Section 21 Housing Act, 1988.
1. Brief History
2. What is it
3. Why is it used, and
4. How often
5. Impact on
1. Brief history.
Sec 21 was introduced at a time of High ( relative at the time ) Housing demand and low housing provision.
At the time tenancies were governed by the Rent Act where repossession of properties and control of rent were so restrictive that as a means of encouraging the Private sector to invest, Housing Act tenancies were established.
30 years on and the ‘tide has come in and is already ebbing’ assisted by Tax and incessant regulation. Landlords are exiting the market and the funding or properties for sale are often not suiting or affordable to FTB’s.
Amongst the little known about Section 21, is the proportion of use per tenant in receipt of benefit, or in employment.
For Section 21 used for rent arrears ( more below ) – one of the many factors is the freezing and changes to LHA ( U.C ) The recent 16th April House of Commons Briefing Paper, number 7008 showed specific reasons why landlords have and are at an increasing rate, exiting the Benefit tenant market. Its purely a business – financial one and not any form of discrimination.
Shelter’s own submission to the Work and Pensions Select Committee in February reveals a shortfall in LHA for two bedroom properties in 97% of areas in England. !
Nevertheless, Shelter and the Government continue to press for no restrictions on letting to tenants in receipt of benefit, despite a 2010 Department for Communities and Local Government (DCLG) Private Landlord Survey which found: “The most cited reasons for not letting to HB or LHA recipients were disturbance or anti-social behaviour (19%), expected delays in payment (17%), unpaid rent and damage to property or furnishings (both 16%).
Another risk area where Landlords sometimes rely on Section 21 is tenants not declaring they have a pet, or after commencing a tenancy, keep one without the landlords consent. It was less than a year ago that government were pressing for Landlords to accept more tenants with pets. The Tenant fee Ban 2019 limits Deposits to 5 weeks rent that prevents a Landlord from being flexible enough to cover any additional losses by asking for a slightly higher deposit for a pet. ( given a tenant tactic of not paying the last months rent, in lieu of their deposit in anticipation of not having it returned )
In business and life in general, we quickly have to come to conclusions about people we deal with and make decisions based on trust. One of the tell-tale signs is contradiction or incongruity. With the government announcement by Mr Brokenshire on 23 April that he was going to ‘bring to an end so called no fault evictions…. and that the PRS must remain a stable and secure market for landlords to invest in… that landlords have confidence in the court system… so that it can be quicker and smoother for landlords to regain possession are quite frankly paradoxes ! Added with the Government use of tenant campaign group terminology ‘ no fault ‘ [ even using it on the Tenancy Prescribed Information, How to Rent, a Checklist for renting in England ]
These highlight some of the reasons for lack of trust by landlords and the feeling that any consultation is in bad faith.
2. What is it.
Section 21 allows ‘Recovery of possession on expiry or termination of an assured shorthold tenancy.
Sec 21(1) Without prejudice ( my emphasis, more on that later ) to any right of the Landlord under an assured shorthold tenancy to recover possession of the dwelling house let on the tenancy… on or after coming to the end of a fixed term, a court shall make an order for possession… if the landlords has given the tenant not less than two months notice stating he requires possession of the dwelling.
What this means is that other than a lengthy two month period of notice ( irrespective of any matter or conduct of the tenant ) a Landlord can apply to the court for possession. The legislation does NOT state a landlord has to provide any reason for the requirement to regain possession of his or her OWN property.
Section 21 is one of two main routes for possession of AST’s, the other legal process being under Section 8 of the Housing Act.
Section 8 has 20 grounds which have to be shown – proven to achieve a possession order. The first 8 ground allow for mandatory possession if adjudicated in the landlords favour.
Ground 8, of Section 8 is a common ground where at least two months worth of rent, lawfully due, is outstanding.
Section 8, is the process where a ground must be shown and proven to acquire possession, conversely to Section 21, which does not.
Some Tenant support groups have been referring, tactically to Section 21 Possession processes as, ‘ No fault ‘ when accurately the term should be without any ground having to be shown ( proven )
Whilst this may seem a small derivation or play on words, nothing could be further from the truth. Landlords legal and legitimate use of the legislation since 1988 has been maligned as to evicting tenants for ‘No fault’.
This is not a small derivation but a massive leap into another solar system.
Landlords have in the main invested 6 figure sums of their own – families finances to speculate in the property market sometimes due to the adverse pension provisions prevailing.
They take on significant risk, as with any business venture and seek their returns from a legally binding contract with significant onus upon both parties.
Whilst there is onus for the landlord, breaches which in a number of cases can result in Criminal offences ! – there are considerably less, Civil law sanctions which are of very limited effect for tenants.
A landlord will be seeking two main things from any tenant ( aside from adhering to the contracted tenancy agreement ) which are mainly, paying the rent due, and looking after the property.
