The End of Section 21

I’d suggest sitting down before you read this.

The Secretary of State for Housing, Communities and Local Government, James Brokenshire, has announced/is to announce depending on when you read this, that the Government is to abolish section 21. Honest. Really. Truly.

Feel free to take a moment. I found out on Friday, under embargo, and am still taking a moment.

If you have recovered, read on. From the press release:

The Communities Secretary, Rt Hon James Brokenshire MP, said:

“By abolishing these kinds of evictions, every single person living in the private rented sector will be empowered to make the right housing choice for themselves – not have it made for them. And this will be balanced by ensuring responsible landlords can get their property back where they have proper reason to do so.

When is this going to happen? Not quickly, that much is clear. There will be a consultation:

As part of a complete overhaul of the sector, the government has outlined plans to consult on new legislation to abolish Section 21 evictions – so called ‘no-fault’ evictions.  This will bring an end to private landlords uprooting tenants from their homes with as little as eight weeks’ notice after the fixed-term contract has come to an end.

And, it appears, that as part of that, that proceedings under section 8 notices and Housing Act 1988 Schedule 2 grounds of possession are also to be reviewed:

Under the proposals, landlords will have to provide a concrete, evidenced reason already specified in law for bringing tenancies to an end  a marked step-change from the current rules which allows landlords to evict tenants at any time after the fixed-term contract has come to an end, and without specifying a reason.

And to ensure responsible landlords have confidence they will be able to end tenancies where they have legitimate reason to do so, Ministers will amend the Section 8 eviction process, so property owners are able to regain their home should they wish to sell it or move into it. 

Court processes will also be expedited so landlords are able to swiftly and smoothly regain their property in the rare event of tenants falling into rent arrears or damaging the property – meaning landlords have the security of knowing disputes will be resolved quickly.

Ministers will also work with other types of housing providers outside of the private rented sector who use these powers and use the consultation to make sure the new system works effectively.

There will, of course, have to be changes to the existing Schedule 2 grounds. But these need to be carefully considered (and also the extent of their application – would they apply to all assured tenancies, including social tenancies?). And expedition of court processes? As per my previous posts on a ‘housing court’, this is in large part a question of resources.

And of course, there are all those requirements that have the invalidation of a s.21 notice as their sanction for breach, from deposit protection to provision of gas safety certificates. All those will need re-thinking.

So there will be much at stake, in the consultation and in the consequential legislation (if it happens).

And as Labour’s response from John Healey, Shadow Secretary of State points out

“Any promise of new help for renters is good news but this latest pledge won’t work if landlords can still force tenants out by hiking the rent.”

But still, blimey.

We live in uncertain times. The life span of the current government is anyone’s guess. But this is quite remarkable, and would have been unthinkable even a few years ago. As Labour announced that its policy was to end no fault evictions some time ago, we are now in a position where both the major parties have as their stated policy the ending of section 21.

We should also note that the First Minister in Wales announced on Friday that the Welsh Government will be banning section 21. This is a little baffling, as when Renting Homes (Wales) Act 2016 finally comes into force, it will scrap assured shorthold tenancies altogether, and section 21 will cease to exist. However, in its current form, Renting Homes (Wales) Act does include ‘no fault’ evictions by landlord’s notice, so it has to be presumed that what was intended was that RH(W)A will be amended to remove that. Which will no doubt delay it further.

About Giles Peaker

Giles Peaker is a solicitor and partner in the Housing and Public Law team at Anthony Gold Solicitors in South London. You can find him on Linkedin and on Twitter. Known as NL round these parts, and still is Nearly Legal on Google +.
Posted in Assured Shorthold tenancy, assured-tenancy, Housing law - All, Possession and tagged , .

38 Comments

  1. What about short term lets, like students? I guess a fixed term AST will still end at the end of the fixed term? I was advised that I should issue section 21 to coincide with the end of a fixed term as a “belt and braces” move.

    • Student lets should be the least of the problem; they usually leave after the end of their term anyway.

      If Section 21 were needed for students we would already have a huge issue with students impacting next year’s student tenants because Section 21 enforcement usually takes 3-5 months anyway.

      So not really an issue.

    • This is really a reply to Fred B – Students are a significant issue with this change.
      You need to also think about the students who want to move in as well as the students who plan to leave. How can you sign-up the next round of students if you cannot provide comfort that the existing round of tenants will leave?

      Student lettings are a process. Not a single event.

      Add in the Article 4 HMO restrictions in a lot of student towns and the potential for major housing problems can appear…

      The last time we had security of tenure like this, student populations were significantly smaller…

      Also remember that security of tenure ALWAYS comes in with rent controls… (maybe not immediately, but looking at the comments below and others, within 24 months.

      (In the end, the rogue landords will still persist under the radar and the rent becomes a “cash in an envelope” exercise).

    • Hmm, I made an input to that consultation specifically around student lettings.

      I’m not optimistic that this will happen as I cannot see this easily fitting into the laws except for exemptions re HMOs (Planning class C4 housing/Sui Generis) and holiday lets (is this a license vs a tenancy?). Student halls of accommodation are easy as this already has separate definitions (see the 2004 Housing Act for example).

