Will the Government Scrap Section 21 and What Could This Mean for Landlords?

In 2021, we saw a continuation of the previous trends in private renting. This meant more delays, rapidly changing covid legislation, and a restriction on possession claims. This amounted to making things very difficult for landlords and tenants alike.  

We saw continued enforcement trends: growth of rent repayment orders and civil penalties, which meant some landlords faced significant changes. 

Amongst all this, there was much discussion about the government choosing to scrap Section 21. This, too, was delayed. In spite of the uncertain future of covid-related legislation, 2022 will certainly bring major legal changes to the private rented sector in England and Wales. So we ask, will the government scrap Section 21 this year, and what could this mean? 

What is Section 21? 

Section 21 Notices, also called “no fault evictions”, are one of the most controversial aspects of the 1996 Housing Act. The landlord is able to start the eviction process at the end of an assured shorthold tenancy (AST) or during a periodic tenancy without having to give reasons for their desire to regain possession of the property.  

To end an assured shorthold tenancy, a section 21 notice must be served. In a rolling periodic tenancy or a fixed-term contract that has a break clause, you can provide a section 21 to your tenant as the first step to their eviction. 

The notice gives a date for your tenant to vacate the property, but the tenancy continues even if they stay past that date. You must apply to court if you still want them to leave. 

“White Paper” and the Renters Reform Bill 

Several times, the promised suspension of section 21 notices has been delayed. The Government has promised detailed proposals in a White Paper. This was due to be published in Autumn 2021, but is now expected this year. 

Besides reforming the grounds for possession, the White Paper is expected to propose a new ‘lifetime deposit’. This is new legislation requiring landlords to join a ‘redress scheme’ and proposes to change the court process for evictions.  

If you’re a private landlord, there have been suggestions that these changes are soon to be implemented, and you may soon be required to register under these proposals. It could also be used by the government to unveil its much-anticipated regulations for real estate agents. 

There are very likely to be new eviction rules laid out in the proposed reform of the ‘grounds for possession’. Whilst this may sound promising to landlords, it seems more likely that instead of scrapping ‘no fault eviction’, it will become prohibited for private landlords to evict without giving reason. 

What’s Happening to Section 21? 

The government announced its intention to repeal Section 21 of the Housing Act 1988 in the Queen’s Speech of May 2021, as originally outlined in the Renters’ Reform Bill, published at the end of 2019. If Section 21 was abolished, it would end so-called “no-fault evictions” in conjunction with the ongoing project to extend tenancies. Section 8 of the Housing Act 1988 would also be strengthened for repossessions as part of the ongoing project. 

In the interim, the government has published a research paper on the history of the debate around Section 21. It will publish a white paper this year detailing all of the suggestions in the Renters’ Reform Bill as described previously. 

In England and Wales, Section 21 came into effect at a time when renting residential properties for private use had become rather unprofitable. Assurances that they could reclaim the property in case of repossession encouraged landlords to rent out their properties. A staggering one in twelve private tenants in England received them during the COVID-19 pandemic in 2020. 

It’s unclear when the Renters’ Reform Coalition will be launched, but it’s fighting to make sure such reforms are implemented as soon as possible. 

What Will Replace Section 21?  

Following the scrapping of Section 21, Section 8 notices will be the best option if you need to evict a tenant. You can give you a section 8 notice with 2 months notice to a tenant if you have a legal reason to end your tenancy, such as the tenant not paying rent. You must prove these grounds for possession in court, which will inevitably take time and will not necessarily guarantee the eviction will go forward.  

Using Section 8 of the Housing Act 1988 will be the only option landlords have when they wish to regain possession of their property. When Section 21 is terminated, a revised version of Section 8 will be the only legal way to evict tenants. The eviction process differs from Section 21 in that landlords have to present a valid reason for the eviction before a judge. 

Government report suggests that the purpose of this change is to give both landlords and tenants a fairer deal. 

What could this mean for me? 

You need to be as prepared as possible for any new legislation coming down the pipeline. Stay informed and on top of the developments. You can take the following steps to prepare yourself: 

Keep your compliance up to date 

It makes business sense to develop good compliance habits now, even when the legal requirements of the new legislation aren’t yet agreed. 

What this means goes far beyond simply jotting down what you do in a notebook. By ensuring that the necessary documentation is logged, shared, and stored safely, innovative letting agents transform compliance into an easy digital process. 

In the event that you have to evict a tenant, you’ll instantly have all the evidence necessary to demonstrate your compliance with the law. Once the process is complete, you’ll be ready to start advertising your apartment to potential tenants. 

Seek long-term tenancies rather than short hold 

Long-term leases are a great business decision. Your tenant feels firmly established in the property, and you get regular, hassle-free income.  

You must know your target market from top to bottom. You should be tailoring your property to match their needs and expectations, and delivering the property they expect to receive. Then, you can easily secure long-term tenants. 

You can minimise the chances of having to file for Section 8 eviction once you have the right tenant. One who pays the rent on time and respects your property. 

Establish positive relationships with good communication and conduct 

An open and transparent dialogue between landlords and tenants is crucial for mutually beneficial relationships. Keep your communication lines friendly while still maintaining a professional tone with your letting agent. 

If you do have a reliable tenant, make it easy for them to stay, such as considering their requests. This could be allowing pets or painting walls a different colour, addressing their repair and maintenance requests efficiently, and respecting their privacy.   

In this way, letting agents can help you maintain this relationship. This increases your tenant’s desire to remain a renter and reduces your need to go to court for possession. 

Need assistance with your tenant evictions? Get the right professional help  

You can rely on Able Investigations to handle your tenant issues efficiently and professionally. In addition to helping clients with the eviction process, our High Court Enforcement Officers work on court matters as well.  

With our experience in tenant evictions and support from all over the country, you can be sure the eviction process will go smoothly. We make sure all documents are completed so you have a paper trail as proof of what has been done.  

If you need support or advice with commercial or residential tenant eviction services, please contact us today to learn more.  

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