Onus on Government to avoid chaos in the courts if Section 21 removed - NLA

Article Posted -
15 Apr 2019

The National Landlords Association (NLA) is lambasting the Government’s proposal to remove Section 21 ‘no fault’ evictions, essentially creating indefinite tenancies. 

Section 21 was originally designed to allow landlords to regain possession of their property to sell it or to move into the property themselves. The NLA has long argued that it has become a backstop to overcome the ineffective  Section 8 process, where a landlord has to go to court to regain possession when a tenant is in breach of their tenancy agreement, because it is seen as slow, costly and inefficient. 

Research conducted by YouGov* on behalf of the NLA in December 2018 showed that of the 11 percent of landlords surveyed who had sought possession over the last five years where the tenant was in breach of their agreement, 44 percent used only the Section 21 process to regain possession, while a further 22 percent used both Section 21 and Section 8.                                                  

According to the Government’s own figures**, 90 percent of tenancies are ended by the tenant.  Of the tenancies ended by the landlord, the majority are ended because of rent arrears. 

Richard Lambert, CEO of the NLA, says: 

“Landlords currently have little choice but to use Section 21. They have no confidence in the ability or the capacity of the courts to deal with possession claims quickly and surely, regardless of the strength of the landlord’s case. 

England’s model of tenancy was always intended to operate in a sector where Section 21 exists. This change makes the fixed term meaningless, and so creates a new system of indefinite tenancies by the back door.   

The onus is on the Government to get this right. It’s entirely dependent on the Government’s ability to re-balance the system through Section 8 and court process so that it works for landlords and tenants alike.  The Government should look to Scotland, where they reformed the court system before thinking about changing how tenancies work.   If the Government introduces yet another piece of badly thought-out legislation, we guarantee there will be chaos.” 

ENDS 

* All figures, unless otherwise stated, are from YouGov Plc.  Total sample size was 3,088 Landlords in England and Wales. Fieldwork was undertaken between 21st - 27th December 2018.  The survey was carried out online. 

** English Housing Survey, Private Rented Sector 2016/17 

For more information, please contact: 

press@landlords.org.uk 

020 7920 7904 

075 0803 1084 

Comments

Submitted by 6493 on 26 April 2019 - 8:56am

Abolishing S.21 is a major trip hazard that will allow students to continue their AST agreement(s) on a statutory periodic basis if they so chose. In the meantime, the next set of students that signed up to legally occupy the property can no longer do so. I believe the landlord is still responsible to honour the newer AST agreement and must find suitable accommodation for these displaced students. It is a situation that puts the potential incoming students, letting agents and the landlord in deep trouble. The Universities themselves could also get dragged in.

Scrapping the S.21 "no fault" eviction will force landlords to use S.8 instead where, currently, "blame" is attached to the potential evictee. Many councils automatically regard such evictees as having made themselves 'intentionally homeless' absolving council of any responsibility to re-house the evictee.
The use of S.21 evictions allows marginal tenants or tenants whose circumstances have changed (e.g. mental status, infirmity, new infants, departing children, spousal changes, etc.) which are not longer a correct match to the property they occupy to be evicted on a "no fault" basis. Such evictees are then able to qualify, if appropriate, to enter into a local re-housing programme.

It is clear that S.8 needs to be strengthened and the hearing process speeded up. I suggest that if claims were handled by a dedicated housing court or tribunal service in the first instance where claims are only referred up to the county court if it felt it could not make a safe decision or if there were criminal issues (such as theft, fraud, damage, threats, etc.).

If it is possible to evict a tenant using S.8 for 'un-tenant like behaviour', it should be possible to include a reasonable amplification to the currently vague meaning of 'un-tenant like behaviour' in the AST agreement which the court/tribunal would need to take notice of. Examples could include refusing permission to enter the property to inspect for gas safety, electrical safety, damp, legionnaires, fire alarm certification, emergency lighting certification, essential maintenance, failure to communicate, condition of the property including cleanliness, damage and so on.

Email exchanges between the landlord and the tenant can be important in a hearing. If such exchanges have been copied to a virtual notary at the time of writing, the court has confidence that the exchanges are genuine.
The notary service could be administered by the local council or by the housing court or tribunal service.

The RLA is conducting a comprehensive survey that is open to all. All interested parties should work together on this matter.

