The scrapping of Section 21: landlord responses

by Dr Rosalind Beck

14:39 PM, 28th June 2019
About 4 weeks ago

The scrapping of Section 21: landlord responses

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The scrapping of Section 21: landlord responses

Given that the Government appears to be rushing to scrap Section 21s possibly before the end of this year (and notwithstanding any change Boris Johnson might make to this if he becomes and stays as Prime Minister for any length of time), how are you as a landlord responding? “Section 21 could be outlawed within months, says outgoing prime minister Theresa May”

Are you going to instigate some Section 21s now, to get rid of any ‘dodgy’ tenants you have – the ones in arrears, notably? We all know that getting rid of them later through Section 8 will cost us a lot more in missed rent, so why not sort it now?

Are you going to give notice to tenants who you feel are very – or too – settled in an area? You might prefer to have more transient tenants – rather than those who are likely to stay even after their children have grown up. This might make your property worth less as you will only ever be able to sell to another landlord – because of your ‘sitting tenants’ – restricting your potential market, which will cost you.

Are you going to give Section 21 notices to any difficult tenants in shared houses – the ones that others find it hard to live with – whether because of their smoking, their rudeness, their aggressive attitude, their awful friends and visitors – including for example, drug addicts – and so on? We all know that Section 8 isn’t fit for purpose for this as other tenants and neighbours are often too scared to corroborate the fact that the tenant is anti-social.

It would be interesting to hear your views in comments below on how you will respond. If for example, you hear the ban is coming in by January 2020, what will you do and when?



Comments

David Price

10:22 AM, 29th June 2019
About 4 weeks ago

Reply to the comment left by Dr Rosalind Beck at 29/06/2019 - 10:01
Not just empty houses but also empty rooms which have been deemed too small to let.

Never mind Heather Wheeler is going to cure homelessness by 2025.

Laura Delow

11:04 AM, 29th June 2019
About 4 weeks ago

Myself & my husband are London landlords of 20 years (31 years commercial). We worked hard to build our portfolio through much personal sacrifice by saving every penny from our hard earned income in order to fund pensions to the max and put down high deposits & later to pay off large chunks of mortgage borrowing. We are extremely proactive & fast to react to any property issues. We make regular inspection visits & carry out any repairs picked up at these visits within a few days even if the tenant never raised the issue. Most of our tenants are long standing, averaging 6 years with 2 at 10 & 13 years & all bar 5 pay below market rent (one is £275 pm below market rent and another £175 pm both of which used to be nigh on £400 pm below but then S24 & other attacks on landlords forced us to start putting rents up). Five are professional lets & 5 are let to councils for Temporary Accommodation tenants & 4 let to tenants on benefits & we find most if not all really look after their home with pride. All tenants pay on time or at worst only 3 have ever fallen behind, but with hard work & patience they eventually paid their arrears & are still with us. None of this came easy. It's been hard work but we always thought it worthwhile in the long run. But now because of the Chinese torture drip, drip, drip attack on landlords, we've been seriously considering selling & may now bring this forward as our hand is being forced by the threat of S21 withdrawal. We may therefore take back our properties early & sit on them vacant (we can fortunately afford to do this having always been big savers & never big spenders on ourselves) & sell once Brexit is sorted & see how the land lies in the property market. Had you asked us even post credit crunch (when property values took a nose dive), would we ever consider selling, we would without hesitation have said a resounding "no". Now.....we ask ourselves regularly why we're still doing it & putting up with all that's been thrown at us with threats of more to come (yet rogue landlords are still getting away with murder), also knowing other forms of wealth attacks will no doubt target our other savings that we've worked hard to save (but we can always emigrate which is now under serious consideration), but at least we would be liquid if not tied up in property, allowing us to make fast financial decisions and most importantly escape the headaches caused by what I can only name "idiots in power" (I hate lowering my standards by name calling but this is what it's come down to). I know I'm not alone & the majority of landlords like me are very good yet we are being punished for the fiscal ineptness of others (those that run the country & those that live off it - some professionally!), and their inability to see let alone understand the domino effect from the blanket decisions they take, more often than not guided by the wrong advisers instead of sensible level headed business people who live in the real world. What a sad state UKplc has ended up where Landlords are so savagely pillaged.

