Rural landlords in particular could suffer from major legal reforms on removing tenants. John Robson examines the main issues.
The government’s plans to scrap ‘no-fault’ evictions have potentially severe and far-reaching implications for rural landlords.
Ministers have launched a consultation process on proposals to abolish Section 21 of the Housing Act 1988, which would stop private landlords from evicting tenants on Assured Shorthold Tenancies (AST), without a legally defined reason.
Under the current system, landlords can remove tenants with eight weeks’ notice at the end of a fixed-term contract, without needing to give an explanation.
Why the government wants to bring in the changes
The government claims Section 21 evictions are difficult for tenants to challenge and cites them as one of the major causes of family homelessness. There is little doubt that the system can be abused.
If the new proposals are implemented, landlords who wish to obtain vacant possession of their property must instead use Section 8 of the Act. This can be invoked when a tenant fails to pay rent; is convicted of criminal or antisocial behaviour, or breaches the rent agreement – for example by damaging the property. In other words, are at fault. It is notoriously difficult to implement.
Critics say the proposals would lead to injustice for landlords
Opponents of the changes, including the National Landlords Association (NLA), insist the plans would create ‘indefinite tenancies’ and cause many landlords to pull out of the lettings market completely.
Experience shows that landlords have little faith in the courts’ ability to handle repossession claims quickly and effectively, irrespective of the strength of a case.
This is underpinned by a survey of NLA members, revealing that those who used Section 8 took an average of 145 days to regain possession. This contrasts with the corresponding averages for Section 21, of 104 days.
There is also evidence that the proposed reforms are an inappropriate solution, with government data suggesting that private tenants live in their rental properties for more than four years on average and that in 90 per cent of cases tenancies are ended by the tenant, rather than the landlord.
Agricultural tenants could be hit especially hard
The proposals could impact agricultural tenants particularly hard, especially those who sub-let farm cottages. Currently, a tenant farmer is often able to sub-let an unoccupied farm cottage, safe in the knowledge that the arrangement could be terminated before the farm tenancy ends.
The problem with the proposed changes is that they would remove the farm tenant’s ability to offer vacant possession at the end of the farm tenancy, if the cottage tenant had a secure tenancy, which would mean risking a claim from the landlord against the farm tenant.
When would the reforms be implemented?
The timing of any changes is unclear, although ministers would have to navigate the legislative process in parliament, which could take many months. Nonetheless, it is widely believed that the government will bring forward legislation at the earliest opportunity.
The good news for landlords is that the changes are unlikely to be retrospective, so existing tenancies will be unaffected.
What we can expect going forwards
Looking ahead, we welcome moves to stop unscrupulous landlords in their tracks, but there is a serious danger that the current Section 8 is not fit to coincide with these new proposals.
The plans will only work if the government overhauls Section 8 to make it easier for landlords to regain possession of a property for genuine reasons.
Alternatively, ministers could add a new piece of legislation allowing landlords to remove a tenant if, for example, they need to sell, renovate or move into the property, because Section 21 is currently the only way of doing this. Surely this has to be a vital addition.