On 16 June 2022, the government published the Fairer Private Rented Sector White Paper, setting out its plans for fundamental reform to “level up housing quality” in the UK.
Section 21 Notices to be Abolished
One of the most important of those proposed reforms is the abolition of Section 21 notices and no-fault evictions, which currently entitle landlords to a possession order if 2 months’ notice has been given and certain criteria are met.
The government argue that abolishing Section 21 notices will “level the playing field between landlord and tenant, empowering tenants to challenge poor practice and unjustified rent increases, as well as incentivising landlords to engage and resolve issues”. However, what is proposed as the alternative?
New Grounds for Possession Introduced
Firstly, it is proposed that a new ground for possession be introduced, which allows landlords to recover possession of their properties should they wish to sell, move back in themselves, or allow a family member to move in. This ground will not be available during the first 6 months of a tenancy, and it is likely that at least 2 months’ notice will have to be given, which mirrors the existing Section 21 regime.
At present, it is not clear whether this will be a mandatory or discretionary ground but, if the idea is to reassure landlords that they will still have an automatic right to possession if and when Section 21 is abolished, it is likely to be mandatory.
Secondly, in addition to Ground 8 of Schedule 2 to the Housing Act 1988 (where the Court must grant a possession order if the landlord can show that at least 2 months’ rent arrears were outstanding when the notice was served and at the time of the hearing), it is proposed that a new mandatory ground for possession for “repeated rent arrears” be introduced within the private rental sector.
When a landlord has relied on this new ground, the Court must grant a possession order where a tenant has been in at least 2 months’ rent arrears three times within the previous three years, regardless of the arrears balance at the date of the hearing. The idea is to prevent tenants from paying off a small amount of their arrears just below the hearing in order to avoid a possession order being made against them on Ground 8. It is also proposed that where a landlord has relied on the existing Ground 8, the amount of notice that has be given will be increased from 2 weeks to 4 weeks, giving the tenant a reasonable opportunity to reduce their rent arrears. The same notice period is also likely to apply to the new “repeated rent arrears” ground, although this is not clear at present.
From a private landlord’s perspective, it is encouraging that the government are proposing to strengthen existing grounds for possession or introduce new ones, which will still allow the Court to grant a possession order in defined circumstances. However, with the Courts already dealing with a huge backlog of cases, and assuming physical hearings will be required to determine possession claims relying on the newly proposed grounds, what impact will removing a landlord’s ability to rely on a Section 21 notice in an Accelerated Possession Claim (which is usually dealt with entirely on the paperwork without the need for a physical hearing) have on the already heavily-burdened Court system?