Proposed changes to terminations of residential tenancies under s21 Housing Act 1988
The Government’s announcement that it intends to ban “no fault evictions” have recently been widely reported in the media and hailed as a victory for tenants. It will be the most significant overhaul of the private rented sector in a generation.
Unfortunately, what this is going to look like in practice is a lot less clear.
Most people who rent residential accommodation do so via an “Assured Shorthold Tenancy” or “AST”. ASTs are granted for an initial fixed term, but automatically continue beyond that initial fixed term unless one party takes steps to end the tenancy. At present, a Landlord can end the tenancy after the initial fixed term by serving a “Section 21 Notice” on the Tenant, giving them two months’ notice to quit.
Two months is not a long period of time to find a new place to live and to move out. Furthermore, more and more tenants have complained that Landlords have used this right unfairly, for example to end the tenancy when the tenants have complained about the state of the property. This is what has prompted the proposed change.
The Government is intending to remove the Section 21 procedure to create open ended tenancies. If the Landlord wishes to terminate the tenancy, they will need a good reason for doing so. This could be because the tenant has fallen into rent arrears or because the Landlord wants the property back for their own use. The Government has promised that it will introduce a new streamlined procedure so that Landlords with a good reason can take back possession and that it will expedite the Court process, so that Landlords can be confident that any disputes will be resolved quickly and cost effectively.
While this may sound reasonable in principle, there are currently no specific details as to how this will be achieved. The Government will shortly be opening a consultation and considering the response to that consultation. However, experience of the commercial sector, where similar rights already exist for business tenants, suggests that this is not going be straightforward. There, disputes about the right to end a tenancy can take 12-18 months to resolve and cost tens of thousands of pounds in legal costs. At the same time, the Courts (like all public services) are enormously overworked and under resourced, meaning that they suffer from very significant backlogs.
For the moment, Landlords and Tenants should keenly follow the progress of the consultation and consider the draft legislation as and when it is published. We will continue to monitor its progress and provide further updates as and when further detail becomes available.
For more information or guidance on this area, contact Thomas Freeman on 0114 252 1472 or call Thomas on email@example.com.