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

CYRIL STALEY

13:10 PM, 21st June 2022, About A week ago

Reply to the comment left by CMS at 20/06/2022 - 18:00More worry Charles.
1/11/21 I sent a letter to the Lessor' s agent - E & M Ltd providing tenancy start that day and his full name.
It took until 25/5/22 for them to reply in a threatening letter requiring me to have done RIGHT to RENT check and CIRC electric test/certificate. My LA never did NOT do the former nor advised me regarding the latter.
Under this pressure i asked the LA to let me have proof of R to R issue. In responce they have now printed such R to R cert BUT it is dated 10/6/22, almost unreadable. i view this as attempted deception.
EIRC - I had the elect test done 15/6 giving me 28 days to replace 2 mini circuit breaker panels they say are obsolete. Cost quote £1,311 in addition to test cost £226.
If no tenant there would be no law requirement to replace.
It looks like I have to bear the cost as he has FIXED TERM until 1/11/22 or residence even beyond.
Ridiculous law that protects a tenant, but ignores the saftey of owner families.
Wish I never rented.
If I drank, i would go down the booser!
Cyril

CMS

14:08 PM, 21st June 2022, About A week ago

Reply to the comment left by CYRIL STALEY at 21/06/2022 - 13:10
Its not ideal i know but try and be pragmatic with it. When you get the house back if you rent it again (unlikely) you would have to pay those costs. If you wanted to sell the buyer would likely have this issue checked and try ad reduce the price by this amount.

Yes its a pain but try an look at it as an investment in your asset. Cheers, Charles

CYRIL STALEY

22:20 PM, 21st June 2022, About A week ago

Reply to the comment left by CMS at 21/06/2022 - 14:08
Got 3 quotes
£1,786
£1,311.13
£800.

An itinerary is essential at end of tenancy but LA didn't even type our list, let alone get mutual signatures to it.

Serious question. Is an itinerary a Prescribed Information item?

I know the EIRC strangely is NOT.

Beginning to collate papers for S21.

Will do S8 separately, later as there are no PI requirements for it.

Thanks Charles

CMS

7:06 AM, 22nd June 2022, About A week ago

Hi Cyril, short answer tonight as I am about to go on a concall - no itinery is not a PI I don't believe. Thanks, Charles

Karen

15:22 PM, 27th June 2022, About 3 days ago

Tenants have stopped paying the rent and are not communicating at all. I went to knock on their door and noticed the yale lock had been changed, its a different colour now.
What happens if there should be an emergency, e.g. they leave the water running in the flat, while I wait for a court hearing? Am I allowed to get a locksmith in to gain entry?

CMS

0:40 AM, 29th June 2022, About 2 days ago

Reply to the comment left by Karen at 27/06/2022 - 15:22
I had one recently where the tenant had apparently 'left the gas on' and the letting agent called the police and they attended the property together with the landlord and a locksmith and forced entry for safety reasons. I would suggest the same course of action would be sensible if at all possible.

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