Section 21 repeal – what does it all mean?

The current legal framework for short leases between landlords and tenants often takes the form of an assured shorthold tenancy (AST), writes Daniel Smith of Gardner Leader.

Currently, at the expiry of the fixed term of an AST and subject to the landlord having complied with the relevant formalities then a section 21 notice can be served upon a tenant giving two months’ notice to vacate the property.

The landlord does not have to give reasons for wishing to bring the tenancy agreement to an end and so this is often referred to as ‘no fault eviction’.

It was a manifesto pledge of both the Conservative and Labour parties at the 2019 general election to abolish no fault evictions and the Government has now published a White Paper setting out their proposals, which will also see the abolition of ASTs and Assured Tenancies, replacing them with 'periodic tenancies'.

If the proposals in the White Paper go on to become law then the transition to periodic tenancies will have an impact upon both landlords and tenants.

What are no fault evictions?

The Protection from Eviction Act 1977 makes it a criminal offence to evict a tenant without an order of the court.

Section 21(1) of the Housing Act 1988 provides that the courts will make an order for possession of a property if not less than two months’ notice has been given and complying with various formalities, such as protecting the tenant’s deposit and providing the tenant with specific documents relating to the rented property.

The landlord does not need to give a reason why they want the tenant to leave and the Government believes this creates a chilling effect where tenants are afraid to make demands of their landlord for fear they will be evicted.

The courts have little discretion when granting a possession order once a landlord has served a section 21 notice and started possession proceedings, however, if the formalities required for a no fault eviction have not been complied with, then the court will not order possession.

Landlords should seek legal advice before serving a section 21 notice to ensure that in the event of possession proceedings the court will grant an order.

Whereas tenants should seek legal advice upon the validity of any section 21 notice that has been served.

In contrast ‘fault evictions’ are based on section 8 of the Housing Act where the tenant has behaved in a certain way that the landlord wishes to rely on certain grounds, such as rent arrears, a breach of the terms of the lease or where the tenant has been using the property for illegal purposes.

Some of the grounds where the section 8 process applies gives the courts discretion as to whether or not to grant a possession order, other grounds like substantial rent arrears are mandatory.

In the event that a tenant does not leave the rental property in accordance with the terms of a possession order, then court bailiffs can be instructed to evict the tenant.

How will the ban work?

The Government’s White Paper looks to increase the security of residential tenants by removing section 21 of the Housing Act 1988.

The Government believes that this will 'level the playing field' between landlord and tenant and cause an increase in standards of rental property, as they believe no fault evictions puts tenants in a position where they are too anxious to complain about poor practice to landlords for fear of retaliatory evictions.

If the Government’s White Paper is approved, this will mean no fault evictions shall come to an end and instead the landlord will only be able to regain possession of a rental property in the event of a ‘fault’ by a tenant, ie rent arrears/anti-social behaviour.

The Government’s White Paper indicates that it also intends to strengthen these grounds for eviction for tenants who cause antisocial behaviour, tenants who are constantly in rent arrears but below the threshold for mandatory evictions and where a landlord wishes to sell the rental property.

The change will not be immediate and the Government will provide six months’ notice for when new tenancies will be periodic tenancies and excluded from no fault evictions.

A further six months after that will see all ASTs become periodic tenancies and will end no fault evictions.

How can we help?

Gardner Leader assists both residential landlords and tenants in resolving disputes with their tenancies.

Section 21 of the Housing Act 1988 is still in force and landlords looking to regain possession of a property must ensure that correct notice is served and the required formalities have been complied with.

In the event that the formalities have not been complied with then it may be possible to remedy the position and either serve a new section 21 notice and start court proceedings again, or they may have to wait until there is a fault by the tenant and serve a section 8 notice instead.

While tenants are unlikely to be able to remain in a property if a landlord has served a valid section 21 notice, they should consider obtaining legal advice on the validity of any notice served, whether the tenant’s deposit has been protected, or if the property is in a state of disrepair, this may give the tenant additional claims.