The abolition of section 21 and the Renters’ Reform Bill
Posted on 4th February 2020
In her speech on 19 December 2019 the Queen announced a Renters’ Reform Bill which will introduce, among other reforms, the abolition of s.21 evictions, also known as ‘no fault’ evictions. The purpose of the Bill is to introduce reforms which will “deliver a fairer and more effective rental market”. The promises made in the Bill follow a consultation by the government on the effect of s.21 procedures which concluded in October 2019.
The government’s proposals set out in the consultation paper include abolishing the framework of Assured Shorthold Tenancies (ASTs) so that all private tenancies would either be periodic or fixed term Assured Tenancies. Section 21 of the Housing Act 1988 currently provides an avenue for landlords to evict tenants who hold ASTs without proving any fault on the part of the tenant or even providing a reason for wishing to end the tenancy. The landlord must simply provide evidence that they have complied with certain procedural requirements and, provided that these are met, the court is obliged to make a possession order in favour of the landlord. This makes it relatively easy for private landlords who have complied with the relevant regulations to evict tenants and comparatively difficult for tenants to defend these proceedings, as the defences available are quite limited and very technical in their nature.
The s.21 possession procedure can be “accelerated” and can be concluded relatively quickly. The landlord must serve a ‘s.21 notice’ giving the tenant two months’ notice to vacate the property, after which they can apply to court for a possession order. The claim for possession can then be decided without a hearing, unless the tenant can demonstrate that there is an arguable defence that justifies the listing of a hearing. If a possession order is granted by the court, the landlord then needs to obtain a warrant for possession before the tenant can be lawfully evicted by bailiffs. They can normally do this 14 days after the possession order is made, although the tenant can ask for an extended timeframe of up to 42 days, if they can argue that they would suffer exceptional hardship. A possession order can therefore be obtained relatively quickly if no such defence is raised. If the landlord successfully applies to court for a possession order and warrant, the tenant will usually be ordered to pay the costs of the landlord, which can be upwards of £500.
As the tenant will normally need money to secure a deposit and initial rent for another property, many tenants cannot afford to wait for the landlord to obtain a possession order and warrant, and so need to leave within the two months’ notice period in order to avoid these expenses. The outstanding costs order can also affect their credit rating, also making it harder to rent again. Eight weeks is often insufficient time to find another property, particularly for families with children or households with a low income.
The s.21 procedure can be contrasted to the position with possession proceedings brought under the fault-based grounds of the same Act. In these cases, the landlord must prove that one of the relevant grounds for possession has been met. If the landlord is claiming possession for rent arrears, for example, the landlord must provide evidence that the tenant owes rent. If the tenant is able to show that this is not the case, then the court cannot make the possession order. If the claim is brought on one of the discretionary grounds, the court must also consider if it is ‘reasonable’ to make the possession order, in light of all the surrounding circumstances, before doing so.
The s.21 procedure therefore makes it relatively easy for landlords to evict their tenants and makes renting in the private market insecure for tenants. As the number of households renting in the private sector has increased significantly (by 63% between 2007 and 2017), and continues to do so, security in rented accommodation is an issue which affects an increasingly large number of households in the UK, including an increasing number of families with children.
It is also a concern for tenants that the s.21 procedure allows landlords to carry out ‘retaliatory evictions’, where they seek possession against tenants in response to legitimate complaints about disrepair or other potential breaches by the landlord. Since 2015 a specific defence for “retaliatory eviction” has been available to tenants raising issues of disrepair but it only applies to a very limited number of cases and requires the tenant to have reported their concerns to the local authority and for the local authority to have sent the landlord a formal notice within a specified timeframe. Therefore, this provision rarely provides a solution to this overall problem.
Eviction via the s.21 procedure has also been cited as a leading cause of homelessness in the UK by some groups campaigning for tenants’ rights, such as Generation Rent. This is, however, disputed by landlords groups who argue that many landlords use s.21 procedure in cases where the tenant is at fault as it is easier and quicker. However, the use of s.21 to evict tenants in these circumstances could be still be seen as unfair as tenants are unable to respond to the underlying reasons for eviction or to have any defence considered by a court.
Arguments has been raised to defend the existing s.21 procedure, on the basis that making it more difficult to evict tenants will discourage landlords from renting properties at all or leading to stricter credit and referencing checks against tenants, making it harder for them to secure accommodation. Conversely, the availability of the s.21 procedure means that the power balance in the private sector renting is heavily in favour of the landlord and the sector provides very little security to tenant households.
Given the current climate of austerity measures, which are likely to continue following the recent election result in December 2019, the arguments in favour of the existing scheme offer little comfort to the majority of tenant households living under the two month ticking time bomb of potential homelessness. The abolition of section 21 should therefore be welcomed by renters.
The Bill will also aim to make renting in the private market easier for tenants by introducing a ‘life time deposit’ which will move with the tenant between properties. This will mean that tenants will not need to save for a new deposit each time they move. Coupled with the abolition of s.21, this should reduce to some extent the threat of frequent and unexpected costs for renters. The Bill will also aim to “drive out rogue landlords” and ensure that all tenants have a right to redress if their properties are not safe. The focus on improving property standards follows on from the recent introduction of the Homes (Fitness for Human Habitation) Act 2018 (which will apply to all periodic tenancies from 20 March 2020).
However, it has also been confirmed that the Bill will amend current legislation to “give landlords more rights to gain possession of their property through the courts where there is a legitimate need for them to do so”. The government will work to improve the court process to make it “quicker and easier for [landlords] to get their property back sooner”. This will be achieved with reforms to the existing fault grounds for possession and to the procedure for obtaining possession. The government’s consultation paper proposes that the grounds for possession will be reformed to cover instances when a landlord wishes to allow a family member to use the property or to sell the property.
Further proposals include widening the scope of mandatory grounds for rent arrears and including a mandatory ground for tenants who are persistently late with rent. This will be coupled with changes to the procedure for repossession including a possible reduction in the earliest time a hearing can be listed following a possession claim being issued. Therefore, there still seems to be scope for the landlord to obtain possession quickly in certain circumstances.
The government has not yet responded to the consultation, and so the precise nature of the changes is yet to be confirmed. No date for the second reading of the Bill has been set as yet, and so it is not clear when these changes would come into effect.
Given the Government’s current focus on Brexit, it appears unlikely that these proposals are likely to be a priority for the foreseeable future.