Abolition of Section 21 notices...and assured shorthold tenancies!

Following the announcement in April 2019 that the Government was going to consult on abolishing the use of Section 21 notices, the promised consultation has now been issued. The consultation is extremely far-reaching and proposes the abolition of assured shorthold tenancies entirely.

The consultation “A New Deal for Renting: resetting the balance of rights and responsibilities between landlords and tenants” (click here) was issued on Friday 19 July 2019. It is open for 12 weeks and closes on 12 October 2019.

As 19% of households currently live in the private rented sector, improving their security and rights is a high priority for the Government. However, these proposed amendments are wide-reaching for all landlords.

In summary, the consultation proposes the following:

• The removal of the assured shorthold tenancy regime in its entirety from the Housing Act 1988. The consultation recognises that this will impact:
  • all private rented sector tenancies
  • fixed-term assured shorthold tenancies used by many registered providers (RPs)
  • all starter tenancies issued by RPs
  • demoted assured tenancies (which then become assured shortholds)
    
    
• Greater use of fixed-term assured tenancies (see 2.16). It asks whether there should be a minimum length for a fixed-term assured tenancy and seeks views on the use of break clauses (see 2.20 to 2.22).
  
  
• Rents – to prevent landlords from increasing the rent shortly before a fixed term ends, “we intend to legislate to prevent tenancy agreements containing any clause which would change the contract after the fixed term has ended”. (see 2.27)
  
  
•  It will apply the Gas safety Certificate, EPC and How to Rent booklet measures to all landlords equally, for example the How to Rent booklet is not currently required to be issued by RPs. It proposes to introduce these into the assured tenancy regime (see 2.33 to 2.34).
  
  

Recognising that these measures add considerable protection and security to tenants, the Government is anxious to avoid a reduction of supply in the private rented sector. The paper acknowledges the responses to previous consultations in which landlords complained of delays in using the court process when a Section 8 NSP is used (described by the Residential Landlords Association as “not fit for purpose”) instead of a Section 21 notice and long delays waiting for bailiffs.

It, therefore, proposes some significant changes to the grounds for possession, and a quicker court process and increased availability of county court bailiffs.

In particular, it proposes:

• A new mandatory ground for all landlords who want to sell the property. Only available after two years. Prior notice would need to be given when the tenancy begins. This could prove extremely useful for RPs and would fill a much-needed gap in asset management planning (3.19 to 3.25).
  
  
• A modified mandatory rent Ground 8 to be used if arrears have reduced to only one month's arrears at the date of the hearing when the ground would become discretionary. However, if the tenant has been in persistent arrears on three previous occasions, then the court must still treat it as a mandatory ground (see 3.26 to 3.31).
  
  
• Suggestions for any improvements to the anti-social behaviour grounds (3.31-3.38).
  
  
• An extended Domestic Violence Ground – also available for use by private landlords (3.41 to 3.47); to only allow the eviction of the perpetrator, not the household.
  
  
• An amended Ground 13 (damage to property) if tenants obstruct or refuse access for safety-related works.
  
  
• For private landlords, an extended Ground 1 (the right to seek possession when the landlord wishes to occupy the property), to occupation by family members too, not just the landlord. Prior notice will still be required (see 3.7).
  
  
• Whether certain types of short-term lets should be exempt from being assured tenancies altogether? (Question 31).
  
  
• For faith groups, a new mandatory ground for religious workers – to enable recovery of possession from a lay person to allow for occupation by a religious worker (3.66 to 3.68).
  
  

Court processes

The paper recognises how much landlords value using the accelerated possession procedure (where there is no court hearing) and asks which other types of possession cases could be dealt with without a hearing? (Question 29). Rent possession cases may be in mind here.

In addition, a promise is made to reduce the time limit that is currently in the court rules for listing a first possession hearing by one week from 8 to 7 weeks.

The consultation goes on to ask:

• For data from each landlord about their court experiences.
  
  
• An open question about whether there are any other issues that landlords wish to raise. Maybe take the opportunity to raise the bee in your bonnet? E.g. the ability to force entry for safety works?
  
  

All landlords should take this valuable opportunity to respond before 12 October and make it clear what proposals are supported or not and why.

It is possible that the changes eventually introduced will be much less broad, but any opportunity to streamline possession proceedings, simplify court paperwork, reduce legal fees and rent arrears can only be a good thing for landlords!

Further information

Should you have any queries about this consultation, then please do not hesitate to contact Helen Tucker.