Fuming Landlord

13:07 PM, 29th June 2019
About 3 weeks ago

Reply to the comment left by David Price at 28/06/2019 - 16:04
Horrified to hear you have tenants dealing drugs in your properties David. Have you involved the police? If you could gather enough evidence against them, you won’t need the Section 21 notices and you won’t get your properties smashed up. You can still get the CCJ.

Old Mrs Landlord

13:20 PM, 29th June 2019
About 3 weeks ago

Reply to the comment left by Laura Delow at 29/06/2019 - 11:04Can't fault your logic, Laura, you have summed up the ineptitude and quick-fix, vote-catching actions of successive goverments and the position of so many of us fair and decent landlords who have provided safe and decent homes at fair rents over many years but are now beginning to think the rewards no longer outweigh the effort, cost and risk (£30,000 fine for a minor oversight or even five years in jail) not to mention the time-consuming day-to-day hassle, constant media vilification and government scapegoating. Removal of S.21 will be the last straw for many.

David Price

14:29 PM, 29th June 2019
About 3 weeks ago

Reply to the comment left by Fuming Landlord at 29/06/2019 - 13:07
If only life were that simple, the police will not, or perhaps cannot, act even when the sweet smell of cannabis wafts under their collective noses. We have even provided the police, council and probation service with an on site conference room where they cogitate whilst the dealing goes on around them. We have steel front doors with key entry and exit and anti-pass-back, 60 plus CCTV cameras, we make several reports to the police a day frequently having to call 999 - nothing deters the drug dealers.

How many people have to die of drug related problems before the police take action? We are already into double figures.

Yvonne Francis

16:44 PM, 29th June 2019
About 3 weeks ago

Reply to the comment left by Dr Rosalind Beck at 28/06/2019 - 15:37
I can’t help thinking you are confusing the abolishing of section 21 with three year leases. As you know Scotland has three year leases but England is proposing to abolish section 21. So I do not view the situation quite as dramatic as you. Or am I missing something?

Have you student houses?

I have had two large student houses which I have self-managed for forty years. If section 21 is abolished, I have little fear of my tenants not leaving, because (as most student houses) they are on a Jointly and Severally lease, and in those circumstances my tenants are only too glad to leave together, as I could make one liable for the whole. Also the problem of one tenant giving notice, which could dissolve the tenancy is very unlikely
because, would all the other tenants want to leave anyway? They would simply let that one leave, and find another as they always have. My tenants are under no obligation to leave anyway, but none have ever overstayed. If they did then I would be doomed anyway, due to the time section 21 would take. What exactly would make all of them stay, especially when I have let it for the next tenancy to their friends from the same college, which they have recommended to me?

I have had this conversation with you before but would abolishing section 21, mean one could not give fixed term tenancies? I did not get a satisfactory answer from you. I was under the impression that section 21 operated only after a fixed term. It seems acceptable that a fixed term can be twelve months.

As I said in my conversation before, the real fear for student houses is three year tenancies where notice can be given by the tenant but restrictions on the landlord, if they wish to give notice, and this would be from the start, and hence no fixed period. I did read an agents approach to this in Scotland, where they accepted students early for the next academic year but only on a contractual basis until notice was given by the present tenants. If the present tenants did not give notice in the summer, the agent assured them an alternative could be found. If this sounds all very unsatisfactory then I would agree.

There are lots of other threats as student landlords anyway. Years ago, I attended a social gathering, and met a property developer. When I told him I had student houses, he told me very snobbishly ‘oh I don’t deal with such things’. Well! Well! Have times not changed? Legal and General are investing 38 billion in my area for accommodation for students and university staff. The Council will of course support all this, only too glad to see students out of residential houses. The PRS in student accommodation is defiantly on its way out, but not quite yet. I am in my twilight years and will pass them on to my children on my death. I have advised them to sell.

