Section 21

A Complete Guide to Section 21

Image result for section 21What is a Section 21 notice?

In England and Wales, landlords must serve tenants a Section 21 notice (also known as notice to quit) to regain possession of a property. A Section 21 notice is used if they are unable to use Section 8, or do not want to (see below for more information). A Section 21 notice can only be issued on a property let on an assured shorthold tenancy agreement. When issuing a Section 21 notice, the landlord does not need to provide a reason for wishing to take possession.

A Section 21 notice must give tenants at least two months’ notice to vacate a property. A Section 21 notice cannot be used during a fixed term. However, landlords can use a Section 21 notice to conclude a tenancy at the end of an agreed fixed term, or during a periodic tenancy.

 

Recent updates to Section 21

The government have recently proposed the abolition of Section 21 and will be consulting on this with the stated view of bringing in new legislation as soon as possible. With the proposed Government changes, landlords will need to use the Section 8 process in order to regain possession of their own properties. This means that landlords can pursue possession but only under specific conditions, such as where the tenant has breached the tenancy. This can include situations such as damage to the property, antisocial behaviour and several months of rent arrears.

The Government has stated that they are looking to make changes to the Section 8 process, including speeding up the process as well as introducing new grounds, such as when a landlord wants to sell or use the property as their primary residence.

At the moment, it is unclear what reforms will take place, what the fine details may be and when this will happen. There is also no guarantee that the proposed changes Section 8 will have the intended effect. The Government will need to introduce and pass legislation in Parliament in order to make these changes. Furthermore, these amendments are not expected to be retrospective and therefore existing tenancies should not be affected.

Reasons to serve a Section 21 notice?

There are many reasons to serve a Section 21 notice. Some of these can include the landlord wanting to move back into the property, or to refurbish the house. A Section 21 notice is often referred to as a no-fault eviction which means that the landlord does not need to prove the tenancy terms have been breached. It also allows the landlord to regain possession of their property without giving the tenant a reason why.

You can evict tenants who have an assured shorthold tenancy using a Section 21 or Section 8 notice, or both. You can use a Section 8 notice if your tenants have breached the terms of the tenancy. You can use a Section 21 notice to evict your tenants either at the end of the fixed term tenancy if there’s a contract or during a tenancy with no fixed end date, known as the periodic tenancy.

Serving a Section 21 notice correctly

You must always give your tenants at least two months’ notice to leave a property.

When serving a Section 21 notice landlords must use the correct version of the form. For a tenancy agreed from 1 October 2015 in England, landlords must use Section 21 Form 6a. For other ASTs in England and Wales, there are different forms. All versions are downloadable for NLA members at NLA Forms.

Furthermore, landlords in England cannot use a Section 21 notice if they have not provided the tenants copies of the property’s Energy Performance Certificate, a gas safety certificate and a ‘How to Rent’ guide (only for tenancies agreed from 1 October 2015).

Landlords also must make sure that tenants have been given the prescribed information around tenancy deposit protection. All security deposits must be protected with a deposit protection service in line with regulations.

It is suggested that when a landlord issues documents, they should ask the tenants to sign and confirm receipt or to send an acknowledgement email if the documents are sent digitally. This is helpful for if an eviction is challenged and goes to court.

When a landlord can’t use a Section 21 notice?

A landlord cannot use a Section 21 notice if any of the following apply:

  • It is less than four months since the tenancy started (in England)
  • A tenant is asked to leave before the end of a fixed term, unless there is a clause in the contract that allows the landlord to do this
  • The property is a licensable HMO or requires a selective licence and does not have a licence from the council
  • The council has issued an Improvement Notice or Notice of Emergency Remedial Action for the property in the last 6 months (in England)
  • The tenancy started after April 2007 and the landlord has not put the tenant’s deposit in a deposit protection scheme
  • he landlord has not repaid any unlawful fees or deposits that they have charged the tenant
  • The property is not registered with Rent Smart Wales and the landlord or managing agent does not have a licence (Wales only)

For further information and advice visit the National Landlords Association

Top tips for landlords on how to manage a Section 21 notice

Top tips for landlords on how to manage a Section 21 notice Proposals by the main political parties, including the Tory government, to scrap Section 21 notices to evict tenants could potentially pave the way for the mass exodus of landlords from the private rented sector in the coming years.

