After many years of delay, the long-awaited Renters Reform Bill is planned to be tabled during the next Parliamentary session, as announced in the Queen’s Speech on 11 May 2022.
Amongst other things, the Bill will seek to abolish Section 21 (of the Housing Act (HA) 1988) evictions to rebalance the tenant/landlord relationship. The abolition will apply to all tenancies governed by the HA 1988, including tenants of Registered Providers.
The change will provide additional security for private sector and tenants of Registered Providers. For example, up until now tenants could face eviction in circumstances where they have simply challenged unfair practices by their landlord, which has been a fairly regular occurrence in the private sector. However, the Bill also promises to reform and strengthen the landlords’ rights of possession to ensure properties can be returned where necessary. This will be welcomed by landlords, particularly in cases involving very serious anti-social behaviour.
What does this mean for landlords?
Referred to as a ‘no-fault’ eviction tool, Section 21 is often the preferred possession procedure for landlords of Assured Shorthold Tenants as it can be quicker and less expensive than using the procedure under Section 8 of the HA 1988. Whilst there are conditions that must be met in order to rely on Section 21, where these are satisfied, the court is obliged to make a possession order without the landlord needing to establish grounds for possession. Section 21 is therefore a reassuring safety net for a landlord who can be safe in the knowledge that, aside from the relevant notice period, they are virtually guaranteed a possession order. This has been particularly useful in managing tenancies during their probationary or starter periods.
The abolition of Section 21 will mean landlords’ only option in seeking possession is the Section 8 procedure. Accordingly, landlords will have to provide an evidenced reason (“ground”), specified in law, in order to satisfy the court that eviction is appropriate. Even where the Court is satisfied that such a ground has been made out, if it is a discretionary rather than mandatory ground, the Court must undertake a reasonableness assessment as to whether it is reasonable to grant possession. In such circumstances a judge could be minded to give a tenant one last chance by means of a suspended possession order. In addition, for Registered Providers, even mandatory grounds for possession can be subject to requirements of proportionality.
So what next?
Much of the detail is still awaited from the government but all landlords are inevitably considering the impact that the repeal of Section 21 will have on their tenancies. A lot of the concern is around the additional time, costs and evidential burden in seeking possession under Section 8.
The government promises to strengthen the existing Section 8 grounds for possession, including introducing stronger grounds for repeated rent arrears and reducing antisocial behaviour notice periods. In the context of the current cost of living crisis it remains to be seen how a stricter rent arrears provision can be managed. The government has also stated that the court process will be more efficient and therefore Section 8 proceedings will be smoother and quicker than ever before. That can only be welcomed by landlords but much will depend on funding for the courts, who are facing ever increasing backlogs.
Proposals are also being put forward as to circumstances where no-fault possession could be retained in some circumstances. For example, in its consultation on Section 21, the National Housing Federation set out ways in which Registered Providers could continue to pursue no-fault possession proceedings in circumstances of supported housing and temporary accommodation. The Federation states that the inclusion of such grounds would ensure that landlords are not dissuaded from continuing to provide supported housing or temporary accommodation due to the higher risk from the incoming changes that tenancies cannot be ended.
The jury is out as to whether the reforms will achieve the desired balance between security for tenants and for landlords in their respective positions. Updates will follow so, for now, watch this space.