One of the interesting potential side effects of removing section 21 from the Private Rented Sector is the damage it might do to landlord regulation. Over time s21 has become a backdoor regulatory tool to help ensure landlord compliance. If the notice is removed altogether will this impact on regulation by removing a useful tool which encouraged, or compelled, landlord compliance. Or will it have little practical effect.
The process of linking section 21 to regulatory measures seems to have started with the Housing Act 2004 and the linking of tenancy deposit protection to the service of section 21 notices. Although the same legislation also linked licensing to section 21 it was the deposit protection provisions that seemed to have had the greatest effect. The idea has endured since with the How to Rent guide and the service of an EPC and landlord’s Gas Safety Certificate also being linked to the ability to serve a s21 notice. However, the process has often appeared random and so while s21 is linked to GSCs the, equally important, safety requirement to have smoke detectors in every rented property is not linked up.
At least one of the approaches driving linking may have been to provide a means of enforcement for matters that have not been seen as serious enough to be criminal. So tenancy deposits and the How to Rent Guide are linked up. However, against that we can see the failure to have an HMO licence which is also a criminal offence and the failure to serve a proper GSC, again an offence. So perhaps the rationale is somewhat more arcane, or haphazard.
More recently it may have fallen out of fashion a little with the rise of the civil penalty and the spread of rent repayment orders in the Housing and Planning Act 2016. Although the Tenant Fees Act 2019 uses the full panoply of civil penalties, a form of recovery order, s21 restrictions and criminal prosecution.
It is open to question just how effective an enforcement tool the s21 notice truly was. It certainly made sure new requirements were brought to the attention of the landlord community as threats to s21 received wide press. However, many tenants remained blissfully unaware and so the regulatory effect may have often been somewhat after the fact in that a possession claim by a landlord based on s21 was delayed. The benefit of this to the tenant was probably relatively small in itself. A tenant becoming aware that his or her landlord had not served a How to Rent Guide when a duty solicitor helped them defend a s21 notice in a possession hearing would receive little comfort when they got sent a fresh How to Rent Guide a few weeks later with a new s21 notice alongside it. Staving off the inevitable by a few weeks provides little practical benefit to tenants and serves to irritate landlords more than it does change their behaviour. This also ignores the undoubtedly substantial number of s21 notices that were never contested and the many tenants who never learned of the breach that rendered the notice served on them invalid. It also misuses the courts and the legal system to some degree by making them de fact enforcers of regulatory matters that might more properly be dealt with by better funding for local authorities and more effective local enforcement strategies.
There is also the point that the benefit does not accrue to the tenant. In fact, the benefit probably accrues most to legal professionals who end up advising landlords and tenants on their respective rights over s21 notices and fighting cases to the appellate courts on abstruse points of law associated with them. In this sense, perhaps the rise of civil penalties and repayment orders is a welcome alternative to s21-based regulation. It provides and immediate and direct penalty which is linked to the specific offence and provides tenants with a direct recompense for the breach of their rights. As against that, there is the difficulty that those people who were probably helped most by s21 restrictions, poorer tenants who had eligibility for public funding, will not receive such help with the repayment order applications and are unlikely to ever find out about their right to compensated. At the same time, unless local authority funding and enforcement receives a jump-start the civil penalty process will never be more than a nuisance factor for many landlords.
At this point you might be expecting an answer. You will be disappointed. The fact is that we have no idea how effective or otherwise the linking of regulation to s21 is or was. And now we will probably never know. Its publicity value may have been worth more than any actual direct effect however and that will be hard to replace.
A very interesting piece. Perhaps there will be an opportunity to bring these issues to the Government’s attention as part of a response to the promised forthcoming consultation on the abolition of section 21 notices.
Incidentally I don’t recall any case yet that links EPCs to section 21 notices in the same way as gas safety certificates have been linked to section 21 notices. The courts have emphasised the importance of gas safety certificates to tenants. It’s difficult to say that an EPC has the same importance, so the logic might not be quite the same even if the wording of the legislation is.
The more that people examine the possible abolition of s21 under a jeweller’s Loupe the more facets it throws up. Interesting ideas there Giles.
I dont fully agree that defeating possession by identifying an invalid s21 is needlessly buying time. Buying time is often a really useful tactic in so many cases, it can afford tenants the space to seek alternative accommodation.
And with that in mind, perhaps another consideration is how it will affect the Homelessness Reduction Act, whereby a person is considered threatened with homelessness when served with a valid s21 that expires in 56 days. If it does go and s8 is beefed up, how will threatened homelessness be determined in that context, when possession hearings can be defended and counterclaimed against?
David’s piece, not mine. Yes, the HRA is another potential complication. I think a s.8 has to be considered as threatened homelessness. Defences and counterclaims are uncertain at best, and not comparable to, for instance, deciding that a s.21 is invalid under the current web of regulations.