Monty Bodkin

17:25 PM, 29th June 2019
About 3 weeks ago

Reply to the comment left by Yvonne Francis at 29/06/2019 - 16:44
"Legal and General are investing 38 billion in my area for accommodation for students and university staff."

Have you seen the size of the accommodation?
There is good reason for them having a 'no pets' rule
-There isn't room to swing a cat.

Corporate landlords can't compete with private landlords on quality for money, the only way they can compete is by government taxing and legislating good private landlords out of business.

Frederick Morrow-Ahmed

17:33 PM, 29th June 2019
About 3 weeks ago

Reply to the comment left by David Price at 29/06/2019 - 10:22
Yes, I have just had to empty one of those rooms deemed too small to let.

Anthony Endsor

19:56 PM, 29th June 2019
About 3 weeks ago

Reply to the comment left by Yvonne Francis at 29/06/2019 - 16:44
Yvonne, I am not quite sure how you can confuse section 21 with 3 year leases.
The 3 year leases you are talking about are where a landlord has to allow a tenant to sign up for a minimum of 3 years, meaning the tenant is safe in the house for those 3 years. After this the landlord could then issue a section 21 to give them notice if they so wished to do. A lot of landlords had a problem with this as there are a number of mortgage companies who will not allow fixed terms of more than 12 months.
However, moving on to the scrapping of section 21. It appears from your post that you don't seem to understand quite what an impact this will have on landlords and why it will. At present, if a tenant breeches any conditions of their agreement, a landlord is entitled to issue a section 8 in order to ask them to leave. The problem with this is, fault then has to be proven in court in order to gain possession. This can be difficult in a lot of cases, as tenants tend to be good at covering their tracks and it can be your word against theirs. Invariably the judge will rule in the tenant's favour. So section 21 is the only way a landlord can get rid of a rogue tenant.
Section 21 is a no fault notice which gives a tenant 2 months to leave a property without a reason being necessary. This can be used if a landlord merely wants to sell a property, or if there is any other reason a landlord requires possession of a property. It is the ONLY way a landlord has of gaining possession of their property. If Section 21 is scrapped, a landlord will then be left with no possibility of ever gaining a property back. They would not be able to evict a tenant for any reason, no matter how good or bad a tenant turned out to be. They would never be able to vacate a property to sell, or for any other personal circumstances they may find themselves in. So landlords would be forced into selling a property with the tenant still in the property, meaning they would have to accept a lower price, possibly going into negative equity and potential bankruptcy.
It would be a disaster for landlords with student properties for reasons already stated in this thread.
Fixed term tenancies would cease to exist. Any new tenancies would be the same as existing tenancies, for life. So if a rogue tenant moves in that's it. They're there for good. I hope having read this explanation, you can now see why landlords are not very happy at the prospect of section 21 being scrapped.

Dr Rosalind Beck

20:37 PM, 29th June 2019
About 3 weeks ago

Reply to the comment left by Yvonne Francis at 29/06/2019 - 16:44
Hi Yvonne.
I am not the expert on this, but the way I believe it works is that if you give for example a 12-month fixed term to a tenant, then they are not actually obliged in law to vacate at the end of the 12 month period. In fact, you should have issued them a Section 21 at least two months before the end of the 12 month period. I believe many people don't realise this.
I did have a tenant once who did realise this and to whom I had not served a precautionary Section 21 two months earlier. He then insisted on his right to stay in the house over the summer, even though a group of 4 had signed for the house for start date of 1st of July. Luckily the incoming students were very accommodating as they didn't need to occupy until September and we told them that the rent paid by the hanger-on tenant could be used to cover the standing charges etc over the summer that they otherwise would have been liable for. At the point that we realised his intention to remain beyond 30th June, we had then issued a Section 21 to make sure he would leave by the end of August. Does this make it clearer? I'm sure others could explain it better.
So, in the future, without Section 21 tenants would have the right to remain - unless, of course you could use grounds under Section 8. This is where the abolition of Section 21 in effect grants indefinite tenancies.

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