According to the National Landlords Association (NLA), abolishing Section 21 evictions could lead to the private renting section shrinking by as much as 20%, with up to 960,000 fewer homes available to renters if landlords pull out of the market.

But while the legislation still exists, landlords still need to be aware of how to manage the section 21 process and ensure rules are being followed.

To help landlords, Paula Haverkemp, a paralegal at East Midlands-based law firm Nelsons’ property disputes team, shares her advice and tips for landlords on how to manage a section 21 process.

What is a section 21?

“A section 21 notice/form 6A is a no-fault notice that enables landlords to evict tenants who have entered into an assured shorthold tenancy (AST) agreement without a reason. Before issuing a section 21 notice, a landlord must ensure they have complied with the requirements as defined in the Deregulation Act 2015.”

When would a section 21 notice be used?

“If a tenant does not vacate the property at the end of the fixed-term, the only way a landlord can evict a tenant lawfully is to serve a section 21 notice upon them.

“This also applies if the tenant remains in occupation at the end of the fixed-term and the AST becomes a statutory periodic tenancy (SPT). This means the tenancy runs on exactly the same terms as defined in the expired AST on a month by month basis.

“The section 21 notice can be served during the fixed-term but only once the tenant has been in occupation of the property for four months. However, as section 21 notices now have a shelf life of six months from the date the notice is signed, a landlord will need to pay particular attention to the date they serve the notice – especially if the AST is for a fixed-term of 12 months.

“If a tenant is not in breach of their AST or SPT, the only way a landlord can evict them lawfully is to serve a section 21 notice upon them.”

How long will the process take?

“The section 21 notice is a two-month notice. If the tenant does not vacate in accordance with the notice, the only way a landlord can obtain vacant possession of their property lawfully is to obtain an order for possession through the court. This process usually takes approximately two to three months to obtain, depending on how busy the court is.”

What changes are the government planning to make?

“The government is proposing to remove the AST from the Housing Act 1988 meaning that these types of tenancies would only be available to private landlords. We may also see the government introduce fixed-term assured tenancies, which would commit the tenant and landlord to a specific time period. This would mean a fixed-term tenancy could be renewed or become an assured periodic tenancy if not ended by tenant or landlord.”

What happens if the law changes?

“The proposed changes to legislation are currently being consulted on and will then need to be progressed through parliament before they come into play. However, it is unlikely any changes will take place before late 2020.

“Regarding ASTs, the government has also confirmed the changes will not affect any pre-existing tenancy agreements. The landlord will still need to go through a section 21 process when the tenancy ends.”

Scrapping Section 21 could lead to ‘open-ended tenancies and rent controls’

The government’s plans to scrap Section 21 notices to evict tenants could potentially pave the way for the introduction of open-ended tenancies and rent controls, according to London Assembly member Tom Copley.

The Labour politician is urging the government to press on with plans to outlaw the use of Section 21 eviction notices. 

In a letter to the housing secretary, Robert Jenrick, Copley said that with more than a quarter of Londoners now renting, more stringent measures should be put in place to prevent tenants being forced to leave rented homes with two months’ notice, without having to provide a reason for the eviction. In July, the Ministry of Housing, Communities and Local Government (MHCLG) launched a public consultation on its proposals to scrap the use of section 21 notices.

The MHCLG expects any changes to come into force by late 2020 or early 2021 and have highlighted that this will also be dependent on where other government priorities may take precedence.

But in his letter to the housing secretary, Copley called upon the government to swiftly scrap section 21 now that the consultation has closed. He said this was a “vital first step” towards providing more robust protections for the growing number of private renters.

Copley also wants to see the government take a further step towards sparking wider reform in the PR by following the example of other European countries and introducing open-ended tenancies. Copley said: “The threat of no fault evictions can deter tenants from reporting problems with repairs to their landlords for fear of retaliatory eviction. Abolishing ‘no fault’ evictions is the vital first step in protecting tenants in an often unfair and unforgiving private rented sector.

