The End of No Fault Eviction Notices

In June 2022, in an article on 'Residential Leasehold Reform' VWV discussed the government's proposed legislative interventions including the abolishment of 'no fault evictions'. This was shortly followed by a white paper, published by the government, which forms the basis of the Renters' Reform Bill. Nine months on it is still proposed section 21 notices are to become a thing of the past.

What Is a Section 21 Notice?

Under current law a notice pursuant to section 21 of the Housing Act 1988 (a 'section 21 notice') is served on a tenant by a landlord when the landlord wants to end a tenancy and seek possession of the property without the need to provide a reason: it is the start of a 'no fault' eviction ie the tenant does not need to be at fault and there does not need to be a breach of the tenancy. At least 2 months' notice must be given and can be served to end an assured shorthold tenancy (AST) at the end of a fixed term or in accordance with a break provision. If the tenant does not leave after the set notice period, a landlord must seek a possession order from the Court.

Landlords can use section 21 notices as a 'tool' to gain possession of the property to either re-let at a higher rent, sell the property or where there is a breach of lease and, for example, they want to stop any future rent arrears accumulating. The proceedings that follow can in certain instances be dealt with by the Court 'on paper' which means a Court hearing is not required.

What Is the Renters' Reform Bill and Its Effect on Section 21 Notices?

The Renters' Reform Bill is based on a white paper published in June 2022 titled 'A fairer private rented sector' (the 'White Paper'). The White Paper sought to make the private residential rental market fairer. It covers a wide range of reforms which seek to improve the quality, safety and security of homes for tenants.

If section 21 notices are abolished landlords will only be able to evict their tenants in limited circumstances. Those circumstances include:

• where the landlord has an intention to sell the property
• where the property is intended to be occupied by the landlord or close members of the landlord's family.

How Will This Affect Tenants?

The Renters' Reform Bill has been positively received by tenant organisations. The Bill will provide greater security to tenants in the private rental sector and abolishing section 21 notices will enable tenants greater flexibility in leaving rented properties.

How Will This Affect Landlords?

The proposal has not been welcomed by landlords who have valued the flexibility that section 21 notices have previously provided, albeit that over recent years there has been increased regulation over the circumstances in which a valid section 21 notice can be given.

While they will still be able to seek possession where the tenant is in breach of the tenancy agreement it is anticipated that abolishing section 21 notices will lead to a decline in investor confidence as fewer landlords purchase buy to let properties, directly affecting growth in the residential market and meaning fewer properties are available for rent.

The abolition of section 21 notices will no doubt lead to further Court hearings and Court delays as landlords seek possession based on tenant default which will necessarily lead to more defended cases.

Landlords are understandably considering their position where they have residential tenants. While the Government initially indicated it would introduce this legislation before the end of 2022 more recently we were told it would be introduced 'in this Parliament'.

As regards to how the changes, once brought in, will apply it is currently proposed that:

• there will be at least six months' notice before the first implementation date when the new rules will apply to new tenancies; and
• there will be at least a further 12 months' notice after the first implementation date before the new rules also apply to existing tenancies.

As such there is still some time to watch how the proposed changes might be further amended before being brought in and when the new rules will become effective, particularly to current tenancies.

For more information on no fault eviction notices, please contact Grace Denis in our Property Litigation team on 0117 314 5455, or complete the form below.