Section 21 No Fault Notices and Evictions to be Banned

Section 21, so called “no-fault notices” and evictions could be banned under Conservative plans for the private rented sector says David Lawrenson of www.LettingFocus.com. But I think landlords have nothing to fear, providing fair rights of repossession and faster court  processes are put in place at the same time for returning occupiers, for those wishing to sell, for the purposes of carrying out refurbishments and for antisocial behaviour by tenants.

My slight worry is that the long term losers could be the more vulnerable and slightly risky tenants who could find they are increasingly shut out of private renting, unless recovery processes are really faster and more certain for cases where there has been antisocial behaviour by tenants . If not, this could add up to being a “posh tenants’ charter”.

Section 21 No Fault Notices and Evictions to be Banned

The Conservatives are starting a consultation in the summer, looking at getting rid of Section 21 (so called “no fault evictions”), thus aping a Labour policy and copying what they already have been doing for two years in Scotland. 

Suddenly, the Tories are the private rented sector tenants’ friends, just in time for their votes at the next general election (natch!), which gets closer every day with every wrong turn on Brexit.

The issues driving this are twofold. First, tenants groups say tenants would like longer tenancies. However, evidence for this is sparse. The average tenant stays for four years, with 90% of tenancies being ended by the tenant rather than the landlord.

Second, some tenants say they have been victims of “retaliatory evictions”, where a valid tenant complaint is met by the landlord giving notice to leave. These do happen (by the minority of idiots in the landlord community), though maybe it is not as common as Shelter suggest. (See data at the end of this post).

Section 21 No Fault Notices – Possible Exemptions

As well as discussing the possibility of speeding up the repossession processes via some sort of special housing court, the  consultation will look at exemptions for returning intending occupiers, for landlords to do refurbishments and for those wishing to sell. So I got to wondering who would police such “get out clauses”. Mmm.

Not the local authorities – they have more laws to use against landlords than you can shake a stick at, but usually don’t use them due to lack of resource. Even those town halls who have big dollops of cash coming in from selective licensing schemes don’t do much with it, (with the honourable exception of Newham). Mostly, they seem to just use the licensing cash to employ a bunch of people to collect the  monies coming in from all the good landlords and to administrate the schemes.  Meanwhile, the bad landlords hide in the shadows, safe in the knowledge that their tenants may have their own reasons for not grassing them up). (Think illegal immigrants / folks who lack confidence / the mentally ill… the list of  “trembling tenant” types is very long!)

So what will landlords response to all this be? Well, some will see the taking away of Section 21 (no fault notices) as the final straw – and another reason to get out of the sector.  “Hooray”, say Generation Rent, “We can then buy the properties that the landlords sell – and the flood of stock will mean they will be cheaper too”. But that pre-supposes an equal number of tenants would want to stay in one place (owning a home is not as flexible as renting) and even if they did, that they can also get a mortgage to help them buy. (“Help to Buy” or “Help to Make Persimmon Execs Rich” as I call it, won’t be there forever – and certainly not under the Corbynistas).

Section 21 No Fault Notices – the Case of the “Risky Tenant”

But one thing is possible –  the more “risky” tenant may become less attractive to the average landlord.

What do I mean by risky? I’m going to introduce an example, which is actually not that unusual, but it illustrates the point well. Imagine you are a private landlord. You don’t have a portfolio of properties, maybe you have just one or two, even three say. But you are not doing this full time. You are like the majority of landlords in the UK.

Now imagine you have a choice of letting to two tenant types – and Section 21 has been abolished. One applicant is an aspiring graduate couple whilst the other is a couple who have come from a council recovery programme from the Hostel “Drug-New Life Restart” programme.

Of course, you’d like to help the couple on the recovery programme.  If there still was a Section 21 No fault Notice option, you could always say, “Well, I gave it a try, but the annoyed neighbours ringing me up every night was just too much, so I gave them notice in the end”.

But with no Section 21 No Fault Notice option available, would you be as likely to take the risk? The tenants could be there for a long time, unless they are dumb enough to do something like not pay the rent for two months or run a cannabis farm at the property – and get caught.

Could You Recover Possession in Event of Antisocial Behaviour – My Experience

So, a faster ability to repossess in the  event of antisocial behaviour would therefore be a  good idea to have included in with any new measures in a post-Section 21 world. But would it work?

This is where I’m not sure. Some years ago my own dear tenants were plagued by a thoughtless neighbour next door (an owner occupier, by the way), who thought it was ok to go off to work and leave her dogs in the house getting bored. The poor animals barked all day.

