The End of Section 21 – Protecting Your Position

1 Introduction

It looks as if many landlords’ fears are going to come true.

The Government has indicated in the Queen’s Speech that they are going to be removing landlord’s right to evict without having to give a reason, under the no-fault section 21 procedure (s21 of the Housing Act 1988).

Many landlords are already panicked by this and posed to sell up.  But is it really that bad?

Let’s take a look at what has been announced so far.

The Housing Dept Press Release on 19 December, said:

Under the plans, millions of renters will benefit from a new lifetime deposit scheme, which will see their hard-earned deposit move with them from property to property – giving tenants more control over their lives and keeping more of their cash in their pocket.

Proposals to abolish no-fault evictions have also been confirmed, meaning landlords will no longer be able to uproot tenants from their homes at short notice and with no good reason – bringing greater security to millions of families who live in rented accommodation.

This will be matched with new powers to strengthen the rights of landlords to gain possession of their property through the courts when they have a clearly valid reason to do so, in order to create a fair market where good and responsible landlords flourish.

The Background Briefing Notes for the Queen’s Speech, also published on 19 December 2019 have a lot more information on what is planned.

The notes on the proposed Renter’s Reform Bill start on page 46.

Here are the notes on the bill:

The purpose of the Bill is to:

Introduce a package of reforms to deliver a fairer and more effective rental market.

The main benefits of the Bill would be:

• Improving security for tenants in the rental sector, delivering greater protection for tenants and empowering them to hold their landlord to account.
• Strengthening the rights of landlords who need to gain possession of their property when they have a valid reason to do so.
• Improving the experience of those living in the private rental sector and the affordability for tenants when moving from one tenancy to the next by introducing a new lifetime deposit.
• Improving standards in rented accommodation, driving out rogue landlords and helping to professionalise the sector, with all tenants having a right to redress if their rented properties are not safe and healthy.
• Professionalise letting agents, to the benefit of tenants and landlords.

The main elements of the Bill are:

• Abolishing the use of ‘no fault’ evictions by removing section 21 of the Housing Act 1988 and reforming the grounds for possession.
• Giving landlords more rights to gain possession of their property through the courts where there is a legitimate need for them to do so by reforming current legislation. In addition to this we will also work to improve the court process for landlords to make it quicker and easier for them to get their property back sooner.
• Introducing a new lifetime deposit so that tenants don’t need to save for a new deposit every time they move house.
• Alongside these, we will continue to develop and implement measures to wider access to and expand the scope of the database of rogue landlords and property agents. Giving greater powers to drive improvements in standards, and empowering tenants to make an informed choice about who they rent from.

In addition:

• The Government has committed to giving access to information on the database of rogue landlords and property agents to tenants, and has consulted on widening the scope for entries on the database.

This Bill will apply to England only as housing policy is devolved to Wales, Scotland and Northern Ireland.

Later in the briefing paper, under the housing heading, there is much discussion about home-ownership and also the following:

• To help those who rent, the Government will build a rental system that is fit for the modern day – supporting landlords to provide high quality homes while 49 protecting tenants. The Government’s Better Deal for Renters will fulfil our manifesto commitments to abolish ‘no fault’ evictions and to introduce lifetime deposits, alongside further reforms to strengthen the sector for years to come.

The paper also quotes the following Key Facts on the Private Rented Sector:

• There are currently 4.5m households in the private rented sector making it the second largest tenure (19 per cent of households).
• The quality of rented housing has improved over the past decade – the number of private rented homes failing to meet the Decent Homes Standard is down 15 per cent since 2010.

There is also new legislation planned on building and fire safety but it looks as if these will mainly deal with high rise buildings (following on from Grenfell) and so will not affect the majority of private landlords (unless they are renting out a property in a high rise building).

When is all this likely to happen?

It’s hard to say. The government has a heavy legislation program and is also having to deal with the massive workload imposed by Brexit.

As new legislation has recently been made to protect tenants against fees, the housing legislation may be put on the back burner for a while to allow other bills to take precedence.

On the other hand, the other bills are probably going to be more controversial whereas all parties seem to be united in their desire to remove no-fault evictions from the statute book.

However, the government has promised to reform the eviction process first.  Which may take some time, particularly in view of the big problems in the courts caused largely by cutbacks and court closures.

So we shall just have to wait and see.  But the best guestimate is some time in 2021.

What can landlords do in the meantime?

Quite a lot. Much of the housing legislation is not going to change in the short term, other than the items set out in the helpful Nearly Legal blog post here. Which in summary are:

• Decisions in the right to rent challenge litigation, and
• The Trecarrell House case on gas safety certificates and section 21 (which will be rendered irrelevant when section 21 is finally abolished), and
• The ending of the transition periods for
  • The Homes (Fitness for Human Habitation) Act 2018 (in England) on 20 March 2020, and
  • The MEES legislation on 1 April 2020, and
  • The Tenant Fees Act 2019 (in England) on 1 June 2020, and also
• The bringing into force of the electrical safety rules requiring 5 yearly checks in (probably) April 2020 – as discussed here.

So landlords need to get a grip on all of those.

However, the most important things landlords can do is ensure that:

• They are compliant with all the relevant legislation, and that
• They are EXTREMELY careful in their choice of tenant, and
• They have proper insurance, and
• That proper records are kept so compliance and tenant fault can be proved where necessary.

The start of a new series

I am going to be publishing a series of articles which will lay out most of the things the landlords need to do to protect their position and render themselves largely immune from the threatened new laws.

So watch out for this!