Scrapping Section 21 Increases Risk of Delays

Government plans to abolish so-called ‘no fault’ evictions in favour of fair reasons to evict may not increase tenants’ security while proving to be unworkable in practice, according to legal firm, Osbornes Law.

The company has warned that a rise in factual disputes regarding the reasons for eviction will place more pressure on a court system that is already struggling to cope. This was in response to a Ministry of Housing, Communities and Local Government (MHCLG) consultation, A New Deal for Renting.

The MHCLG proposes scrapping assured shorthold tenancies to prevent landlords from using Section 21 of the Housing Act 1988 to evict tenants at the end of a fixed-term tenancy, without putting forward a reason or means of appeal.

As an alternative, the ministry will increase the conditions under which a Section 8 notice to quit can be issued to a tenant, such as breaking the terms of their tenancy agreement or where the landlord wants to use the property for a family member or to sell up. Additionally, the ministry intends providing swifter redress through the courts.

Section 8 process

Shilpa Mathuradas, head of property litigation at Osbornes Law, believes that rogue landlords form a very small proportion of property owners, despite publicity about them evicting tenants for no justifiable reason.

Research conducted by the Residential Landlords Association (RLA) has found that 84% of landlords who had used the Section 21 process did so following rent arrears, and 56% because of antisocial behaviour and damage to property.

Mathuradas commented: “If Section 21 is abolished, landlords need to be convinced that a workable system exists that enables them to seek possession rightfully. And that it can be obtained speedily and efficiently without substantial cost to property owners, who often receive no rent while court proceedings are ongoing.”

A landlord rightfully claiming possession due to rent arrears or bad behaviour by the tenant, she believes, will not be deterred if Section 21 is abolished. The landlord will simply use the lengthier and more expensive Section 8 process, which will not result in more security and stability for the tenant.

Overstretched legal system

The consequence of the reforms will be an unavoidable increase in factual disputes and the requirement for courts to resolve them. Tenants must be able to defend allegations of fault and lodge a counterclaim if appropriate. Judicial examination constitutes protection for both sides and unsuccesful parties to disputes can expect costs to be awarded against them.

In the view of the head of litigation, the problem of delay is not caused by the legal framework but by the overstretched system that applies it. The courts are so overwhelmed by disputes that claims can take months before they are even listed for a first hearing. Some courts have even closed their doors, thereby increasing the lists of the courts that remain open.

Furthermore, courts are making more mistakes, compounding delays. Currently, a landlord using Section 8 has to show two months’ arrears at the date of the service of the notice and hearing to be guaranteed possession. However, tenants often reduce their arrears to below two months before the hearing, once the landlord has incurred considerable legal expenses.

The consultation suggests reducing arrears to one month, and although the tenant could deploy the same tactics to stay put, at least a greater proportion of the arrears will have to be paid before a possession order is made.

Mathuradas concluded that she would like to see a mandatory possession order granted in cases where a landlord has had to initiate proceedings several times only to find at the hearing that the tenant has reduced the arrears to avoid eviction.

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