It took Dover council two years of collecting evidence to get her to court. She paid a £950 fine. The dogs were quiet for a week, but then it started all over. Dover told me we would need to start collecting evidence from scratch again. My lovely tenants had, by then, had enough and gave me notice to leave.  I lost a lovely tenant couple, who had endured two years of torment and were failed by the system, which sets the bar far to high as to what counts for antisocial behaviour.

So, as you can see, I don’t have much faith in antisocial behaviour remedies being quick or efficent.

Section 21 No Fault Notices and Evictions – Joe Halewood View

Joe Halewood, who could no way be described as a private landlord lover, but is someone who does understand the private rented sector and housing generally, has written a great piece on this. If he can see that one of the key flaws in removing Section 21 is this, then why not the zealots at Shelter and Generation Rent?

He wrote at his blog at wordpressSpeyjoe2, as follows:

This doesn’t just affect general needs rented tenants but everyone who is in a homeless hostel or in a domestic violence refuge as the exit from these is mostly to the private rented sector. If hostels and refuges can’t move people on then they can’t move people into homeless hostels or domestic violence and abuse refuges! Yet today we see Polly Neate the chief executive of Shelter and previously chief executive of Women’s Aid lauding the proposed removal of the no fault eviction on mainstream TV, radio and across social media when the policy will see more homeless on the streets and more women having to suffer domestic violence and abuse because there is nowhere they can flee to that is available! Today we also see the rump of the social rented sector lauding this proposal too as good news. Let’s hope every housing association stops using ‘starter tenancies’ with immediate effect as these too can be ended by a no-fault eviction as they are the same AST tenure as used across the private rented sector and last year official figures show 83% of new housing association tenancies were these no-fault eviction starter tenancies.

Joe Halewood

 

OUR VIEW: I don’t think the idea of getting rid of Section 21 is a problem, if it  follows the same line as was already taken in Scotland, where they got rid of the equivalent to Section 21 two years ago. Here, they strengthened the court processes at the same time  – giving landlords a faster route to getting their homes back if they wanted to sell, refurbish or move back in.

Interestingly, some tenant groups in Scotland now say that the law is still too much on the side of landlords. They also say it can be hard to prove that a landlord has really sold or moved back in.

But if we are to scrap Section 21, landlords really need faster ways to recover properties in the event of antisocial behaviour too. And proving such behaviour exists must be fast and simple.

Section 21 No Fault Notices and Evictions Ban – The Background Data

Government data shows that on average tenants live in their rental properties for over four years and that in 90 per cent of cases tenancies are ended by the tenant rather than the landlord.

Their data also shows that it takes a ludicrous five months from a private landlord applying to the courts for a property to be repossessed to it actually happening.  Five months lost rent and court and other costs. It’s madness!

Research by Manchester Metropolitan University for the Residential Landlords Association (RLA) has found that in a large majority of cases where tenants are asked to leave their properties under Section 21 notices, there is a clear reason. Half of the notices (under Section 21 ) are used where tenants have rent arrears, are committing anti-social behaviour or damage to the property. Other common reasons include the landlord needing to take back possession of a property for sale or refurbishment. The report’s authors argue that this “raises questions” about whether the use of Section 21 notices can properly be described as ‘no fault’ evictions, as some have called them.  (We would add that where a tenant is in arrears with rent, landlords will generally use Section 21 route rather than Section 8 because the former is about a month faster – meaning they will get their property back in 4 to 5 months rather than 5 to 6 months.  Unlike Section 8,  Section 21 does not allow for a claim for unpaid rent – but most landlords know that getting unpaid rent back is always nigh on impossible anyway).

Sources:

In Q4 2018 the mean average time it took for a private landlord to make a claim to the courts for a property to be repossessed as it actually happening was 22.8 weeks. See table 6a at: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/778386/Mortgage_and_Landlord_Possession_Statistics_Oct-Dec_18_Annex.pdf. 

Manchester Metropolitan University’s report, Homelessness and the Private Rented Sector, can be accessed at: https://research.rla.org.uk/wp-content/uploads/MMU-Homelessness-and-the-private-rented-sector.pdf. Page 28 notes: “our research raises questions around whether S.21 terminations can be described as ‘no fault’ evictions.” 

The English Housing Survey Headline Report for 2017-18 can be accessed at: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/774820/2017-18_EHS_Headline_Report.pdf. Page 18 notes that in 2017/18, private sector tenants had been living in their current properties for 4.1 years.

The English Housing Survey 2016-017 report for the private rented sector found that 10.1% of tenants left a private rented property over the previous three years because their landlord asked them to leave/gave notice. See annex able 3.3 at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/723885/Private_Rented_Sector_Chapter_3_Figures_and_Annex_tables.xlsx

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