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.