Submitted by 306 on 25 April 2019 - 1:13pm

In my experience as a landlord of many years, I have never evicted a 'responsible tenant' as
Theresa May was quoted recently. . Why would I, when
rent was paid promptly and no undue damage caused to the property.
I have only needed to resort to Section 8 or 26 Notices on the rate occasions when rent arrears have become
substantial. On one occasion the tenant was in the region of £7,000 in arrears when I
finally managed to have him evicted after about nine months of trying to do so via the Court.
On the day he finally left he caused an explosion which wrecked the flat. He was arrested but claimed
it was an accident and the matter was dismissed by the Police leaving me with the bill for repairing
the damage, I did finally manage to recoup the £7,000 though by applying for an attach of earnings
order which took over a year and I was awarded £100 per month by the Court (circa 5 years to get
back the sum owed!
Is the Government trying to destroy the private rental sector in this country entirely. I am a responsible landlord
but the constant changes and burden caused by all the recent legislation is wearing me down and I fear
I cannot continue for much longer being treated as the villain and the tenants' enemy and may well need
to shut up shop and sell my property.

Submitted by 129157 on 19 April 2019 - 7:14am

We are landlords operating as a limited company as well as privately and have a reasonably sized property portfolio and consider ourselves to be very good landlords. We attempt to comply fully to the legal obligations placed on landlords by the government but it is not made easy whatsoever, with the emphasis purely geared for the benefit and in favour of the tenant and tenants seem to be taking advantage and exploiting the system. The system clearly doesn't work as it is and this will just be another move in the favour of the tenant.
However, tenants will always be tenants, some good and some bad, likewise with Landlords, however and in our opinion should be treated as tenants without any emotional attachment whatsoever, as long as each party complies to their end of the arrangement there will be no issues, but is seldom the case, especially at the end of a tenancy when the deposit is attempted to be used final rent payment and the property not returned back in a reasonable condition and having to determine what is fair wear 'n tear. We believe the whole system needs to be reviewed and simplified to make it fairer for each party.
We have recently visited court and evicted a bad tenant via Section 8 notice as unable to issue Section 21 due to tenancy agreement having several months still remaining and needed to acquire the rent arrears which is not possibly via Section 21 as you would only gain possession of your property. The whole process has taken nearly 5 months to complete, with solicitors not being proactive and submitting court documents promptly and having to chase ourselves. Having attended the court hearing, lost the whole day in the process and obtained a 14 day possession and payment of rent arrears and legal costs order didn't mean it was the end. The tenants having not cooperated or communicated whatsoever generally and particularly during this process, simply didn't move out on the day, then having to make bailiff application to court. Finally removed them, and faced with a shocking state of a newly built home totally ruined and disrespected throughout, and full of rubbish internally and externally and likely to cost thousands and thousands of pounds to reinstate, not to mention the arrears and legal costs and now having to justify why we wish to retain the tenants deposit, insignificant against the cost of repairs and only for the tenant to then dispute prolonging the matter further. The tenant has now moved on and not interested in discussing anything further, are therefore we are now in the process of applying for High Court enforcement to recover the monies.

Submitted by 003152 on 17 April 2019 - 7:51pm

Conflict between tenants in HMOs comes with the territory - rows over cleaning, bill sharing, guests, noise, general rudeness etc etc. Generally when there is trouble in an HMO it is one particularly tenant that is causing the problem. In this situation, as the Landlord, I use Section 21 to get rid of that tenant and to keep all the others happy. If I can no longer do this then I risk having one tenant disrupting the lives of other tenants for ever more. It could even be so bad as to mean no other tenants would be happy to live in the same house - meaning that one bad tenant will have a whole house for the price of a room for ever.

I really want to know how this is panning out in Scotland at the moment as they have been in this situation for a couple of years. Are there any functioning HMOs left there?

Submitted by 000723 on 17 April 2019 - 5:43pm

I am very concerned by this. Have been renting out property for over 30 years, all tenants been in properties for as long as they have wanted (two over 25years, 1 currently 18years) others have come and gone as suited them with the exception of one who had problems with (father served notice as guarantor plus other issues), which resulted in first time ever requesting tenant to vacate with section 21 (they moved out at end of notice without having to go to court)..
We only have a handful of properties, one being an old grade 11 listed property (has epc 'c' so not bad for age) but this property we want to retire to ourselves one day (always made tenants aware of this), the others hopefully rental income will be our pension.so want good tenants to stay as long as possible.

With the section 21 in place we have always felt safe that we can if necessary sell/move into ourselves. Also if tenants are not keeping properties in clean/tidy state/overcrowding/over petting/not paying rent we have been safe in the knowledge that we could if necessary issue section 21 requesting them to leave.

I thought the government wanted to encourage people to rent out their properties. It seems to me they are now more interested in helping builders/the big boys with build to rent etc and pushing the small landlord out many of whom have more time/interest in their properties than the big corporates, and also probably charge less rent.
I really hope they rethink this, the majority of landlords want tenants in their properties as long as possible (empty periods cost landlords money as well as often full redecoration). The only tenants we dont want in our properties are those who do not keep to their side of the tenancy. We will certainly have to seriously rethink if we are going to carry on renting out the properties.