      If we consider that the government is fully stuck into Brexit mode, the ability for spare head space to consider smart legal clauses to cover this type of tenant is weak at best. I.e. don’t hold your breath…
      – I’m fully expecting that the only legal changes here will just be a “simple” repeal of Section 21 and that’s it.
      – The rest will have to lump it in the bucket of “lets hope it all works out in the end” approach which seems to be the current operating process for the government of late…

      – Ok, I must admit that the “Fitness for Habitation” bill was a good result! ;-)

    • I suspect it probably will happen. Having worked with MHCLG people during the H(FFHH)A, they are very alive to the ramifications of things. They may be overruled by their political bosses at times, but these things most certainly will be thought about.

  2. The phrase ‘unintended consequences…’ springs to mind. The implications for deposit protection and gas safety and whether these reforms would extend to other tenancies are valid points indeed.

  3. We issue very few S21s and the only reasons we do are a. landlord or member of their immediate family needs the property as their home b. landlord needs/wants to sell c. tenant in breach of conditions of their tenancy. If the new legislation makes possession easier in these situations it will not be a game stopper but when you consider S21 (getting my house back easily if I needed to) was a factor that encouraged many landlords into the sector, removing this will remove this and likely have a negative effect (in terms of people wanting to be landlords).

  4. On one level it is a strange turn of events given that the response to Ed Milliband’s plans to introduce three year fixed term tenancies was to accuse him of being a Venezuelan style Marxist.

    Yet on another, the explosion in the size of the private rented sector following the collapse in home ownership means that even moderately well heeled proto-Tory voters are otherwise doomed to raise their families in homes with no security of tenure – not a good look!

    All we need now is some proper rent control, oh and something to sort out the rogue landlords responsible for the 25% of all private lettings in England that fail the government’s decent homes standard*

    *Source, 2019 English Housing Survey

  5. It will make for stronger intentionally homeless decisions if a Court has decided the evidence leads to an eviction.

  6. I think that this is a good thing for Landlords, the Gov. will use this to improve S8, for example if a Landlord want to gain possession because they want to move back in, they may not require it to be in the tenancy agreement, but they may still require that the tenancy can only be ended when there is a break clause or the end of a tenancy coming up and perhaps with with say 90 days instead of 60.

    it will no doubt add some sort of 2 month notice requirement to S8 to replace that of S21 for when a tenancy is coming to an end.

    They may remove the ability of a tenant to stop a S8 G8 claim by reducing the arrears to under 2 months and make it only that there was say 3 months arrears at the time proceedings were started, then when it came to Court the Judge could decide whether they were going to consider it mandatory, in other words, it is would be a stronger case than a case brought on S8 G10/11 alone because they went to 3 months arrears but perhaps still not mandatory. One of the biggest reasons people used S21 was because tenants reduced arrears and cost them their fee.

    I can see Landlords wanting G13/14 becoming a mandatory ground, especially in the the event of damage caused to a property, one of the biggest issues for Landlords is when a tenant in in situ, has caused thousands in damages and it allowed to remain and continue damaging the property.

    The Gov cited that revenge eviction is still a problem and one of the drivers here, I agree this is still a huge problem because even if the tenant ticked all the boxes, they are only assured 6 more months. I would like to see this extended to 3 years with no rent increases (post the improvement order being fully complied with), this would give a proper incentive to Landlords to keep their properties in good order.

    Deposit protection and all the other blockers will all have to be moved to apply to any S8 claim, the easiest way to do this is to amends S213 et al to apply to S8 as well as S21 (incase any remnant of S21 is left – I can see S21 remaining not as a no fault but merely as a way of giving notice that a fixed term tenancy will not be renewed or that a break clause is being exercised. I would like to see these all increased to 90 days for Landlords. That way a tenancy would not drift into SPT.

    Whilst it is perfectly reasonable that a tenancy ends when it says it is going to end or says it CAN end with a break clause, (subject to the protection of Deposit Protection et al that are on Form6A). However, I would like to see some statutory minimums in tenancy length, Labour want 3 years the Tories probably might go for 2 years, but both parties need an option to end a tenancy early, the tenant with say a statutory break clause every six months and the Landlord when there are grounds under S8, but I would increase the current 60 days to 90 days except where there has been serious damage to the property or failure to pay ANY rent.

    I am sure others will have other ideas

    • Hi David. This is most definitely not what is being proposed. That boat has sailed. Fixed terms will be an irrelevance. There will be no break clauses.

      Both Labour and now the Tories have as their express policy ending ‘no fault’ evictions and no limits on term of tenancy.

    • Well yes there is. A fixed term can’t be over 7 years without being registered with the Land Registry for starters. But I think you are being deliberately obtuse. Ant tenancy that can be ended, without fault or ground, at the expiry of the fixed term is limited.

