Over the weekend the Government published a consultation on plans to axe Section 21-so called ‘no fault’ repossessions in the private rented sector. In this blog first published on Anthony Gold, RLA policy director David Smith takes a closer look at the consultation.
This follows on from the original announcement that the government would be ending section 21. Wales is doing its own thing and this will probably end up waiting until the Renting Homes (Wales) Act comes into force.
As a reminder this is not a consultation about whether to get rid of section 21, that decision has to all intents and purposes been made. This consultation is about how to get rid of section 21 and also about the consequential amendments that will be made to provide landlords with appropriate confidence that they can recover their property when appropriate.
The consultation does show an evolution in government thinking. Instead of referring to section 21 as “no fault” eviction the consultation explicitly recognises that section 21 is used in fault cases as well. But the government is of the view that to use section 21 where a section 8 ground would be appropriate is insufficiently transparent and it is looking for a clearer relationship between landlords and tenant where clear reasons are given for actions. There is some fairly clear echoes of the more “consumer” approach to tenancies that has been seen from the government in the last 18 months.
There is a big change hidden in here though. Previously, the government has been talking of getting rid of section 21. In this consultation they are now talking about getting rid of Assured Shorthold Tenancies altogether and making all tenancies assured. This has a certain logic at first blush in that the main impact of an AST is to allow the use of section 21. However, it entirely ignores the fact that Assured tenancies have other rights and obligations. For example, there are possession grounds which only apply to Assured tenancies and not to ASTs and, additionally, Assured tenants have a right of first refusal if the property is sold. These issues are not canvassed at all in the consultation which leads me to suspect that this point has not been entirely thought through.
The consultation specifically mentions faster court possession mechanisms. However, this is based on achieving a more efficient issuing process with fewer user errors using digital issuing. There is also a suggestion that bailiff resources are being freed up and re-prioritised toward evictions which will make these faster by approximately one week. The consultation also states that the current court rules require that hearings in possession cases are within eight weeks of issue. This is not quite right. Civil Procedure Rule 55.5 (3)(b) actually states that “standard period between the issue of the claim form and the hearing will be not more than 8 weeks”. This is not really the same thing. In fact, the rules require that most hearings are within 8 weeks and in practice this is a rule that is honoured more in the breach in some courts. The consultation also looks at whether accelerated (paper-only) possession proceedings should apply to some section 8 grounds for possession under the new regime.
The consultation also discusses fixed term and periodic tenancies. The government appears minded to allow for fixed term tenancies. Naturally, these will only really be binding on tenants as landlords will effectively be offering tenancies that cannot be ended. However, there is a number of questions asking whether tenants should be bound to a fixed term by agreement. There is also a mention of break clauses but here there is a little bit of confusion. The consultation appears to suggest that landlord can make use of break clauses to end tenancies but this is not correct. Absent section 21 a landlord cannot use a break clause in a Housing Act 1988 tenancy as section 5(2) of the Act jumps in and simply grants a new periodic tenancy. Therefore, a break clause is only of value to a tenant if section 21 is removed. In practice, I see little prospect of a landlord being prepared to offer a break clause that is only for the benefit of the tenant.
In relation to students and other potential fixed term tenancies the consultation is open. There is discussion of widening the ground for possession of student tenancies to apply to landlords who are not educational institutions. Again, this is an error. There is in fact no ground for possession against students by anyone. There is a ground to recover possession of a property which has previously been let to students, is now being let to someone else, and which is wanted back to let to students again. However, this is clearly a separate thing.
The consultation discusses a range of changes to section 8 grounds for possession. These include:
- widening the ground for possession for re-occupation by the landlord to also apply to the landlords family;
- adding a new ground for possession for sale;
- amending the ground for possession for rent arrears. This would mean that notice could be served for 2 months arrears as now, but if one month’s arrears existed as at the date of the hearing then possession would have to be granted by the courts.
There is a lot in this consultation. There is a longer period of 12 weeks to respond which will help. However, this may also be reflective of the fact that we will shortly find ourselves in a period of transition between two governments. There is also the element of uncertainty that a new minister may have a totally different view about this entire scenario and may not be prepared to get rid of section 21, or may have an even more hard-line view on the matter. Normally, the summer is a quieter period in politics. For the private rented sector this will not apply!
*Disclaimer: The information on the Anthony Gold website is for general information only and reflects the position at the date of publication. It does not constitute legal advice and should not be treated as such. It is provided without any representations or warranties, express or implied.*
- Since the announcement was made in April that the Government was to consult on axing Section 21, the RLA has worked tirelessly to highlight the impact the changes will have on landlords and the knock-on effect on tenants, with appearances on BBC, ITV and Sky News and coverage in all major national newspapers.
- Read a blog by RLA policy director David Smith on how axing Section 21 does not mean homes for all here.
- In the wake of the announcement Housing Minister Heather Wheeler wrote exclusively for RLA magazine Residential Property Investor, vowing to work with the association to develop a possession process that works for all. Read what she had to say here.
- The RLA is urging landlords to write to their local MP about the controversial proposals to abolish Section 21. The association has now written a template letter which landlords can send to their local MP at the click of a button, on the MY RLA platform. There is also a section for landlords to add their own experience of the possession process.