All Things Section 21
It is more than likely that Section 21 notices will be abolished. In light of this it will cause high numbers of landlords selling up and leaving the market over the next couple of years.
A sector trade body believes that scrapping Section 21 evictions will have a major impact on numbers of rental housing stock with shrinkage as much as 20%, which is the equivalent of 960,000 homes being pulled out of the sector.
However whilst Section 21 still has breath left, a paralegal expert of a law firm’s property disputes team, has shared some answers and advice for landlords on how best manage the present eviction process.
What exactly is a section 21?
Paula Haverkamp:”A section 21 notice/form 6A is a no-fault notice that enables landlords to evict tenants who have entered into an assured shorthold tenancy (AST) agreement without a reason. Before issuing a section 21 notice, a landlord must ensure they have complied with the requirements as defined in the Deregulation Act 2015.”
When is it best to issue a section 21 notice?
“If a tenant does not vacate the property at the end of the fixed-term, the only way a landlord can evict a tenant lawfully is to serve a section 21 notice upon them.
“This also applies if the tenant remains in occupation at the end of the fixed-term and the AST becomes a statutory periodic tenancy (SPT). This means the tenancy runs on exactly the same terms as defined in the expired AST on a month by month basis.
“The section 21 notice can be served during the fixed-term but only once the tenant has been in occupation of the property for four months. However, as section 21 notices now have a shelf life of six months from the date the notice is signed, a landlord will need to pay particular attention to the date they serve the notice – especially if the AST is for a fixed-term of 12 months.
“If a tenant is not in breach of their AST or SPT, the only way a landlord can evict them lawfully is to serve a section 21 notice upon them.”
How long does a section 21 process take?
“The section 21 notice is a two-month notice. If the tenant does not vacate in accordance with the notice, the only way a landlord can obtain vacant possession of their property lawfully is to obtain an order for possession through the court. This process usually takes approximately two to three months to obtain, depending on how busy the court is.”
What changes are the government planning to make?
“The government is proposing to remove the AST from the Housing Act 1988 meaning that these types of tenancies would only be available to private landlords. We may also see the government introduce fixed-term assured tenancies, which would commit the tenant and landlord to a specific time period. This would mean a fixed-term tenancy could be renewed or become an assured periodic tenancy if not ended by tenant or landlord.”
What happens if the law changes?
“The proposed changes to legislation are currently being consulted on and will then need to be progressed through parliament before they come into play. However, it is unlikely any changes will take place before late 2020.
“Regarding ASTs, the government has also confirmed the changes will not affect any pre-existing tenancy agreements. The landlord will still need to go through a section 21 process when the tenancy ends.”
Richard Merrick of PIMS, said: ” The scrapping of section 21 notices is virtually a given and because of the small minority ‘rogues’, the majority of landlords will be badly affected; there will be no real feeling of security of being able to repossess a property from a rogue tenant, after all it takes long enough as it is.
“As with the introduction of the tenant fees ban which has ended up costing tenants more with the surge of rent increases, with the banning of section 21 notices there is the real danger of landlords selling up, consequently supply and demand will naturally dictate higher rents.
“Very few politicians seem not to understand, or blatantly ignore, the ‘workings’ of market economies.”