Scrapping ‘no fault evictions’ could lead to a surge in evictions, warns lawyer

The abolishment of Section 21 eviction notices could lead to a surge in evictions by private landlords anxious to sell their portfolios before restrictions come into force, lawyers fear.

The decision to overturn Section 21 of the 1988 Housing Act, which allows landlords to evict tenants without reason and with two months’ notice, was included in the Queen’s Speech last week, which was delivered by Prince Charles.

However, without clarification on how the changes affect landlords who genuinely want tenants out so they can sell their investments, it is feared there will now be a rush to market ahead of the changes.

Michael Stock, head of property department at London law firm OGR Stock Denton, warned: “There will be many tenants evicted before legislation is passed .We will potentially see panic evictions and a surge in private landlords selling their rental properties. Consequently, we’ll see a reduction in properties in the private rental sector, the ripple effect of which will mean more stress on the rental market. It could cripple the sector. I don’t think this has been thought through at all.”

Stock is calling for more detail about how the law will affect landlords who require a tenant to vacate in order to sell a property.

“Landlords could now be held to ransom by a tenant who refuses to leave after the term of the lease is up. No buyer is going to hang around while the matter progresses through the courts. It’s all very well saying you can’t evict a no-fault tenant but there will be exceptions where a landlord wants to sell,” he said.

The abolition of Section 21 was initially proposed by Theresa May in April 2019. The Conservative manifesto pledged “private landlords will no longer be able to evict tenants from their homes at short notice and without a good reason”. Section 21 evictions are likely to be scrapped later this year.

But Mr Stock is appealing for clarity for landlords who have genuine reasons to evict and has raised his concerns with Michael Gove, Secretary of State for Levelling Up, Housing and Communities

He also predicts some tenants may use the greater protections to obstruct fair rent increases and that some landlords who want to reoccupy their properties or hand them to family could be hampered from doing so.

He said: “I can see an argument for rules that stop unscrupulous landlords coming up with a sham sale or unilaterally putting up rent unreasonably to get a tenant out, but there will also be room for mischief from tenants who can dispute fair rent increases and just staying on where there is a genuine proposed sale, knowing a landlord can’t get their tenants out.”

Even under current rules, tenants can still fight Section 21 notices through the courts, and the process can take many months to evict tenants..

Stock said: “There is a genuine fear that this is going to have a detrimental impact on landlords and their properties in several genuine scenarios, particularly small investors who have one or two properties and are hoping to sell one to release funds. I can’t see any drafting in the proposed legislation to cover such scenarios and it’s a potential “ own goal” that the government is going to score with its traditional supporters.”

 

Agents need ‘clarity’ after government commits to scrapping Section 21

 

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7 Comments

  1. Highstreetblues

    It’s already happening. Some good Landlords have just had enough of increasing costs, hassle and legislation and are now selling up. Who can blame them? Well done Shelter and Gen Rent – you’ve managed to lobby the Government successfully, but increase rents dramatically due to the lack of stock.

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  2. Jonathan Rolande

    With prices at an all time high as well as this legislation, many landlords will be right to quit the sector.

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  3. Root1

    If this is anything like the PRT’s up in Scotland there will be a number of mandatory grounds whereby a section 21 (or similar replacement) can be used. These include genuinely selling, moving back in, taking back for immediate family, large refurbishment and various others. I seem to remember there about 18 (been a while since I read the guidance of the Scottish PRT’s in 2020).

     

    The issue here, I feel, is not about landlords selling, moving back in or putting up rents. This might have some inconvenience attached but I don’t see this being the biggest problem. The real issue with the removal of section 21 will be where a tenant is a real problem but the issues they are causing will not pass the legal threshold for possession. This will result in enormous legal costs/delays to owners if they want to remove them on nuisance grounds or similar unless big changes to courts systems are implemented (which I wager will not happen) : Examples of these below:

     

    Tenant clearly using the apartment they rent to smoke drugs, deal drugs and generally making the other apartment residents lives a misery. In the past the landlord would issue sec 21 and prevent this issue escalating and becoming some kind of drug den. That now will be gone until it gets very bad/provable in a court.

