No fault evictions’ – a thing of the past?
Section 21 of the Housing Act 1988 has long provided landlords with the mechanism to evict their tenants at the end of the fixed term under an Assured Shorthold Tenancy by serving what is known as a Section 21 notice. Often named as the 'no fault eviction notice', Section 21 notices have given landlords the ability to legally bring about the end of a fixed-term tenancy with the ability to obtain a Possession Order from Court in the event the tenant does not leave the property as requested.
It is important to note that Section 21 notices can only be used to evict a tenant at the end of the fixed-term of the tenancy, and cannot be used to terminate a tenancy any earlier than the end date stated in it. In addition other requirements must also be met before serving a Section 21 Notice, such as providing the tenant with a valid Energy Performance Certificate and Deposit Protection Certificate, to name but a few.
In circumstances where a landlord wishes to terminate a tenancy prior to the end of the fixed term tenancy, they should consider as to whether there is any scope to use a Section 8 notice rather than a Section 21 notice, which details at least one of the grounds set out in the legislation that the landlord seeks to rely upon, often a breach of the tenancy by the tenant.
The Government has recently published the results of a Consultation held in 2018 to discuss potential changes to the private residential rental sector. In short it appears as though it is likely that Section 21 notices based on no fault grounds are likely to be abolished. Should such changes come into effect this will mean that landlords will no longer be able to freely evict tenants at the end of their fixed-term tenancy, without good reason for doing so. In addition, it appears as though changes to the Section 8 possession process are being considered in order to allow landlords to regain possession should they wish to sell or move into the property.
Reasons and Effects
The question must therefore be asked; what is the reasoning behind the Government's decision to potentially abolish Section 21 notices? Housing Secretary James Brokenshire has stated that there is evidence to show that evictions based on Section 21 notices are one of the biggest causes of family homelessness in England and Wales and that the proposed changes would offer more stability to family tenants. Prime Minister Theresa May has also spoken about the topic, stating that the changes will protect responsible tenants from "unethical behaviour." Mrs May further stated that the move will provide tenants with "long-term certainty and the peace of mind they deserve." Therefore, it would appear as though the reasoning behind the changes is to offer tenants a greater level of protection, with further credence being given to this assertion by the Prime Minister's statement that the Government was acting to prevent "unfair evictions"
How will this affect Landlords?
The National Landlords Association has suggested that the proposed changes are likely to create "chaos" and make fixed-term tenancy agreements "meaningless." One of the concerns expressed by the Chief Executive of the National Landlords Association (Richard Lambert) has been that by allowing Section 21 notices to be abolished, a new system of indefinite tenancies would be created. However, in the recently published results of the Government Consultation, it has been clearly set out that the changes will seek to find a balance between the interests of both tenants and landlords as they do not wish to see a decline in the private renting sector. The proposed changes to be made to the Section 8 process are likely to be made to ensure that landlords' interests are also protected under the new regime.
If and when such changes are implemented tenants will be afforded much greater protection than they currently have. It is likely that landlords will no longer be able to evict their tenants at short notice without good reason for doing so. Instead it is likely that landlords must show a "concrete, evidenced reason already specified in law" to bring the tenancy to an end.
Moving forward, landlords should now take into consideration these proposed changes when entering into new tenancies of their property. Careful consideration should be given to how tenancies are drafted, including planning for an eventuality whereby a landlord wishes to remove a tenant from their property. The intricate details of the changes are yet to be announced and the process of bringing them about is sure to be a long one, yet it is best to ensure that you are aware of, and prepared for, the changes ahead where at all possible.