There has been quite a bit of scaremongering in some media coverage on the Government’s plans to remove Section 21 notices, as part of the wider Renters Reform Bill currently being debated. Phrases such as ‘abolishing section 21’ uses pretty emotive language and I can understand why it is causing concern with private landlords.
My advice is not to panic though as I really don’t think that removing these notices will have the impact that some media stories might want you to believe.
The Government white paper – A Fairer Private Rented Sector – outlined the plan to replace section 21, so called ‘no fault eviction notices’ with what they refer to as a modern tenancy system. The paper proposes simplifying tenancy structures by transitioning all tenancies to periodic – meaning that the tenancy will end only if the tenant chooses to leave, or if the landlord has a valid reason, as defined by law.
In normal circumstances, when extended notice periods are not in place, landlords can serve their tenants under section 21 by providing them with two months’ notice once their fixed-term contract has come to an end. Landlords aren’t required to provide their tenants with a reason, hence the term ‘no-fault eviction’.
In contrast, to serve a section 8 notice, the landlord needs to prove that the tenant has broken the terms of the tenancy agreement. Section 8 notices will remain in place.
The proposed new single system for all private rented tenancies of agreements moving to periodic will mean that there is no set end date on a tenancy. All Assured and Assured Shorthold Tenancies will convert to these periodic tenancies, and the tenant will be able to give two months’ notice at any time to leave the property, while landlords must provide a valid reason to ask their tenants to leave. In some instances, such as the landlord wishing to move into the property or to sell it, landlords will not be able to evict a tenant within the first six months of the contract start date.
So with the removal of section 21, landlords will always need to provide their tenants with a reason for ending a tenancy, for example, breach of contract or wanting to sell the property. Tenants will be able to choose to end the tenancy at any time, as long as they provide two months’ notice to the landlord.
The reason I say not to panic is that in my experience, most landlords serve a section 21 when they are looking to sell and this will remain to be a valid reason for giving notice. Breach of contract or anti-social behaviour will also still be covered.
The removal of section 21 will protect tenants against more unscrupulous landlord practices, but all responsible landlords can continue pretty much as they do today.
If you would like any advice on this or anything else on the local property market, please do not hesitate to contact me.
Robert Ulph
Managing Director / ARLA Propertymark Advisory Board
Pennington
Tel: 01394 337590