  7. Hi Giles, What I am no clear about is if the rent can be hiked at the end of each tenancy term then there is a way for the landlord to practically end the tenancy at the end of term. If so, why would say that “fixed terms will be irrelevance” ?
    Thanks, Ben

    • What tenancy term? A fixed term would only have practical effect for setting a period within which the tenant could not give notice. There would be zero requirement on the tenant to enter a new fixed term at the end of that because what is the landlord going to do if they don’t? That is the point of indefinite terms.

    • Ben,
      To answer what I think is the spirit of your question, no, a landlord won’t be able to practically end a tenancy by playing games with the rental amount. A S13 rent increase allows an opening for dispute to the first-tier tribunal.

      I still think fixed terms would have meaning for tenants as it can lock in the rent for the period. Unless I’m misunderstanding something here.

    • For a year.
      But the re-evaluation of Section 21 began, if I remember correctly, with Labour initially advocating for three-year minimum terms.

    • Yes. There would not be any problem with contractual terms specifying a period of set rent, as far as I can see, regardless of whether there is a fixed term or not.

  8. Thanks Giles, so basically once the first fixed term is over, it will become rolling = indefinite … One would think that some provisions will need be added at least to catch up with inflation. That it is just the additional uncertainty that we needed in the post-brexit-vote wobbly housing market. Many thanks for the article and for he swift response.

    • We’ll see where the consultation leads. I’d imagine a lot of tenancy agreements with a built in annual rent review, though statute may restrict that.

  9. What happens if the tenant refuses to agree any rent increase at any time? What protection will a landlord have?
    I can see landlords selling up, which will mean:
    – tenants will lose their home
    – a dearth of property to rent in its place
    Like many of these areas where government interferes, the law of unintended consequences will apply.

  10. Am wondering how this would work on an ast started before the implementation date of this change. Would it then apply retrospectively or only to tenancies created after the new law?

    • Dunno. We would have to see detailed proposals, and that is quite some way away. (But it wouldn’t be ‘retrospective’ – it isn’t a matter of the tenancy agreement. Section 21 is by operation of statute.)

  11. It seems to me that Rent Tribunals will be deciding what market rent is going forward, with the only market to judge it on being their own previous decisions: I.e. it’s the end of the market.

    • Well we’ll probably see landlords use rent review clauses more rather than go to tribunal for rent increases, I suspect. If anything the knock on effects of these changes will probably be a need for more explicit consumer rights guidance on how rent review clauses should be constructed. (E.g. We could probably do with more explicit guidance from the CMA about what constitutes an unfair term in relation to rent-setting.)

      Of course it’s all theoretical at this point as basically anything could happen over the next few years.

  12. I wonder if the legislation will even keep assured shorthold tenancies around as a form of tenure distinct from non-shortholds? On the one hand it seems a bit pointless to do so if s.21 is repealed as its pretty much the defining feature of a shorthold, on the other hand there’s a whole bunch of regulation regarding deposit protection and the various pieces of prescribed information that’s tied up in assured shorthold status and not really intended to apply to non-shortholds in the social housing sector etc.

    In an ideal world I think the better option to minimise unanticipated knock-on effects would be wholesale reform of the housing tenure system to implement completely different forms of protection for the private rented sector compared to registered providers of social housing as is gradually happening in Wales. (And preferably try to minimise the legal significance of the tenancy/licence distinction as far as possible for residential lettings as frankly it’s an increasingly outdated relic of 1920’s era thinking.)

    But that’s an even bigger project than repealing s.21 and despite the valiant efforts of the Law Commission back in the Blair years is probably not going to happen. Then again I would have said the same about repealing s.21 a month ago so who knows?

  13. So, another change that makes for good soundbites but is likely to adversely affect the weakest and poorest in society. Risk/reward will swing very much to the risk end.

    Those at the bottom, who should be in social housing, are going to find it much harder to get PRS housing as landlords will not want to take on the risks of having a tenant with ASB, who damages property, who is at the mercy of the benefits team, etc, without being able to get them out without a lengthy evidence-gathering period and lengthy, defended (regardless of merit), and costly legal process.

    Those people will end up in the clutches of the criminal landlords who won’t care about the legal processes anyway.

    The government should be looking at ways to improve enforcement and provide more social housing, not driving out private landlords so that their build to let chums can cream off the higher end.

    • Michael

      This ‘risk assessment’ sounds like stereotyping. In my experience, amongst the worst trashers of properties are ‘young professionals’ and landlords lose the most from professional seeming fraudsters with fake references etc.

      I’ll grant that Universal Credit is a disaster, but section 8 and ground 8 exists. Quite why landlords are so terrified of having to evidence a case has always puzzled me.

      And defended ‘regardless of merit’? Not on legal aid.

    • Neighbours will complain to LL about noise and other behaviour by tenant, but getting them to maintain a diary or provide a statement for court proceedings is difficult (in my experience).
      I read a report a few days ago where a social housing organisation managed to get an eviction for ASB after 10 years; not somewhere I want to be.

    • Because, rightly or wrongly, LLs will view such people as statistically more likely to become problem tenants and avoid letting to them.
      Who, in their right mind, wants months or years of hassle?

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