For more than 30 years, landlords have relied on section 21 of the Housing Act 1988 and the accelerated possession procedure to end tenancy agreements after their initial fixed period, simply because those tenancies' terms have ended.
In 2019, the Conservative Party's 2019 manifesto promised to ban such evictions, which have now become widely known as 'no-fault evictions'. There has recently been an escalating widespread and ongoing rental (and general housing) market crisis. It is therefore unsurprising that headlines across the country are highlighting the proposed new law, currently being drafted by parliament, in what is known as the Renters (Reform) Bill. Whilst that draft bill is still in its early stages; its draft form offers lawyers, landlords and tenants alike an insight into what we might expect from the proposed legal changes in this area; in what is being called a 'once in a generation shake up to the rental market'. In this article, we take a look at the draft proposals and how they affect the current legislation.
Abolition of Section 21 Notice
Currently, no-fault evictions are commenced by the initial service of a notice on a tenant, following the requirements under Section 21 of the Housing Act 1988. The draft Renters (Reform) Bill seeks to remove key parts of that Act, which essentially abolishes the use of section 21 notices to commence possession proceedings in their entirety. If this Bill is passed into law, the only notices a landlord may then serve on a tenant to seek possession of their property will be a section 8 notice – relying on one of the fifteen mandatory and/or discretionary legal grounds for an eviction being made out, for example: rent arrears (ground 8, 10 and/or 11), a breach of the tenancy agreement (ground 12) or the tenant is a nuisance to neighbours (ground 14).
There are, however, new inclusions into the Bill that assist landlords in obtaining possession, which are not currently available. Namely, that a landlord will be able to rely on their intention to sell their property as a legal ground to regain possession and a landlord who intends to move himself or a close family member (defined in the Bill), may also obtain possession on this new ground. Currently only a landlord may move back into his property if he occupied it or if he notified the tenant that he might want to occupy it in the future before the commencement of the tenancy. Overall, it appears it will become somewhat more difficult to evict a tenant whose fixed term has ended and tenancies will now continue on a rolling contractual basis. This provides more stability for tenants at the cost of the landlord's inability to remove tenants quickly on non-fault grounds.
Tenancy deposit scheme
It is also of note that the current provisions which compel a landlord to protect his tenant's rent deposit to ensure valid service of an eviction notice have remained. Currently, 'fault evictions' under section 8 do not require protection of a tenant's deposit to be valid. However, the Bill inserts a new section 215 into the Housing Act 2004, whereby the requirement to protect a deposit within 30 days of commencement of a tenancy extends to the validity of section 8 notices (where currently a section 8 notice may be validly served without any evidence that a tenant's deposit is protected). The only proposed exception to this new requirement is where a landlord would be serving notice on anti-social or nuisance grounds. In those circumstances, the requirements for a landlord to have protected a tenant's deposit can be dispensed with.
As with a section 21 notice, the 'get out clause' to this requirement to protect the deposit is that a tenant's deposit can be returned to him in full if it has not been protected. A section 8 notice will then not become invalidated as a result of the tenancy deposit not being protected. This will increase a financial risk to the landlord should there be a significant repair cost at the determination of the tenancy.
Further, entirely new to this Bill is the possible criminal penalty which can be imposed against landlords who seek to regain possession on section 8 grounds where a landlord knows that he is not entitled (or is reckless to his entitlement) to seek possession. For example, a landlord may be sanctioned where he serves an eviction notice on a tenant knowing that they are just below the rental arrears threshold for bringing a possession claim at the time proceedings are issued, assuming that they will have met that threshold (not paid any more rent due) at the time of a hearing. This may give rise to a landlord having committed an offence under the new legislation, which would incur a fine imposed by the relevant local authority of up to £5,000.
It will also be of interest to note that landlords will now be compelled to permit pets to occupy their properties with their tenant owners. The tenant's request for a pet to live in the premises with them must include a description of the pet for which consent is sought. The draft Bill includes provision that a landlord cannot unreasonably refuse a request by a tenant to house a pet in the property, on 6 weeks' notice of that request. Currently, the vast majority of tenancy agreements ban the occupation of pets in tenanted properties.
We do not know yet if this draft Bill will proceed into law or, if it does, whether parts of the current draft will be somewhat or significantly amended e.g. simply by keeping the accelerated possession procedure available for more egregious tenant defaults. However, we have been acutely aware of the government's intention to abolish no-fault evictions for some time, and this is the closest we have got to knowing what the government's intentions may in fact be for their abolition.
At the date of this article, no-fault evictions have not been abolished. Therefore, we are still entitled and able to assist landlords whose tenancy's terms have reached their end and who wish to seek possession of their premises on that basis only. However, this may change and we are closely watching as the law in this area unfolds.
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