The Abolition of Section 21

Posted on Thursday December 19, 2019

Rozia Ali

As you may be aware the Government has indicated that it has decided to abolish Section 21 of the Housing Act 1988 and seek to improve the implementation of Section 8 as well as extending the grounds of possession.

In the recent Queen’s Speech, the relevant legislation has not been included but reform is still likely.

What are the proposed changes?

  • The end of section 21 notices
  • The end of Assured Shorthold Tenancies.

The aim of the Government’s Consultation

There was a consultation on the Government’s “New Deal for Renting”. The purpose of the consultation was to explore how section 21 has been used in the past and the ways in which Landlords can obtain possession once the section 21 is abolished.

They are also considering what changes are required to the current grounds of possession under Schedule 2 of the Housing Act 1988.

They invited views on the effect of removing the right of the landlord to use s21 and effectively therefore the end of assured shorthold tenancies as well as how obtaining possession through the courts could be improved. This consultation closed on 12 October 2019.

What is the difference between Assured Shorthold Tenancies and Shorthold Tenancies?

Assured Shorthold Tenancies is are usually granted for an initial fixed term. The landlord usually has an automatic right to regain possession of their property after the expiry of the fixed term. This can be ended by the Landlord without a legal reason (“no fault” and by giving the tenant a section 21 notice.

Assured Tenancies gives tenants greater security in that they can only be ended by either the tenant giving one months’ notice or otherwise if the landlord can prove the grounds in Schedule 2 of the Housing Act 1988 in such a way that a Court will order possession.

What are the real concerns raised in relation to the abolition of the section 21?

A number of concerns have been raised in relation to the abolition of section 21. The reality is that generally landlords will only want to evict a tenant when they need to and many landlords do not want possession unless there is a genuine reason or arrears.

Some of the concerns raised are;

  • No automatic right to regain possession
  • End of short-term tenancies
  • Court delays
  • Legal Costs
  • Uncertainty of regaining possession

How will landlords be able to obtain possession after the abolition of section 21 “no fault” eviction process?

Landlords would need to prove one or more grounds listed in Schedule 2 to the Housing Act 1996 which are expected to be expanded.

The consultation paper sets out three new Grounds. These are:

  • Occupation by a family member
  • Landlords seeking possession to sell the property
  • To allow a landlord to obtain possession where a tenant prevents them from maintaining legal safety standards

The Government is also proposing to review grounds for arrears, antisocial behaviour and domestic abuse.

Which court will deal with the possessions?

These are currently dealt with in the County Court but the Government did raise the prospect of creating dedicated housing courts.

However, there was no mention of any further investment in the courts in the September 2019 spending round and HM Courts and Tribunals Service’s modernisation project for possession proceedings has not yet begun.

Will it be difficult for landlords to gain possession?

Where a Landlord’s documentation and compliance with all relevant regulations and laws is in place, and where costs of full proceedings are a factor we would suggest as an option utilising the accelerated procedure as the process could be quicker and generally cheaper.

However, our experience that usually landlords do not regain possession without a reason and the most common reason for gaining possession is rent arrears.

Landlords could still use the other notice under section 8 of the same Act to gain possession and recover arrears and if successful could also seek their legal costs which you could not recover (except fixed costs) under the accelerated procedure. In some cases, we have combined both claims under s.8 and s.21.

The reality is landlords will continue to let their properties after the abolition of section 21. They will probably be more cautious of the type of tenant they select and do more due diligence on the tenant. This may therefore reduce the amount of housing available for letting and drive up rents.

It is difficult to know how serious the effect of the abolition of section 21 will be on obtaining possession. Certainly, one issue that I envisage is how the Landlord would prove the need or intention selling the property and how you would deal with the “family member” ground.

Previous legislation has made similar grounds quite difficult to argue especially if hardship is made a factor. Hopefully the Government will shed more clarity on this.  We shall see in due course what happens.

To discuss your property compliance and claim related needs please contact our Property Litigation specialist, Rozia Ali on Rozia.ali@mackrell.com or 020 (7) 240 0521