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

20:14 PM, 19th June 2022, About 2 weeks ago

Q2 - 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?

You need to have given the tenant the PI in respect of the deposit, the EPC, ideally the gas certificate that they should have had at the start of the tenancy as well as a gas certificate that is valid at the date you serve the notice, the how to rent guide that was valid at the start of the tenancy and the deposit has to have been registered within the correct timescales.

If the tenant has all of the above then the s21 notice should be valid if served after receipt.

CMS

20:16 PM, 19th June 2022, About 2 weeks ago

Q3 - 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 believe that, so long as the pamphlets have been given to the tenant before the notice is served, the notice should be held valid.

I hope this all helps. Best, Charles

CYRIL STALEY

22:15 PM, 19th June 2022, About 2 weeks ago

Reply to the comment left by CMS at 19/06/2022 - 20:16
Thanks Charles

tenancy started 1/11/21
DPS registered 8/11/21 with their contact details in AST in October.

My Letting agent does not appear to have supplied the 3 phamplets so I need to get these to serve before S21.

The agent did not serve the How to Rent Guide and EPC grade C so I have recently served these via recorded delivery myself.

No gas at property.

Tenancy fixed term to 31/10/22 so I will serve S21 mid August together with 3 phamplets.

I lived in the property 2004 to 2019 so will serve S8 ground 1 with S21 both for vacant possession on 1/11/22.

Are there any PI requirements for S8. Not claiming any fault with either form 6A or form 3 ?

Also form 4 for 5% rent increase (AST limit) if tenant dose not leave. He has been very difficult, uncooperative and verbal hence eviction.

My wife and I are 78 and don't want the hassle with him, the bad agent or biased vote catching government. We need peace not agrovation and worry.

We only rented because covid messed up the selling for 2 years.

Any help much appreciated. I think I will have it all on the right track soon.

CMS

22:49 PM, 19th June 2022, About 2 weeks ago

Reply to the comment left by CYRIL STALEY at 19/06/2022 - 22:15
Hi Cyril,

To be fair you do sound like you have it all in hand but if it helps i think you the following answer your questions:

1. the Prescribed info pamphlets do indeed need to be served on the tenant before the s21 notice is served in order for the notice to be valid.

2. That's great regarding the EPC and how to rent booklet. I am sure you know, but just to confirm. make sure that the how to rent booklet you served is the one that was valid at the date the tenancy started. Also keep your delivery receipt from the recorded delivery and sign a statement (cant remember off top of my head the template reference sorry) confirming service. if you think the tenant may try and deny receiving it your best bet is to organise a process server to deal with it for you.

3. Make sure the pamphlets have been served on the tenant before you serve the s21 not at the same time.

4. I am sure you already know but you dont have to wait until mid-August to serve the notice you just have to make sure it expires after the fixed term has expired and it the day before a rent payment date.

5. Did you inform the tenant before the tenancy that you may want it back due to Ground 1? I think you will have to have done that in order to make a claim under this ground. No other requirement regarding info that i can recall.

6. Serving form 4 would be an option to increase the rent but i would think seriously about this before you do. If you have served a valid s21 (and its not abolished at that time!) then if the tenant does not leave you can make an application to court for an order for possession and, as it currently stands, the court would have to grant this although they could give the tenant an additional period of 52 days if he claims the eviction will cause undue hardship. If you serve the form 4 to increase the rent my concern would be that the tenant decides to cause damage to the property etc whilst you wait to get the eviction notice, and for 5% increase (which he probably wont pay anyway) is it worth taking the risk? Just a thought.

Good luck anyway - you look to have it all in hand. Best, Charles

Tracey Burke

5:58 AM, 20th June 2022, About 2 weeks ago

A friend of mine has been given a s21 but am confused how it was able to be given a court date because her landlord last gave her a gas safety certificate in 2018 !!!!! And her deposit is not in a TDS ???? She has checked the 3 government approved schemes nor was she given any pamphlets has her landlord broke any laws does she need to report him or maybe phone the court were the papers came from and Speak to someone she has been given a date for court in July

CMS

6:05 AM, 20th June 2022, About 2 weeks ago

Reply to the comment left by Tracey Burke at 20/06/2022 - 05:58
Hi Tracy, I am pretty sure i answered these questions for you before on this thread if you look back. Your friend needs to file a defence on the basis that the s21 is invalid because if what you say is correct it is.

Plus she can make a claim for the deposit to be returned and the penalty. Good luck

Tracey Burke

7:21 AM, 20th June 2022, About 2 weeks ago

Reply to the comment left by CMS at 20/06/2022 - 06:05
Hi thanks but how does she do that finding it quite hard finding a solicitor everyone seems to be unavailable could we phone the courts?

CMS

8:07 AM, 20th June 2022, About 2 weeks ago

Reply to the comment left by Tracey Burke at 20/06/2022 - 07:21
When the court would have received the landlords application they would normally have sent your friend notice of the claim and she has 14 days i think to respond. once responded there is a gearing which the court will tell her about and they will run through her defence and his claim.

CYRIL STALEY

11:38 AM, 20th June 2022, About 2 weeks ago

Reply to the comment left by CMS at 19/06/2022 - 22:49Charles you have got me smiling.
We concur on PI must be served BEFORE service of S21 not WITH it.
PI also includes the DPS phamplets and all contact details for LL and DPS.
I will not serve form 4 - Good advice.
I keep recorded delivery receipt but also I time-stamped photo of PO letter with their labels and envelope stating PI contents list, all on photo.
S8 - yes verbal only at viewing, no mention of S8 ground 1 but court action FERNANDES v PARVADIN (198215 HLR 33) approved verbal only. - case precedent.
Written advice - the AST states "The tenancies do not guarantee the Tenant any right to remain in possession after the fixed term." Surely that counts for S8 - in writing to tenant - PRIOR NOTICE requirement.
Intend to use lawyer to check forms 6A and 3 and check and improve my reasons for ground 1. Any recommendations please - no liability on you.
Up to April I was totally ignorant never having rented or let in my life.
Cheers Cyril

Tracey Burke

15:01 PM, 20th June 2022, About A week ago

Reply to the comment left by Tracey Burke at 06/06/2022 - 15:58
Sorry to be a pain but av read a gas safety certificate is only needed if it’s a non fault eviction? What about sec 21 for rent arrears?

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