OPINION: What abolishing Section 21 evictions will mean for landlords

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The long-awaited Government White Paper, ‘A Fairer Private Rented Sector’, has finally been released which, amongst other significant changes to the sector, confirms the abolition of Section 21 and starts to map out the future of evictions.

Moving forward, landlords will always need to provide a reason for ending a tenancy, such as wishing to sell the property or wanting to move back in.

While this will be unnerving for some landlords, the reality is that this has been a long time coming and I believe those landlords who are committed to buy-to-let will remain.

The changes offer tenants greater security as part of a plan to create longer tenancies. But implementing more mandatory grounds of possession under Section 8 should also strike a chord with tenants, demonstrating that rent arrears, criminal and anti-social behaviour will not be tolerated. 

Previously, landlords have used Section 21 in these cases because trying to collate witness statements from co-tenants and neighbours has been challenging and often fruitless where the ground was discretionary.

Knowing this procedure is mandatory will mean a judge has to grant possession as long as the requirements are met and evidence provided.

Disappointing

I think it is disappointing that the notice period for the existing arrears eviction ground will be increased from two to four weeks, but I welcome the new mandatory ground for repeated serious arrears to prevent tenants paying off a small amount of arrears to stay below the eviction threshold. 

But I believe falling into series arrears twice in three years should be sufficient for mandatory eviction rather than the proposed three cases.

It is positive news that the changes have not been rushed in and the transition will be in two stages with at least six months’ notice of the dates that they will take effect, and at least 12 months between the two dates. 

Evictions spike

With concerns surrounding the cost of living, rising interest rates and impending changes to EPCs, I do think it is likely we will see an initial spike of landlords using Section 21 before the changes come in, of which the unintended consequence will be that perfectly good tenants will be evicted.

Over a third of Landlord Action’s instructions currently use Section 21 notices, so this is an indication of how much additional resource the court system will require, and a new robust system must be implemented to give landlords and agents the reassurance they need.

But much of what had been announced was expected.  It will take time for landlords to adapt and understand the new rules but as with everything, the market will adjust and find its new norm.

Author bio: Paul Shamplina is founder of Landlord Action and Chief Commercial Officer for the Hamilton Fraser Group.

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Homes for Ukraine scheme to allow unaccompanied children

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The Homes for Ukraine scheme will allow children and minors under the age of 18 who have already applied through the Homes for Ukraine Scheme to come to the UK without a parent or guardian.

After working closely with the Ukraine government

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NRLA moves to ensure landlords’ interest are considered in key RRO case

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The NRLA has intervened in a long-running legal wrangle over who pays a rent repayment order (RRO) when a property is operated via a rent-to-rent agreement.

The Rakusen vs Jepsen case will, ultimately, decide whether it’s the ‘superior’ (or actual) landlord or the ‘immediate’ one – i.e. the rent-to-rent agency – who is liable to pay the RRO.

The case has been rumbling on since 2019 when four tenants living in a property in North London realised their property had not been licenced under local HMO regulation rules.

They then successfully applied for an RRO not against the agency, whose management of the property had come to an end, but the owner of the leasehold flat, also called the superior landlord.

£26,000

In a subsequent Upper Tribunal case, the landlord argued it was the agency who should pay the £26,000 RRO as they had managed it at the time of the offence and received the rent from the tenants.

The Upper Tribunal awarded in favour of landlord Martin Rakusen but gave the tenants leave to appeal, largely because an earlier Upper Tribunal decision in Goldsborough & Anor v CA Property Management Ltd (2019). It had determined that an RRO could be made against a superior landlord despite there being no contractual connection between them and the tenants.

Rakusen then took his case to the Court of Appeal which found in his favour in July last year – i.e. that the agency should pay the RRO not him – but the tenants’ legal team then won a new hearing in the Court of Appeal.

NRLA intervention

A date for this is now being awaited, but in the meantime the NRLA has applied to intervene in the case because it believes that the outcome of the case may affect other landlords whose interests should be heard and whom it wishes to represent.

“This does not mean that we are directly supporting either litigant or have become party to the case,” it says in a statement published today.

Its Policy Director Chris Norris (pictured) adds: “The Housing and Planning Act 2016 specifies that an order can be made against ‘a landlord’.

“The Court of Appeal decision found that had parliament wished the legislation to act as a deterrent to superior landlords, it could have made “clear and express provision for it”, which it did not.

“In our intervention, we do not seek to defend bad practice or provide a route for rogue rent-to-rent operators to evade sanctions. We intend to make clear the potential implications for other superior landlords who may equally be victims of unscrupulous rent-to-rent firms.”

Read more about rent to rent orders.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – NRLA moves to ensure landlords’ interest are considered in key RRO case | LandlordZONE.

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Check your properties regularly warns landlord after armed police raid rental house

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A landlord too terrified to reveal her name has warned others to conduct more regular property checks after she unwittingly rented her house to a drug-dealing gang for years.

The North London-based landlord has had the same tenants since 2005 but only discovered their illegal activities when armed police turned up and took all five – two parents and their three grown-up sons – into custody.

It transpired that they had been involved in supplying class A, B and C drugs and, while the parents received two-year suspended sentences, one son is now serving six years in jail and one other was jailed for eight years.

“It came as a complete shock,” she tells LandlordZONE. “We had previously been neighbours, our sons were friends and we never had any problems with them until last summer.