    Tenant making ungodly noise and disturbance to neighbours. Drinking, partying and being abusive. Everyone in the close knows the tenant is an issue, everyone is too scared to confront this so landlord is constantly pressurised to “deal with it”. Section 21 would often be used. That ability will now be gone.

    Tenant is persistently abusive, rude and threatening about the property they are renting. Harassing the landlord at all hours of the day/night in an uncontrollable way – often we later find due to a number of mental health issues – that as landlords we are unable to screen. NO way out for landlords aside from going to court trying to remove the blight of their life OR sell..

    All of the above, and many more, are hard to prove in a court of law but meet the thresholds very easily of the real world “duck test”.

    In 25 years I could give so many reasons why this removal of section 21 will create enormous knock on problems. This is not just for landlords, this will also be a problem for the general public and the public should know that this will impact them where a PRS tenant is located nearby/next door/flat above  who goes rogue (in any number of ways) and the landlord will really struggle to deal with it for them – even more than now.

    This narrative of landlord aggressor and tenant victim has gone far to far. Yes, of course, there are terrible landlords out there BUT these guys don’t give a damn about regs/laws. They will con the system regardless of what laws are bought in. They don’t have respect for the housing regulations or laws at any level.

    These moves (sec21 6a removal) are yet more rules that will deter the good guys, restrict the sector and create more housing issues…….but hey……keeps shelter and alike in paid work. To be clear, my respect for the work shelter does for the genuinely homeless is enormous but the damage they are causing good landlords trying to offer a good home is killing the sector and massively exacerbating the problem – they take a fire, they poor on fuel and then add gunpowder – history will show the results.

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  4. KByfield04

    We seriously have to get away from this scaremongering nonsense. Landlords will not suddenly evict a broad range of tenants. Landlords’ key reasons for serving notice (re-occupancy or selling) are to be protected and S8 is to be strengthened. Everyone else is a good tenant (generally) and Landlords will keep them until the rent gets too high or they want/need to leave for other reasons.

    With nearly 250k fewer rental properties than 10 years ago, this rhetoric does nothing to stop this exodus. However, this drives up rents- deepening the housing crisis around it- however, rewarding Landlords that stay the course.

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    1. Will2

      I do not believe it is “scaremongering nonsense” but a reaction to that which landlords are facing. The onslaught of anti landlord behaviour and constant attacks has caused, understandably, a deep level of distrust.  This has been driven by Shelter and Generation Rant backed by certain poor politicians like Mrs May’s abolition of S21. The lack of trust is doing the damage and  the past is  setting the future. Landlords do not see things improving only more and more actions against them. Discrimination against them (such as the tax system). Without that confidence that there is a decent future they will leave the market, which is happening.  Good tenants previously had little to fear but Shelter and the likes tend to deal with the other end of the market protecting rogue tenants.  Councils have behaved appallingly not complying with guidance and driving up landlords costs and inciting tenants to be in contempt of court by not complying with initial possession orders. The Government have reinforced the anti landlord feelings with emotive terms like Rogue Landlords  when we have  Rogue Councils, Rogue politician who party and a so called housing charity whose name implies they provide shelter but house no one.  I personally am seeing this as a “Putin Syndrome” – they bully for what they want but reality is they make matters worse and cause more damage than they mitigate but fail to see it  or understand it!

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    2. A W

      1. It is not scaremongering, it is (justifiable) pessimism.
      2. Est. 230,000 less properties since 2017 (so 5 years)
      3. Theresa May isn’t the only poor politician, I would cite… well literally all current cabinet ministers.
      4.  Just because you don’t have to serve a s.8 does NOT make someone a “good” tenant.
      5. “Rewards landlord that stay the course“.. with what, a tenant that that you have to rent to for peppercorn/can’t ever evict without legal grounds?

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  5. AcornsRNuts

    Scrapping ‘no fault evictions’ could lead to a surge in evictions, warns lawyer.
    In other breaking news, bears poop in the woods.

    I know of two rental properties that will be sold in 2023 and 2024 when the tenants plan to leave, BUT should this legislation appear lkikely to pass, Section 21 notices will be issued immediately.

     

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