022, About 3 weeks ago

Reply to the comment left by CMS at 05/06/2022 - 23:48
This is what I’m saying how can they possibly bring a law in that you can’t give a non fault notice for a tenant vacate a property?
You must have the right to reclaim your own property.
Interest only mortgages would stop for buy to let meaning for most people they wouldn’t be financially viable.
Regarding repossession how could they if the tenant has the rights as they haven’t defaulted on the tenancy.

Tracey Burke

15:58 PM, 6th June 2022, About 3 weeks ago

We’ve already been given a court date

CMS

16:04 PM, 6th June 2022, About 3 weeks ago

Reply to the comment left by Ray Lancaster at 06/06/2022 - 15:55
Completely agree they just cannot do that because, as I said previously, they are effectively asking the landlord's to be interest only mortgage companies. There is no way they will do that. I am sure that they will allow landlords to regain possession of their property for a sale but the question is how much evidence and what restrictions will they place on a landlord being able to regain possession for a sale eg will you have to sell within 3 months of serving notice on a tenant? will you have to give the tenant 6 months notice etc.

This is the bit that's unknown and that we need clarified if we are to assess how sever any impact will be. The fact of the matter is the majority of landlord's wouldn't evict their tenants unless they wanted to take occupation in the property or sell it - i think both of these exceptions will remain so from that point of view the majority of landlords wont have any issue with the changes. BUT it is all down to what conditions the Govt put on selling and how onerous they make it.

My feeling is that it won't be that difficult to provide evidence that a landlord wishes to regain possession of the property for a sale and it will be a paper exercise. I honestly think this is really just an attempt to appeal to the voters that rent but in reality the impact of this won't really impact most landlords. I could be wrong but i haven't yet seen an argument that has really made me worry. Oh and i should say...i am not an optimist usually! Best, Charles

CMS

16:06 PM, 6th June 2022, About 3 weeks ago

Reply to the comment left by Tracey Burke at 06/06/2022 - 15:58
then she hasnt just been served the section 21 notice. If you have a Court date submit a defence within the time frames required and argue that the notice is invalid for the reasons mentioned above. In addition make a claim for the penalty for non-registration of deposit.

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