Section 21 Ban

Section 21 Ban

The Government has announced a consultation to look into banning repossessions under Section 21 notices, says David Lawrenson of www.Tenants-Renting-Guide.com. This could come in as early as 2022.

Section 21 is sometimes called the “No Fault Notice” ground  – and is the one that landlords can use to get their property back without having to give any reason.

Pressure groups like Generation Rent and housing charity, Shelter say Section 21 repossessions are often being used as retaliatory evictions where a tenant has legitimately complained about a non-repair.

And they also have been calling on it to be scrapped because they say tenants want and deserve more security of tenure than is the case currently, where a tenancy can be ended with just 8 weeks’ notice under Section 21, (once any fixed period of a tenancy has ended).

Section 21 Ban – The Landlords View

Landlords argue (with some justification) that they are forced to use Section 21 because it is a tad faster than using Section 8. Section 8 is the form that was actually designed to be used where a tenant is 2 months behind on rent, (amongst other reasons).

Section 21 doesn’t require a court hearing, whereas Section 8 does.

With the courts system badly clogged up with cases, if tenants fight all the way to when a bailiff has to come to seize a property, the Section 8 process usually takes a whopping five to six months from a private landlord applying to the courts for their property to be repossessed.

So, in practice, if they know their rights and how to use the system, tenants should never actually end up on the streets with short notice as Generation Rent and Shelter claim.

Landlords say such long time scales, (in which they are usually getting no rent at all) are simply ludicrous. The fact that Section 21 can knock a month off such long timescales is why many landlords use this route, (even though Section 21 processes do not allow for any monies to be recovered).

Section 21 Ban – Retaliatory Evictions: How Common are They?

But whilst there are undoubtedly some rogue landlords who do use retaliatory evictions, they may not be all that common, say landlord groups.

They may have a point.

The government’s own English Housing Survey data shows that in 90 per cent of cases, tenancies are actually ended by the tenant rather than the landlord, and that average tenants live in their rental properties for 4.1 years, (long after any fixed term has ended).

Landlords say this proves that the vast majority of landlords are not chucking people out on a whim and tenants actually stay for quite a long time, mostly leaving at a time that suits them.

Further research by Manchester Metropolitan University for the Residential Landlords Association found that in a large majority of cases where tenants are asked to leave their properties under Section 21 notices, there is a clear reason. They say, half of the notices are used where tenants have rent arrears, are committing anti-social behaviour or damage to the property. Other common reasons include the landlord needing to take back possession of a property for sale or refurbishment.

Thus, the report’s authors confirm landlords’ arguments about whether the use of Section 21 notices can properly be described as “no fault” evictions, as Shelter have called them.

Section 21 – The Political Backdrop

Of course, there is a political element to banning Section 21, which, incidentally has been Labour policy for some time.

The Tories have arguably just copied the policy in a bid to look like the private rented sector tenants’ friends, just in time for their votes at the next general election.

But, there seems to be a difference between Labour and Tory on this.

The Conservatives, as part of the consultation, will also be looking at speeding up the repossession processes via some sort of special housing court. Landlords, irritated with the long court waits to recover possession, would certainly welcome that.

The Communities Secretary, James Brokenshire, has said there could also be the ability to recover property for returning intending occupiers, for refurbishment to take place and for landlords wishing to sell. In all these cases they would be able to get their properties back. Labour’s stance on these recovery reasons seems unclear at this time.

Policing the Exemptions

But we wonder who would police such “recovery reasons” to make sure they were valid? Not the local authorities – they already have more laws to use against landlords than you can shake a stick at, but usually don’t use them due to lack of resource.

In Scotland, where Section 21 was banned 18 months ago, policing it is done via a court process, but who is there to check that the landlord really sells once he’s regained possession or actually really moves in himself? Some tenant groups in Scotland complain that these “get outs” are indeed abused by landlords.

And herein lies the problem: The private rented sector is already full of laws and regulations that sound great but which are not actually enforced, due to lack of people to do the actual enforcing – a source of great irritation to landlords and tenants alike.

Section 21 Ban – A “Posh Tenants” Charter?

If Section 21 were to end, could the more “risky” tenant become less attractive to the average landlord?

Imagine this scenario. Two applicant tenants turn up, both interested in renting a property from a landlord. One is an aspiring graduate couple. The other is a couple who have come from a council recovery programme from the Hostel Drug-New Life Restart programme.

If there still was a Section 21 No fault Notice option in place, a landlord might say, “Well, I gave it a try with the ex-drugs couple, but the annoyed neighbours ringing me up every night was just too much, so I gave them notice in the end”.

But with no Section 21 No Fault Notice option, would they be as likely to take the risk? The tenants could be there for a long time, unless they are dumb enough to do something like not pay the rent for 2 months or run a cannabis farm at the property – and get caught.

Joe Halewood, who could no way be described as a private landlord lover, but is someone who does understand the private rented sector and housing generally, agrees that this is a real risk.

He has written a great piece on this, which slates Shelter for being naïve. This extract is taken from his very interesting blog at wordpressSpeyjoe2. He says:

This doesn’t just affect general needs rented tenants but everyone who is in a homeless hostel or in a domestic violence refuge as the exit from these is mostly to the private rented sector. If hostels and refuges can’t move people on then they can’t move people into homeless hostels or domestic violence and abuse refuges! Yet today we see the chief executive of Shelter lauding the proposed removal of the no fault eviction on mainstream TV, when the policy will see more homeless on the streets and more women having to suffer domestic violence and abuse because there is nowhere they can flee to that is available”.

Section 21 – Alternative View

I have no great issue with removing Section 21, as long as faster possession in event of having to sell /refurbish/move in oneself and for antisocial behaviour are in place too.

Another alternative way to go would be to have standard 3 or 5 year tenancies, but with a get-out for landlords after 6 months, which could be used where the tenant proved unsatisfactory. (Complaining that the boiler did not work, would definitely not count as being “unsatisfactory”)

This system could also give the tenant the ability to leave with them giving say, 2 months’ notice any time they like after the initial 6 months has ended – so real flexibility for them, but also giving them the longer tenancy option that families need.

Including a facility for landlords to recover a property for selling it, for moving back in or for refurbishing it would need to be included. (Without such “recovery-reasons”, most properties that were say, let for a year whilst say someone is working away, would risk sitting empty). But such recovery reasons cases would need to be tightly policed to prevent abuse – which means some resource must be devoted to this.

A specialist housing court which could move much faster than the currently clogged up court processes would thus be in the interests of both tenants and landlords. But, again, this needs to be adequately resourced.

I can’t think many would object to this – and the  mortgage lenders, (a few of whom still bizarrely and stupidly stipulate that landlords cannot issue fixed terms over 12 months), would surely not object to the potentially longer tenancies either. (I don’t think lenders ought to have a problem with indefinite tenancies either, but that’s for another blog post!)

But my concluding point is that, whatever is done with Section 21, future regulations must be properly policed, so the rogue landlords and bad tenants are cut out of this business. And to deal with bad tenants and bad landlords, the bar for what counts as antisocial behaviour must be lowered a lot.

Faster processes are needed for all cases that come to court, but there has to be enough people employed in making sure processes are not abused.

But I’m not hopeful. We have seen a load of new regulations that have been dumped on the private rented sector in recent years, but many are not enforced due to lack of resource.

I’m not overly confident this will change in the future.

The only thing that will happen is that we will continue to see the private rented sector as a place where politicians will try to win tenants’ votes.

So, please, if you hear about grand plans to make the private rented sector fairer, ask the politicians how they will ensure new regulations are actually going to be enforced! Otherwise, nothing will really change.

 

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