Catch 21: all change for housing possession?

When the spectre of abolishing "no-fault" eviction notices for residential tenancies was raised by the government, it was inconceivable that it would ever be laid to rest. By April this year, a consultation on its inevitable repeal was launched.

And, having decided on a "generational change" in renting security, the Ministry of Housing, Communities and Local Government (MHCLG) is now consulting again on "resetting the balance of rights and responsibilities between landlords and tenants". But while we are still to see all the finer detail on what exactly a post-section 21 world will look like, it pays to be as prepared as possible.

Already a catch 21?

Campaigners have long argued that the section 21 procedure is fundamentally unfair. Essentially, this Housing Act 1988 (HA 1988) provision comes into play when a home is let on an assured shorthold tenancy (AST) (the most common form of private residential tenancy) and the fixed term has ended.

There are plenty of "fault" grounds for possession set out in Schedule 2 (see the table below) that can be called upon using section 8 and a(n often stressful) court order, but section 21 enables a landlord to regain possession of its property as of right.

For the AST tenant, this means the threat of eviction is just one small procedural step away. No explanations are necessary. Provided the notice is valid, no recourse is possible; the landlord just needs to tick the legislative box. Notice served? Tick. Removal van booked? Within two months.

Of course, in reality, the procedure has grown complex since its introduction, as a long line of legislative amendments erected hurdles to termination. Notices are prescribed and expire on a use-it-or-lose-it basis.

And there are now lengthy preconditions to service. Certifications (eg gas safety) must be provided, energy performance certificates handed over, 'how to rent' guides served, and necessary local government licensing obtained (such as that for houses in multiple occupation). Landlords must have dealt with the tenant's deposit properly and complied with the recent ban on letting fees. Retaliatory evictions, where section 21 is invoked after a tenant complains about a property's condition, have already been (rightly) restricted.

It's unsurprising then that, for all the headlines, use of section 21 is not actually widespread. The consultation itself is clearly an information gathering exercise on its use in practice. "Most tenancies," says MCHLG (referring to 2018's English Private Landlord Survey) end because "the tenant has decided to move out". It admits, however, that a section 21 notice is too often used in fault scenarios, when the tenant is in arrears or the property uncared for.

Still, well informed and responsible landlords are wary of tripping up along the road to recovery, and its days have long been numbered. No-fault section 21 evictions were banned in Scotland in 2017, and many already prefer to use section 8 when they can.

So what happens next?

MCHLG's latest consultation, published in July, will effectively mean an end to ASTs as we know them in England. Any legal distinction between an AST and an assured tenancy will dissolve with a repeal of section 21 as all future tenancies will therefore be assured, either as fixed-term or contractual periodic arrangements.

There are occasions, such as an agreed break or the end of the fixed-term, when tenants may bring a tenancy to its natural end. From a landlord's perspective, however, eviction will require (as it does now) the exercise of an agreed break or service of a section 8 notice alleging fault.

The key to this reform is section 8. In short, it is about ensuring that "wherever a section 21 notice would have been appropriate to use, an appropriate section 8 ground can be used instead". Interested parties have until 12 October to consider bolstering a number of existing "fault" grounds, particularly rent arrears, antisocial behaviour and domestic abuse. The former could see swifter timetables. The regular coalescence of domestic abuse and security of tenure issues meanwhile leads to the possibility of enabling landlords to evict perpetrators rather than whole households.

The government is also proposing three new grounds for possession. The first two, which would be mandatory (meaning the court must grant possession when the ground is proven) are where occupation is needed for the landlord's family member or where vacant possession is needed for a sale. The last is a discretionary ground based on situations where the tenant prevents compliance with legal safety standards.

There will be carve outs for special scenarios. The consultation appreciates that the new tenancy framework could be sidestepped for student accommodation or very short term lets. It suggests possessions could be claimed when property is required for religious workers or on agricultural tenancy sub-lets so that, for example, tenant farmers can deliver vacant possession on retirement.

The Build to Rent investment model, which of course depends on retaining residents rather than evicting them, generally fulfils any affordable housing target by offering "affordable private rents" to eligible tenants (such as key workers). It wants special tweaks to enable landlords to increase rents or recover property in the event that eligibility changes.

Tenants will likely welcome an extension to the minimum fixed term (up to two years from the current six months) but, fearing the impact on investment, nothing in this consultation talks to private rent controls. Currently, section 13 of the HA 1988 contains an annual mechanism to peg rent to the open market after the fixed term (regardless of affordability or personal circumstances). This won't change.

There are also moves to simplify court procedure to cut timelines for redress. We await the Government's response to a call for evidence on this, but in the meantime, MHCLG suggests an accelerated application process to determine cases without a hearing, effectively mimicking the section 21 timescale albeit with a chance for the tenant to challenge.

Conclusion

The threat of eviction is central to the life and livelihood insecurity of many AST tenants. As the Government ploughs resources into the private rented sector in a bid to solve the housing crisis, it can only be a good thing that the grounds for possession are revisited.

MHCLG rightly acknowledges that, in the balancing of tenants' and landlords' interests, a unilateral ability to evict "fuels a culture of mistrust and uncertainty". But with a simpler route to a wider list of faults, the section 21 bogeyman isn't entirely vanquished.

Schedule 2 of the Housing Act 1988 – the current grounds for possession