*Article first published in Leeds City Dweller Magazine – October 2019*
Landlords of residential property usually let their properties out on Assured Shorthold Tenancies (ASTs). These are short, fixed term tenancies which can be ended by the landlord serving a section 21 notice. Earlier this year, the Government began a consultation on abolishing section 21 notices.
What is a section 21 notice?
A section 21 notice is a “no fault” notice. This means that a landlord can ask a tenant to leave after the fixed term of the tenancy has ended without giving a reason.
There is another type of notice that a landlord can serve, known as a section 8 notice. This notice requires the landlord to rely on a ground for possession – i.e. the tenant must be at fault. The grounds include disrepair, non-payment of rent and anti-social behaviour.
Why is the Government looking to change the way landlords seek possession of their rental properties?
There has been concern for some time that tenants do not have security in their rented homes. As it stands, they can be evicted at the end of the fixed term (often just 6 months or a year) even if they have been model tenants. The Government is considering a new system whereby a landlord would need a good reason to evict a tenant.
Landlords often rely on section 21 notices even where their tenant is at fault because the procedure is more straightforward that the section 8 procedure and the case can be decided without a hearing. Relying on a section 8 notice means waiting for a court hearing. The National Landlord Association noted that many landlords have “no confidence” in the courts to deal with section 8 proceedings “quickly and surely”.
What changes are proposed?
The Government is consulting on several proposals including:
- abolishing section 21 notices and changing the way landlords seek possession of their rental properties.
- broadening the section 8 grounds for possession to include cases such as where the landlord wants to sell the property without a tenant in it (known as “with vacant possession”), or if they (or a family member) want to move into the property.
- streamlining the court procedure for section 8 notices.
What does all this mean?
These proposals seem likely to be good news for tenants. If they abide by the terms of their tenancy agreements, then they are likely to be able to enjoy the security of staying in their rented home until they are ready to move on.
For landlords, it is to be hoped that whatever solution the Government decides upon enables landlords to recover possession of their properties simply and effectively when they have good reason.
Finally, there is a concern that the abolition of section 21 notices might lead to rent increases. There are two reasons for this. Firstly, one of the reasons that the rental market is so vibrant is that landlords know that they can evict their tenants at the end of their fixed term. Without section 21 notices, there may be fewer landlords, therefore fewer rental properties. The reduced competition could see rent rise. Secondly, without the ability to serve a section 21, there is a fear that landlords will simply try to force tenants out of the property by increasing the rent to an excessive level.
General election 2019
I originally wrote this article prior to the announcement of the December 2019 General Election. Therefore, we will have to wait to see whether the next Government carries out these proposals. We will keep you posted!
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