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Proposed Amendments To Section 21 And What It Means For Landlords

  • Posted:  4 years ago
  • Categories:  Landlords
Proposed Changes to Section 21 and What it Means - Valor Properties Estate & Lettings Agents

Section 21 of the housing act of 1988 gives the landlord a right to issue an eviction notice and initiate possession proceedings against a tenant without giving reasons for the eviction. Ideally, the section gives a landlord or their agent the right to end a tenancy agreement at their own convenience without explaining the reasons to their client. Proposed legislative changes to this section of the housing Act 1988 may, however, see the landlords lose this privilege. The proposed amendments, if adopted and implemented, would see the landlords required to disclose reasons for ending a tenancy in writing.

Why change the section?

Proponents of section 21 legislative change consider it one of the most misused legislative pieces and even nicknamed it the ‘retaliatory eviction’ act. They accuse most landlords of issuing the unexplained eviction act every time a tenant issued formal complaint demanding repairs.

The amendments also draw inspiration from the success of similar changes in Scotland. A lot of political and media pressure has thus been exerted by the different interested parties seeking a fast-tracked legislation and adoption of the changes.

The push would particularly achieve a significant boost after the London assembly initiated discussions around the issue while pursuing the mayor to back the campaign. The members also seek his help lobbying for its implementation nationally. But what are some of the proposed changes and how do they affect the state of tenancy and landlords in the country?

Proposed section 21 changes

Most of the proposed changes to section 21 of the housing act touch on the issuance of the eviction process and include:

  • Landlord to give reasons for the issuance of an eviction notice
  • Section 21 notices must be given to the tenant two months in advance but before the start of a fixed tenancy term.
  • An eviction notice shall not be issued within the first four months of the tenancy.
  • The tenant must have access to all the necessary licenses relating to the occupancy such as gas safety certificate at the commencement of the lease.
  • An eviction notice shall not be issued six months after the issuance of a written complaint regarding repairs by a tenant.
  • Makes it impossible to increase rent prices twice a year.

While most of these regulations seem innocent from the onset they have far-reaching ramifications with regards to the tenant-landlord relationship. Most landlords, particularly investors involved in the build-to-let projects, may consider them prohibitive and limit their rights and freedom. But are these changes as restrictive as most landlords may make one believe? What impacts do they have on landlords?

How do amendments to section 21 affect landlords?

1. No retaliatory evictions

With the adoption of the proposed changes to Section 21 notice, landlords will no longer have the right to end a tenancy based on high repair costs demanded by a tenant. Traditionally, landlords or their agents would require a tenant to vacate a house if they insisted on the landlord undertaking significant and costly yet tolerable property repairs to create room for tenants who wouldn’t mind the condition.

This reaction has since been branded retaliatory eviction and forms the bone of contention in the Housing Act of 1988 that informed the changes. With the changes, the landlord will be required to give reasons for ending the tenancy before the maturity of its term to the tenant in writing.

2. Notice can only take effect after four months of tenancy might be confusing

A section 21 notice can only be issued four months after the inception of any tenancy agreement. The tenant must also be given a two months eviction notice. However, the eviction notice becomes void at the start of a new lease period.

How then do you get a tenant subscribed to a six-month tenancy agreement to leave as the two amendments take up the six months to implement after which the notice is voided? Such an issue was bound to evoke confusion on the part of the landlords as they try to figure out the correct timing to issue the section 21 notice.

Further amendments propose that landlord issue the notice after the expiry of the first four months. Where the client fails to vacate upon expiry of the sixth month of the lease, they may be forced to pay rent equivalent to the number of days they remain at the house.

3. Landlords should brace for more repair complaints

Any actions perceived as retaliatory to demanding for repair complaints by the tenant are not tolerated under the new law. These acts include issuance of the section 21 notice within six months after reception of such claim or exorbitant rise in rent prices deemed to discourage the tenant from continuing the tenancy.

The adoption of the regulations may, however, see tenants who don’t wish to vacate houses or unwilling to pay more for rent resolving to issue formal repair complaints to the landlords and their agents as a cautionary measure. Landlords should brace for increased formal complaints from tenants by establishing effective follow-up strategies for each claim.

The landlord or his representatives should also fast-track the process of issuing tenants with different licenses early on in the period of the tenancy. Moreover, should updates to the existing permits arise, the tenant should be made aware as soon as possible to prevent them from using this as an excuse not to vacate a house or acknowledge rent increments.

4. Harder to implement rent increments

While the new legislation doesn’t explicitly guard against rental increments, it makes it harder for landlords to make upward rent rate adjustments twice a year. The changes stipulate that a tenant must be issued with a three-month notice for such proposed increments. And with the average tenancy agreements in the country spanning six months, it becomes increasingly hard to make successive rent increments in the same year.

5. Exceptions to the rule

It is not all doom for landlords, particularly the buy-to-let investors who let out houses and apartments on an assured shorthold tenancy basis. Tenants in these buildings can’t claim the retaliatory eviction argument as the basis for their refusal to vacate such buildings.

In the case of disputes, however, the homeowner must provide the courts with sufficient evidence that they are genuinely trying to sell the home or apartments. The retaliatory eviction claim wouldn’t bar a court from allowing the landlord from instituting a possession claim that includes getting a county court bailiff to enforce the eviction at such a point.

Bottom line

The amendments to section 21 of the Housing Act of 1988 are meant to restore sanity in the housing industry. They hope to redress the accusations and counter-accusations traded between tenants and landlords especially on matters relating to the issuance of the eviction notices. On the one hand, are tenants terming it as retaliatory evictions while on the other hand, are landlords accusing their clients of using it as a scapegoat. Nonetheless, if the success achieved by the adoption of the changes to the Act in Scotland is anything to go by, landlords don’t have to worry about losing any of the rights to their property.