“There were thousands of no-fault evictions in London last year, but this is likely to be the tip of the iceberg. So we need to get on with scrapping section 21 without dither or delay.

“We know that the end of a private tenancy is now the leading cause of homelessness in the capital. It is clear that the sector needs quite radical reform as a matter of urgency.

“Of course, after abolishing section 21, the government have a golden opportunity to go further and follow the lead of many other European countries by introducing open-ended tenancies and rent controls.”

Scrapping Section 21 could fuel a rise in homelessness, warns Landlord Action

Tenant eviction specialist, Landlord Action, reports that up to half of Section 21 cases they handle are as a consequence of tenants wanting to be re-housed by the council.  The company fears that the scrapping of Section 21, and subsequent expansion of Section 8, could put thousands of tenants at greater risk of receiving a County Court Judgement (CCJ) and ending up homeless as local councils will not be obliged to re-house those with rent arrears judgements.

Some 95% of Section 8 cases are for mandatory two months’ rent arrears, according to Landlord Action, and although it is unknown how many Section 21 cases are as a result of rent arrears, the evictions firm says it is the number one reason landlords serve notice. 

Data from the Ministry of Justice reports that there were 22,527 accelerated possession claims issued in 2018 (section 21 claims). Of those accelerated possession claims under Section 21, 10,127 resulted in evictions carried out by County Court bailiffs.  Therefore, if landlords are forced to use Section 8 route in the future, thousands more tenants will have rent arrears judgements against them, rather than simply being evicted using Section 21.

In addition, more tenants could find themselves with a County Court Judgement (CCJ), which will severely impact their future credit rating. 

Paul Shamplina, founder of Landlord Action, commented: “Local councils will see when a tenant has a rent arrears possession order made against them so will consider that that tenant has made themselves homeless. Therefore, the council will not be obliged to re-house them as they do at present under Section 21 accelerated procedure.

“If those tenants cannot get accommodation in the private rented sector and cannot be re-housed by the council, what will happen to them?”

Recently, MHCLG attended Landlord Action offices shadowing the solicitors and paralegal staff to gain a greater understanding of the possession process, and what impact reforms to Section 8 and court processes could have.

Shamplina added: “As well as a rise in homelessness, I believe there will be many other unintended consequences following the abolition of Section 21. These will include, but not be limited to; vulnerable tenants struggling to find accommodation as landlords become more selective; a surge in Section 21 claims as landlords feel increasingly powerless and opt to exit the market.  A shrinking private rented sector will result in further rent rises for tenants.

“In addition, unless anti-social behaviour is tackled within the reforms, unruly tenants will have the opportunity to remain in properties for longer causing landlords and their neighbours unnecessary stress.”

With the government consultation on Tenancy Reform ending on 12th October, Landlord Action is urging all landlords and lettings agents to have their say and complete the survey as a matter of urgency.

Lib Dems vote to scrap Section 21

The Liberal Democrats have pledged to abolish Section 21 repossessions in the private rented sector if they come to power at the next general election. Members voted for the new policy at their party conference in Bournemouth yesterday by an overwhelming majority. The existing government’s current consultation on the abolition of Section 21 runs until Saturday 12th October. The proposal to remove Assured Shorthold Tenancies (ASTs) from the Housing Act 1988 essentially means that assured tenancies will become the only type of tenancy available to landlords.

David Cox, chief executive at ARLA Propertymark, commented: “The vote at the Liberal Democrat Conference is another attack on the private rental sector and landlords operating within it.

“The effects of the tenant fees ban have not yet been felt, and yet more proposed legislation could deter landlords from operating in the market. 

“Although in the majority of cases there is no need for Section 21 to be used, there are times when a landlord has no choice but to take action and evict tenants from a property.

“The proposed commitment will only increase pressure on the sector and discourage new landlords from investing in buy-to-let properties. This comes at a time when demand is dramatically outpacing supply, and rent costs are rising.

“ARLA Propertymark will be engaging with the Liberal Democrats to ensure they fully understand the consequences of any changes, and all changes are based on evidence, so landlords have the ability to regain their properties if needed.”


 

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