Very good article. It is, in reality, a box ticking exercise that can buy the tenant some more time. It has meant a fair few landlords handing those large deposits back first though – to have it stand up in court. (But not the determined criminals, no). Licensing – with actual inspections – does far more to improve standards than s21 conditions. You must ultimately operate one national register that any private landlord would struggle – thanks to smart bureaucracy – to actually avoid. And you must confiscate stock and put it into local authority ownership if landlords put their tenants at serious risk.
Sorry David.
Now, when training homelessness case workers I always say that claims brought following s8 do not render a person threatened with homelessness, even ground 8 claims, because of the numerous ways that the hearing can go on the day. Adjournments, strike outs, borrowing enough money to get it £1 under the 2 month line.
Whilst I agree that defences and counterclaims are uncertain, so is the granting of possession, so I wouldnt advise an HPU that they owe a duty to someone brandishing a s8, or even a hearing date.
But I dont want to sidetrack here.
The section 8 could and should be linked to regulatory requirements as is the S21 – and more penalties payable to the Tenant introduced
– after all gas safety is vital. As to why there are gas safety certificate cases rather than EPC cases is simply because of the wording of that particular legislation.
It may be a haphazard way to regulate but the alternatives have been limited. It’s certainly an approach landlords and in particular the vigilant estate agents seem to have sat up and taken notice of.
Linking to section 8 would be complex, I think, given the range of grounds. It would be hard to justify, for example, stopping a section 8 on grounds of the tenant’s serious breach of tenancy because the landlord forgot to provide an EPC.
Penalties may be a better bet.
I can barely resist my temptation to point out the opportunities which a full landlord regulation regime would offer, as a direct response to the problems this raises (other jurisdictions may exist). The difference that such a regime might require, to expressions such as ”rent lawfully due” (grounds 8, 10 and 11) – in a circumstance where a landlord had failed to licence themselves adequately to collect rent (and basically be unable to lawfully demand the rent) if they didn’t comply) – are then obvious. I hear that we’re all about the ”compliance” environment nowadays (though ironically, Wales has noRight to Rent requirements…)
As for the above point raised on the section 8 and ‘threatened with homelessness’ – a tangent possibly, but an important one if unaddressed. I would hope at least an arguable point can be made that a person served with a section 8 notice, especially where a court claim has been issued – must be at least ‘threatened with homelessness.” A prospect that the landlord could have screwed up with the possession paperwork, doesn’t undermine that the tenant is at risk of homelessness – particularly if they are not provided with the very advice or assistance which could be secured by the implementation of the Homelessness Reduction Act or ignored by statutory services that might help direct them to the points of contention in the notices (in all fairness, not finding the section 8 duty doesn’t necessarily imply they aren’t being directed to sources to help to challenge the notice).
Good regulation works best when the local authorities educate and encourage landlords and only punish when the landlord fails after a reasonable time to rectify problems. If a property is unsafe then by all means take swift action but there is the world of difference between not having a gas safety check done and not giving the tenant the paperwork for it. The current trend of severely penalising landlords for what may be a trivial mistake (such as not serving the How to Rent Guide, forgetting to sign the Prescribed Information Form or, now, over-charging by even one penny under the Tenant Fees Act) puts landlords on tenterhooks and will (a) drive many out of the market and (b) cause those who remain to be even more choosy with their tenants. Landlords contrast the plethora of laws that they have to follow with the attitude of the police and councils when the tenant runs up massive rent arrears and trashes the property (“It’s a civil matter, sir.” “Can you prove the radiators weren’t missing and the walls weren’t covered in graffiti when you let the house, sir?” “Sorry, we can’t help you.”)
Catching landlords out on technicalities and fining them (especially if the fine is payable to the tenant) is a lousy way to encourage good practice. And before the likes of Geraldine Winkler and Mike say I am defending bad landlords, I am not. I would ask them to consider what would happen if owner occupiers with minor children living in their house were required to ensure the same standards as a BTL or HMO landlord. The courts would do nothing but prosecute defaulting owners. Give Councils the resources to enforce existing laws. Don’t keep adding burdens to our backs. The true rogue will not care if he is in breach of 10 regulations or 15. The conscientious landlord has to spend time and money to comply with the extra 5 regulations.
When s21 is abolished, I predict the situation will get much, much worse for many impecunious tenants. Instead of landlords using s21 and foregoing rent arrears, they will use s8 and the tenant will have a CCJ against him and some will find that landlords seek attachment of earnings orders. Landlords may even decide to bankrupt tenants who have mucked them around. It will also mean new landlords won’t even look at the tenant with a CCJ and the local authorities and housing associations will be asked to step in.
Furthermore, it will become very difficult if not almost impossible to evict for anti-social behaviour. The very people who are affected by it will be reluctant to give evidence against the bad tenants. Tenants from Hell who pay their rent but make the neighbours lives a misery will be laughing. To those who welcome the abolition of s21, I say: Be careful what you wish for.
I would certainly agree that the position on regulation and enforcement has become ludicrously complex. Even as a lawyer, I’d have to say it should not be necessary for either landlords or tenants to have to get a lawyer’s advice to understand it (or indeed local authorities). I’d also certainly agree that councils need the resources (and will) to enforce properly.