For the vast majority of Landlords and tenants, this arrangements works well, with 9 out of ten tenants staying in their rented property until They wish to leave which averages over 4 years.
When a tenancy ends, there are inevitable void periods which can be months and sundry costs to a landlord, including the payment of Council tax and of course, the finance repayment of the business, i.e mortgage. These will not be recoverable.
Consequently it is in the landlords interest to keep a tenant for as long as possible. If a landlord seeks to obtain possession via a court order, it is a lengthy and expensive process
Section 21 possession requires 2 months notice, and then the MoJ claim time for average orders is currently 20.6 weeks NOT including the Two months Notice under Section 21.
For anyone to claim that tenants are ‘suddenly being turfed out’ after over 28 weeks is ludicrous.
Section 8 claims, for rental default of at least two months, require a 14 day Notice and a court possession claim which online ( PCOL ) can achieve a court hearing in some cases within 5 weeks.
All Housing Possession cases attract legal Aid and its usual for a solicitor to raise an objection to some part of the case which will usually be a minimum of 6 – 8 weeks sometimes a lot longer. Deposit disputes are raised that ( should be dealrt with as a separate claim ) is allowed to be off-set against outstanding rent. Minor issues of disrepair many times hitherto unknown to a landlord will be raised. I once overheard a solicitor asking a tenant if there was ‘anything wrong with the property whatsoever’.
3. Why is Section 21 used ?
There are no official statistics collated, which, if there is a concern, would be the logical place to start. Perhaps a targeted solution could then be found, rather than setting off like a loose canon, for which there will be innocent casualties. Landlord Associations surveys of members have shown over half of Section 21 notices are for rent arrears.
Why are those landlords not using Section 8 ( despite the pitfalls in that process ? ) it may be that a landlord has commenced the Sec 8 notice but the tenant has paid off some rent, just enough to bring the outstanding amount below 2 months worth of rent and possibly on more than one occasion.
In my experience, many landlords are slow to increase rent, which reflects their preference for a continuing tenancy, all other conditions of the tenancy being met.
Also, slow to take action on problem tenants. I suspect this more often amongst less experienced landlords who are not aware of the procedure and timescales. In addition, landlords are ‘apprehensive’ of the process.
Just as benefit claimants get savvy at finding out all the ‘rules’, so do tenants, especially serial repeat criminal tenants who flea-hop between landlords.
Despite the longer time for a Section 21 process, the mental piece of mind that is sometimes traumatic for landlords, can be worth it for some ‘perceived’ certainty of Possession.
Also, because a Section 8 claim is usually defended by a legal aid solicitor, the landlords feels obliged to defend themselves by also employing at their personal cost, a solicitor. In some cases, this can be as much or more than the rent outstanding so a landlord embarking on Section 8 could ‘double their losses’ ( not an inviting prospect ! )
Many landlords cite Disturbances – tenant behaviour ( Anti-Social Behaviour ) or damage. Proving tenant behaviour inside the property, that often the landlord is denied access to, is very difficult. Interestingly, the RLA web site advertises the method of dealing with ASB is via Sec 21. ( which practically, is true )
Tenants who breach an AST can be subject to a Section 8, ground 12 application, however this ( rarely ) attracts anything other than at best, if proven, eventually a suspended Possession order.
Landlords experiences from property blogs, interaction with landlords associations and my own clients have very, very little confidence of success in legal proceedings.
Even where a case is 100% compliant, there are on occasions Rogue judicial decisions for which there is No recourse. There is no complaint procedure ( other than against their conduct ) against a judge’s decision. They are in effect, above the law.
The only choice open to landlords is to fund an exorbitantly expensive challenge to the court of appeal, or simply start the possession claim all over. Most landlords not having the option of circa £ 30 k for an appeal, resort to the latter which usually succeeds. ( without reimbursement, of course ) It is for the reasons above that landlords feel the justice (sic) system is prejudiced Against them.
There has been claims of Section 21 being served as retaliation for tenants complaints about the standard of the property. However, legislation was put in place to address this ( Retaliatory Eviction under the Deregulation Act 2015 ) If as Mr Brokenshire suspects, the legislation is not effective, and enquiry into that should be made.
4. How often is Section 21 used.
Well, MoJ statistics show its been declining year on year !
The starting point for analysis is data – fact. Given the declining use, the overwhelming majority of which the reasons are known, ( although not specific to each case ) a period of monitoring would allow an accurate diagnosis, as the old saying, still true, ‘ if it ain’t broke – don’t fix it. ‘
At the time an evaluation period runs on Section 21, re-design of the Section 8 process should be considered and implemented. Shouldn’t the aim be to make Section 8 less intimidating, not stacked against the landlord, that more possession claims progress via this route.
Section 21 Form 6A could be amended for a trial period to ask a reason. ( without prejudice to the claim ) This could be disclosed for comment by the tenant on the Form N11b they submit if there’s a desire to challenge the claim.