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

Tracey Burke

16:25 PM, 6th June 2022, About 3 weeks ago

Thankyou

Ian Narbeth View Profile

16:53 PM, 6th June 2022, About 3 weeks ago

Reply to the comment left by Ray Lancaster at 06/06/2022 - 15:55
Ray, you write: "how can they possibly bring a law in that you can’t give a non fault notice for a tenant vacate a property?"

Some of us are able to remember the Rent Acts and tenancies able to be passed down two generations, i.e. from tenant to tenant's child/ren and then to his/their children. The letting market was stultified until the Housing Act 1988 introduced Assured Shorthold Tenancies.
Don't assume the Government isn't stupid enough to screw things up even more.

LaLo

19:08 PM, 6th June 2022, About 3 weeks ago

Just put the rent up even if in arrears which will then rocket!

Kate Mellor View Profile

11:21 AM, 14th June 2022, About 2 weeks ago

Reply to the comment left by John Payne at 30/05/2022 - 18:03
No, you can fill in an N215 Certificate of Service and attach a copy of the letter to it. Postal delivery is deemed serviced in accordance with certain timelines, so no response from the tenant is required. It's all paperwork, but fortunately I only have one tenant now who insists on Royal Mail, and supposedly hasn't got an email address.

Leah Pemberton

14:50 PM, 16th June 2022, About 2 weeks ago

I disagree with this hypothesis. S21 abolition will be an unmitigated disaster for the PRS. The idea that rising rents due to the reduced supply of rental accommodation as a result of landlords selling up in response to this change in legislation is somehow going to compensate for not being able to evict a problem tenant efficiently is for the birds.

The higher rents will just mean that more tenants will fall into rent arrears and of course not having S21 will make it harder to get them out!

CMS

7:17 AM, 18th June 2022, About 2 weeks ago

Reply to the comment left by Leah Pemberton at 16/06/2022 - 14:50
I don't see why you think the Govt will abolish s21 and not allow landlords to take possession of their property for any reason. It's just a headline i cannot see that they would make it so draconian that a landlord could not under any circumstances regain possession of their property without the tenant defaulting. As i have said previously, that would effectively mean that the Govt would be asking landlords to be interest only mortgagees which they will not do. The only issue landlords will have is how many hoops they have to jump through to regain possession for eg a sale or reoccupation both of which i cannot see not being permitted in one wayor another.

CYRIL STALEY

19:14 PM, 19th June 2022, About 2 weeks ago

S21and S8 ground 1 eviction notices.
S8 - are there any Prescribed Information (PI) requirements please?
S21 - PI needs are EPC, CGC and How to Rent Guide. Does serving these late but before service of S21 make the invalid situation VALID?
S21 - also requires total compliance with Tenancy Deposit rules. The Housing (Tenancy Deposit) (Prescribed Information) Order 2007 specifies contact details and 3 Procedure Advice phamplets to be served on the tenant within 30 days of occupancy.
My letting agent registered deposit 8 days into tenancy and contact details within the AST but NOT the 3 phamplets! Does their late provision also make a S21 notice VALID.
I can't see any discussion anywhere on the above points.
Help please

CMS

20:07 PM, 19th June 2022, About 2 weeks ago

Reply to the comment left by CYRIL STALEY at 19/06/2022 - 19:14
I am going to send you the answers to your questions one at a time for ease if thats ok. I do know the answers. Best

CMS

20:08 PM, 19th June 2022, About 2 weeks ago

I am going to send you the answers to your questions one at a time for ease if thats ok. I do know the answers. Best

CMS

20:10 PM, 19th June 2022, About 2 weeks ago

Q1 - S8 - are there any Prescribed Information (PI) requirements please?

You do not have to have given the tenant the PI in order for a section 8 notice to be valid

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