Submitted by 072137 on 17 April 2019 - 4:56pm

This will be a nightmare for landlords who try to operate good quality HMOs . There is always the odd bad tenant who slips through the net. If they aren’t in arrears but choose to be inconsiderate to other tenants, be menacing or dirty around the premises. This would mean you would lose all your good tenants trying to get them out on a non mandatory section ground! What is wrong with the government will they not be happy till they have bankrupted all landlords. Essentially it will in the long term mean that the sub culture of tenants who claim benefits and feel they are entitled or have mental health life style issues will not be able to secure accommodation as no landlord will be willing to take that risk. What will the councils do then it will cost them an absolute fortune on temporary accommodation in B&Bs ...the mind boggles !

Submitted by 159523 on 16 April 2019 - 9:07pm

I have been landlord for 12 years, and only yesterday walked away from court under section 8 with a 14 day possession order, the first I have fortunately (unfortunately) had to go through in those 12 years. I do consider myself a "good" landlord, however feel fairly well shafted by the system that has let this "bad" tenant stay in my property since Nov without paying any rent! It has taken this long to go through the process, and its still not over yet. If this was a system being designed without prejudice, then I am sure it could be simpler, fairer, and a damn site quicker! Although the court ordered possession and repayment of arrears, I am unlikely to see hardly any of the rent arrears, court costs, and will be expected to pick up the bill for the rubbish clearance that is already evident from the outside, while the tenant will eventually move on (with the help of a bailiff) onto somewhere else provided by the local council. The only wound to carry with her will be a CCJ for costs I doubt will ever be repaid. She is already nearly 6 months better off for the housing benefit she has taken that has not gone towards her accommodation, plus the top up she is not paying. How does a civilized (or supposedly) system ever think this one works? We all know it doesn't, the new ruling will only make things much worse!

Submitted by 4051 on 16 April 2019 - 10:41am

I have been a landlord for 25+ years and thankfully have had very few problems. When problems do arise as another commentator said the law errs towards the tenant. It fails to understand most landlords are small scale and the property is either an investment or in many cases a pension.

I agree that tenants should have more security with longer lets and just pushing up the rent to get rid of tenants is unacceptable. These additional rights should be afforded to all tenants, after all long term tenants respecting the property and paying the rent is what we want. I have no problem either with longer tenancies or longer periods of notice for good tenants.

However we all know if you try and get rid of a bad non paying tenant the rent payments will invariably stop until they are gone. Add to this the chances of recovery are at best limited.

Good tenants should be rewarded with long tenancies and long periods of notice. Tenants who do not pay the rent or damage the property should forfeit these rights and a fast track eviction process should be brought in. A level playing field for all and equal treatment under the law, it is not a great deal to ask of the legislature.

Submitted by 000803 on 16 April 2019 - 7:14am

We used Section 21 because we were no longer able to support a high need tenant and had decided it was time to sell our property.
We helped the tenant find new accommodation; we helped them with their new deposit and we helped them move.
In another property we had a tenant who was deliberately not paying rent - kept telling us he was moving out but continued to stay on in the house.
He had 10 months rent arrears but was within the tenancy period.
In the end we served him with a Section 8 notice but according to insights/experiences on the Landlord website - even serving the section 8 notice he could have stayed in the house another few months without paying rent - he may or may not have turned up in court and we'd end up paying the court fees.
The chances of us even recovering the rent were also very slim.
He moved out - we returned his tenancy deposit but didn't pursue the rent arrears.
If Council tenants get in to rent arrears - the council can evict them without going to court
I think there needs to be a process where a "good" landlord can evict a "bad" tenant without having to go to court.
If a tenant trashes the property; is more than 4 months in arrears; refuses to communicate with the landlord; is abusive/threatening then such a process can cover that.
The advice we were given on the Landlord repossession course is make sure as a landlord - that you can demonstrate that you're "good"
Keep copies of letters/texts issued/received; keep receipts of work undertaken on the property; pictures of how the property looked
If landlords decide they've had enough - how is that going to help the increasing number of people who want to rent

Submitted by 128696 on 16 April 2019 - 5:59am

I live overseas, and own 3 UK rental properties which are rented to a single tenant, an elderly couple and a family of 6. They have happily lived in these well-maintained properties for between 2-5 years and have had no rental increases in this time.

With all the recent and proposed changes I am seriously considering ending the tenancies and keeping the properties empty until such time as my family and I decide to return permanently to the UK.

The result is that the tenants will be prematurely forced out of a happy home and likely have to pay higher rents for an equivalent property. I will face some financial loss but hope this will be offset by future capital gains, and the government won't get any tax from the lost rental income.

What a great idea!

