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16-04-2019

What does a ban on no-fault evictions mean for landlords and tenants?

Partner Graham McPhie examines the recent news that will see no-fault evictions to be banned in England.

If you are a landlord or tenant in the England, you would have been alerted to the news that no-fault evictions are to be banned.

 

The change is intended to strengthen the security of tenure rights for people in privately rented accommodation. The perception is that those tenants who complain to landlords find themselves being evicted via the use of the section 21 notice at the end of their usual 6 months fixed term. Many consider this to be an unfair use of the law allowing poor landlords to evict tenants with legitimate complaints. However many landlords are troubled about the change. In fact the National Landlords Association has said it will create “chaos”.

 

The BBC wrote this morning that Section 21 notices allow landlords to evict renters without a reason at the end of their fixed-term tenancy. (Click here to read the article).

 

The Housing Act 1988 replaced the Rent Act 1977 with a view to increasing the pool of supply in the private rented market. At the time, of course, the supply of local authority housing was diminishing but the strict requirements of the Rent Act 1977 with protected rents and strong security of tenure rights for the tenant meant that private landlords were discouraged from letting their properties. In effect, a landlord could be faced with a relative meagre return and a virtual impossibility to obtain vacant possession.

 

The Housing Act 1988 was to reform this situation and, as in many things, there needed to be some form of compromise between the rights of the parties. The Act created two new types of tenancy, the Assured Tenancy (with full security of tenure rights) and a further version of the Assured Tenancy call  the Assured Shorthold. This gave the tenant a guaranteed security of tenure period of at least 6 months but with the landlord having an absolute right to obtain possession at the end of that period by the giving of at least two months notice. Initially this Assured Shorthold could only be created by giving prior notice to the tenant but that requirement was subsequently abolished so that the Shorthold became the default tenancy unless the parties specifically agreed otherwise. The clear intention must have been to encourage landlords to let their properties and whole regime was set up to ensure that vacant possession could be obtained easily.

 

It could be said that the increase in the private rental market is a success for the policy put in place under the Act in that it has indeed allowed the private landlord to fill the void left in the decrease in the local authority housing supply.

 

Times have moved on, however, with the consideration now to look at the rights of the tenant and the precarious position many find themselves in. Perhaps this is a realisation by those in power that the economy is such that many will no longer be able to afford to buy their own property and so will be in private rented accommodation for their adult lives?

 

Under the current law, a landlord still has the ability to evict a tenant if there are various defaults on the part of that tenant. There are mandatory or discretionary grounds which require the service of a section 8 notice.

 

What is a section 8 notice?

 

Depending on the ground used, the time the tenant has to be given can vary from 2 weeks to three months. The most common ground to use is rent arrears and the time to be given varies on the level of arrears. Rent arrears of more than 8 weeks or two months (depending on payment period) is a mandatory ground for possession. Less than that or persistent late payment is a discretionary ground.

 

It remains to be seen whether the legislature will either increase the period for security of tenure from the current 6 months or whether it will abandon entirely the concept of an assured shorthold tenancy.

 

There will no doubt be debate on both sides as to the desirability of these steps but there is no doubt that this needs to be considered as part of a coherent housing strategy without seeking to demonise landlords. A balance must be struck between the rights of both parties. If not, there must be a danger that, as with the Rent Act 1977, private lets becomes an unattractive option. At present, however, it cannot be said with confidence that local authority housing can fill that void. For tenants, security will be a good thing unless the supply of housing diminishes. For landlords, it may be that the use of the current section 8 notice becomes the default way to obtain possession.

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