Some thoughts on the intention to abolish section 21 - part 3
27 September 2019
2 clear reasons why the abolishing s.21 is bad
There are 2 significant reasons why I believe the proposal to abolish s.21 will adversely affect tenants.
Firstly, the ability to use s.21 depends on the landlord complying with its statutory obligations. In effect the s.21 notice accelerated possession procedure (the name itself being an anomaly as it is barely quicker than the standard procedure) acts as a policeman. If the landlord is in breach of the TDS or other obligations the tenant only has to say there has been non-compliance and the court cannot make an order for possession.
In other words, s.21 actually protects the tenant's interests. Who will do this check and balance – trading standards officers, the police or perhaps they will introduce a new Tzar with the title of Controller of Residential Assured Property (to be abbreviated as appropriate) position in a new Ministry. The reality is that the interrelationship between the s.21 procedure and the other legislative provisions means that the landlord has to comply with legislation in order to obtain possession using s.21.
Second, landlords want to rent property to earn income. They do not like tenants changing or void periods as these increase costs and result in lost income. Our experience is that where there are tenants that do not pay rent they mostly use the s.21 procedure when the tenancy is periodic. There is an advantage to the landlord in that the cost is usually less.
However, there are also considerable advantages of the section 21 regime for the tenant. For those that need state help the use of the section 21 notice means that they are no deemed to be made intentionally homeless and for those that remain in the private residential sector ("PRS") they can honestly say to a prospective new landlord that their last tenancy was terminated on a no-fault basis. With the new system there will be fault attached to an eviction that may impact on the tenant's ability to find both PRS (risky tenant) and state housing (intentionally homeless). Indeed, many landlords are sympathetic to a tenant that cannot pay and tries to work with the tenant for the tenant to be able to be rehoused by the council.
In the PRS it will undoubtedly substantially increase the risk that a private landlord will not want to take on risky tenant. So a tenant who has a short term financial problem that results in a mandatory possession order is suddenly in a position whereby finding a rental property becomes even more difficult! That cannot be the intention of the government and this is another reason why the proposal to get rid of s.21 is ill conceived. It has not been thought through properly.
Will the proposed changed remove stop rogue landlords?
In the Ministerial Forward it states:
"Certainty that you (ie the tenant) will not be asked to leave without being given a fair reason and certainty you will be protected from rogue landlords who seek to abuse their position."
I very much doubt these changes will protect tenants from rogue landlords. They are operating outside the law at the moment so why would they alter their habits. The risks to them will not increase if the government's proposals are enacted.
However, local authorities have begun to crack down on rogue landlords already under existing powers. Under the current system the local authority can choose to undertake either criminal or civil prosecution. The benefit to local authorities of bringing civil proceedings is that they are permitted to keep the income from the financial penalties that they have imposed. Local authorities have now cottoned on to this and there are plenty of examples of landlords being fined five or even six figure sums. This process will do more to change landlord behaviour that the consultation proposals.
In paragraph 2.5 of the consultation document the Government states that it "wants to see an open and honest relationship between landlords and tenants with all parties clear about the reasons why a tenancy could be ended." If section 21 is removed I believe that tenants will suffer because which landlord wants to take on tenant that was evicted for non-payment of rent and as the tenant may be deemed to be intentionally homeless there is no state support. Does this change help the tenant?
Maybe the answer is have a minimum fixed term of 24 months during which a section 21 notice cannot be served but to allow service of the "family need" and "sale" notices but not within the first 6 months and faulty based notices at any time. Maybe even increase the notice period in a section 21 notice from 2 to 3 months to give the tenant more time to move. These are mere tweaks that could help but they do not address the main problem.
The main problem is the lack of houses. The real issue is that there simply are not enough houses for our population. The provision of more housing will do far more to help tenants than amending the current legislation.