Submitted by 7407 on 15 April 2019 - 9:02pm

Oh dear, I already withdrew from ever letting to housing benefit tenants. Most of my portfolio is to the student market where there is an almost guaranteed turnover of tenancies so never having to rely on section 21. The part that isn't might have to be reconsidered now and given over to student housing as well or maybe even withdrawn from the market. I certainly would not rent to families anymore as without section21 I would not be prepared to resort to being an unpleasant landlord if I ever needed the house back.

And a strange thing , the stick behind most of the recent legislation has been " you loose the right to section 21 if you don't comply with this or that. So removing section 21 will not only remove housing availability as landlords pull out or restrict but it will weaken lots of recent legislation as well. I don't think this government can see beyond the end of its nose.

Submitted by 074077 on 15 April 2019 - 7:47pm

I have had the same Tenants for ten years this year on the same monthly rent - they shall be my first and last after this announcement - I am now seriously concerned, as the property (in the same street) was purchased with my disabled daughter in mind (which the Tenants knew from the outset) and it now feels the property is about to be confiscated (together with our rights) and as such I am going to have to make a rushed decision to serve a Section 21 to sell a.s.a.p., as I cannot risk not being able to get the property back to help my daughter, as and when the time comes to start making her independent living arrangements.

Submitted by 150382 on 15 April 2019 - 5:36pm

Let's all be realistic - S21's departure was inevitable. The political climate is blowing against PRS, and S21 is not easy to defend. it IS open to abuse, even if it has good uses. The issue for NLA is: as S21 goes, can S8 be made easier/smoother. I have used S21 once because S8 would have been so difficult.
Also, will the departure of S21 really mean open contracts? Please advise.
AND: be prepared - there could be worse to come. 3 year min contracts? Rent controls??

Submitted by 41522 on 15 April 2019 - 5:12pm

Average length of tenancy over 3 years. only twice have we used section 21 - once for breach of contract but easier to use section 21 and once at end of fixed period where tenant was a horder (and we worked with local authority to get them the help they needed to move on) All other tenancies have been ended by the tenant and not us......how would we get a non-payer out? We cant increase deposit (new rules about that) we cant get housing benefit paid directly to us......nowhere left to go - we will have to take our money out. BAD PLANNING by all concerned - if there are BAD landlords then use the existing laws to deal with them!!!

Submitted by 153772 on 15 April 2019 - 3:50pm

I am a landlord in Wales, so this ruling doesn't apply to me - YET! However, I don't think it will be long before Wales gets the same ruling. I do think to even up the 'playing field' the Government need to look at when a landlord does need to evict a tenant that the process isn't as long winded as it currently is. It can take up to 12 months to evict a tenant and the cost to the landlord for that is unrecoverable - loss of rent, cost of cleaning up and putting the property back into a habitable, rentable condition. Court and bailiff costs. Alongside the Government getting rid of Section 21, they also need to make the process of evicting a tenant a lot quicker and less costly.

Submitted by 007705 on 15 April 2019 - 3:33pm

"The onus is on the government to get this right". I have watched how they have dealt with Brexit. There is absolutely no chance this will work for good landlords.

It may well be time to leave the PRS.

Submitted by 145845 on 15 April 2019 - 3:21pm

I consider myself a good landlord. the property is maintained, the same tenant has been in the property for 3 years, I have not put rent up once during this time.

If the government force this through, then I will definitely be selling up and putting my hard earned cash elsewhere.

Submitted by 065987 on 15 April 2019 - 2:11pm

What can landlords, who wish to sell their property, do to enable them to sell with "vacant possession"???

Submitted by 072582 on 15 April 2019 - 12:10pm

With regards to this crazy situation could a landlord set up a contract with the tenant where as it would not be an STA but a legally binding contract with similar conditions with the tenant having to apply for for a renewal every year. Not an expert but just a thought. The contract could still have a non payment clause which would make the tenant legally obliged to make the due payment or if they default give the landlord the legal right to evict the tenant. Any advice would be greatly received.

Submitted by 058302 on 15 April 2019 - 11:49am

Letting agents will cease to exist, except for the larger agents dealing with corporate clients. Landlords will be reluctant to rent properties, in case they cannot get a bad tenant out, as they can with the current Section 21 notice. Thereby, causing the opposite effect that the Government want. i.e. more affordable rental premises. What a mess this new legislation will cause. I sincerely this new law does not come into effect.

Submitted by 058365 on 15 April 2019 - 10:55am

Another Stupid move by the Government!!
No help for Landlords or Letting Agents, its all for the Tenants.
Bad Tenants already know how to abuse the system and this will make it impossible for Landlords to regain their properties. The Courts already veer towards the Tenants so I fear Landlords/Letting Agents will decide to close their portfolios resulting in less rented properties available.
Another nail in the coffin following the ruling "NO ADMIN FEES". How are Letting Agents supposed to make a living??????????

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