In April 2019, the government announced its intention to repeal section 21 of the Housing Act 1988 (HA 1988) in England, to remove a landlord’s ability to terminate an assured shorthold tenancy (AST) without giving a reason. At the same time, the government recognised the need to improve the grounds for possession available under section 8 of the HA 1988, to ensure that a landlord can obtain possession whenever it has a legitimate reason to do so.
On 15 April 2019, the Government announced an “end to unfair evictions” in what it described as the “biggest change to the private rental sector for a generation”.
In its response to an eight week consultation seeking views on longer tenancies, the Government announced plans to abolish section 21 HA 1988 notices. The response can be found here.
The government has now gone onto publish a further consultation (announced on 21 July 2019) seeking views on the implementation of these proposals. The consultation confirms that the government intends to repeal section 21 by removing the AST regime altogether, as section 21 is currently the only distinguishing factor between ASTs and assured tenancies.
Why the need for change?
The government’s response published in April 2019 states that the private rented sector is now the second largest housing tenure in England, housing 19% of all households (4.5 million households).
The consultation carried out by the government found that tenants renting from private landlords feel insecure due to short fixed-term tenancies and unable to plan for the future. Many live in fear that they will be evicted at short notice and the cost of repeated moves affects people’s ability to save for a deposit.
Under the current procedure, landlords are able to give their tenants two months notice that they require possession of their property, once the fixed term has come to an end. This is subject to certain requirements being fulfilled, such as an Energy Performance Certificate, Gas Safety Certificate and ‘How to Rent’ booklet given to the tenant at the beginning of the tenancy. The landlord does not need to give a reason for requiring possession of their property and the tenant does not need to be in breach of the tenancy agreement.
What are the proposals for reform?
The government has endeavoured to find a balance between giving tenants greater security, whilst ensuring that landlords are able to recover possession of the property. To that end, the response states that it will strengthen the Section 8 procedure (which involves a landlord needing a reason to evict their tenants) so that landlords can obtain possession of their property should they need to sell or move into it.
The government believes that the correct approach to provide long-term security for tenants is to reform the legislative framework to remove Section 21 to ensure that landlords always have a valid reason to regain possession of their property.
The Government has not clarified whether the new section 8 grounds will be mandatory and discretionary, which will undoubtedly be of concern to landlords. Further, obtaining possession through the current Section 8 procedure can be extremely slow. The Government has stated that court processes will be “expedited” so landlords are able to “swiftly and smoothly” regain possession of their property but gives no further information as to how this will be achieved.
So what is the recent consultation about?
The consultation seeks views on:
The impact of abolishing ASTs and whether there are any circumstances where a landlord should be able to obtain possession where the tenant is not at fault;
Whether the proposals should apply to both private sector and social landlords, to the extent that they use assured tenancies;
How the existing grounds for possession in Schedule 2 to the HA 1988 should be amended or extended;
How applications for possession orders under section 8 of the HA 1988 could be processed more efficiently.
The consultation is to be carried out in a non-retrospective fashion, with existing tenancies remaining unaffected by current proposals. The Ministry of Communities, Housing, Communities and Local Government (MLCLG) intends to work with the Ministry of Justice, concerning reforms involving court procedures.
The consultation closes on 12 October 2019.
The effects of recent changes especially the recent tenant fees ban, are not yet being fully felt and the government should not underestimate the potential impact of its tenancy reform proposals on landlords.
Don’t forget that if the tenancy was created on or after 1 October 2015, you MUST use the prescribed form 6A, the standard form to be used when serving a section 21 notice in England from 1 June 2019.
A link to the form can be found here.
For more information on this article or to discuss your property litigation concerns generally further, please contact Catherine Burgess by email email@example.com or telephone 020 7644 7283 or contact her on LinkedIn.