“They paid their rent on time and even told me not to worry about installing a new boiler. Unfortunately, none of the neighbours knew where we had moved to, to report the increasing suspicious activity.”

Arrests

After the arrests, she discovered that the family had been packing drugs in mobile phone cases, which the mother regularly posted off at the local post office, since 2017.

The landlord immediately served a Section 8 notice but other family members moved in and changed the locks, and it was only after Landlord Action got involved that the court process finally got underway.

Read more: How to inspect your property.

She is now waiting for a possession order after struggling to evict the family since June 2021 and is resigned to not getting back the £14,000 in rent arrears. The landlord is also braced for an expensive renovation bill.

“Even if you’ve known someone for years you might not know what is going on in their house,” she adds. “This whole experience has been extremely stressful but I think we’ll rent it out again – next time we’ll do more regular checks.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Check your properties regularly warns landlord after armed police raid rental house | LandlordZONE.

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Section 21 eviction ban? We’re off to short-term lets, say thousands of landlords

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Thousands of landlords have vowed to switch to short-term lets when Section 21 notices are abolished, a new survey has found.

Assist Inventories’ study of 10,000 landlords and letting agents revealed that 45% plan to move away from long-term tenancies while 41% said they might consider it.

Quizzed on the government’s plans to scrap no-fault evictions in the Fairer Renting White Paper, more than 70% of letting agents said the abolition of Section 21 would or might cause an exodus of landlords from the market, however 60% of landlords said it wouldn’t. Interestingly, it found that 68% of letting agents don’t agree with the strategy, while 55% of landlords are against it.

Following any change in the eviction law, 75% of landlords said they will become more selective when choosing tenants, while 90% of landlords and 70% of lettings agents want clear and comprehensive grounds outlined for possession.

Raj Dosanjh, founder of Rentround, says the changes could be hard on both landlords and tenants. He adds: “The abolition of Section 21 is clearly a worry for agents and landlords

“Due to the additional risk the abolition will bring to landlords, it’s obvious that many will move to shorter tenancies and more stringent tenant background checks. This will make it harder for tenants with blemishes on their record, or those looking to get long term residencies to rent in the future.”

Assist Inventories also asked about the Decent Homes Standard and discovered that 35% of landlords don’t have a clear understanding of it, while 70% of letting agents and 64% of landlords believe there is a lack of incentive for landlords to improve accommodation. Only 48% of landlords and 57% of agents believed a landlord register should be mandatory.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Section 21 eviction ban? We’re off to short-term lets, say thousands of landlords | LandlordZONE.

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Tenants and Pets

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The Government’s White Paper “A Fairer Private Rented Sector” sets out proposals to allow tenants in private rented properties to keep pets. As always, the devil will be in the detail but things do not look hopeful for landlords trying to protect the value of their property.

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Is it not an idea to get landlords paid for their time and administrative effort?

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I lose a lot of time (especially being an HMO landlord) with referencing tenants. Both referencing companies and tenants seem to expect all this to be done for free!

It costs landlords time and money, checking when the tenancy started

View Full Article: Is it not an idea to get landlords paid for their time and administrative effort?

WARNING: Proposals to abolish fixed-term tenancies will ‘ruin student market’

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Abolishing fixed-term tenancies will devastate the student market and lead to a major contraction of student homes to rent, warns a leading accommodation provider.

The government’s Fairer Renting White Paper includes plans to move all new and existing tenancies to periodic agreements where tenants will be able to give two months’ notice to quit, while landlords will have to rely on the current mandatory grounds.

Leicester-based Sulets – a not-for-profit, charitable trust – says the student market works on the basis of fixed-term tenancies where there is a defined start and stop date directly linked to university terms.

If tenants gave two months’ notice, the likelihood of most landlords being able to rent to students for anything even approaching a calendar year would be fairly low, explains CEO Irving Hill (pictured).

He says: “If the student tenant should give notice, the chance of renting to another student becomes increasingly difficult as the academic term wears on and particularly so over the summer.

“Importantly, there will be no guarantee that the property will be available to rent at the start of the normal termly cycle in September which will make any type of planning extremely difficult for student landlords and agents.”

Exempted

Purpose-Built Student Accommodation (PBSA) has been specifically exempted from these provisions in the White Paper, adds Hill, leading to a disparity. “This will restrict choice and will mean increased costs for students due to the significant price differential between PBSA and the student PRS.”

Some landlord leaders have already warned that the entire student let model could fall apart if a loophole isn’t put into the legislation to maintain fixed-term contracts. 

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – WARNING: Proposals to abolish fixed-term tenancies will ‘ruin student market’ | LandlordZONE.

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Tradespeople given the “ick” by customers!

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New research has revealed the customer behaviours that tradespeople find most annoying, and being watched while they work tops the list.

The study, conducted by IronmongeryDirect found that more than two in five (41%) tradespeople find it irritating when clients won’t leave them alone while working.

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Meet Mark Smith (Barrister-At-Law) Landlord tax planning strategies – pin Luton

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Our Hon. Legal Counsel, Mark Smith, Head of Chambers at Cotswold Barristers, will be presenting in person an overview of several landlord tax strategies at the pin Luton meeting Tuesday 28th June.

The Luton pin Meeting has returned to its physical venue The Holiday Inn London-Luton Airport

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