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Section 21 Notice and the Renters Reform Bill
Whilst recent memory can hold many radical reforms to the rental landscape, 2021 is set to be no different. As the government looks to inch closer to some sort of pre pandemic sector, not all of the standing legislation looks to return seeing new section 21 notice changes and the renters reform bill.
Current COVID Notice Periods for Landlords
As can be expected with such a globally significant event, unscrupulous in its impact, the COVID-19 pandemic has seen many reforms in renting legislation. These movements have been introduced to provide tenants with additionally security during a time when there income is most susceptible to sporadic change, with millions currently experiencing a heavily reduced income; it could be argued that if the existing system remained mass rent arrears and evictions would have been inevitable. But, with this in mind the UK government intervened with a series of precautionary measures in effect extending the amount of notice a landlord is required to give when issuing a tenant with a section 21 or section 8 notice.
As can be expected even prior to the introduction of The Coronavirus Act 2020 and The Renters Reform Bill, if a landlord was seeking to reclaim possession of their rental property and remove a tenant from the accommodation, they would be prevented from doing so unless adequate notice had been provided. To this end The Coronavirus Act has greatly increased the amount of notice a landlord must provide to a tenant when pursuing the eviction process.
If the owner of the rental issued a notice to the occupants of the property between the 26th of March and the 28th of August 2020, they would have been required to provide the tenants with at least three months’ notice. As mentioned the UK government say periodically looked to support renters in retaining their home whilst providing them with more time to try and manage any potential rent arrears. With this in mind, the notice period that needed to be provided to tenant when issuing them with a notice to reclaim possession of the property was further extended; any notices that were issued between the 29th of August 2020 and the 31st of May 2021 requiring a minimum of six months’ notice in order to be upheld.
Section 21 Notices in 2021
Continuing their support for renters throughout the COVID pandemic the UK government has announced tenants will once again be protected by a longer notice period even after the 31st May 2021. Any section 21 notices that are issued to tenants by their landlord after this date will require the property owner to provide their residents with at least four months’ notice. To the delight of landlords this signals the first move back to normalcy regarding notices, seeing a two month reduction in the amount of notice that must be provided. With this target in mind, the housing minister further declared that any section 21 notices issued after the 1st October 2021 will need to give the tenants at least two months’ notice, the same as pre lockdown.
There are as ever, some caveats to this extension, albeit welcome by landlords looking to remove problem tenants. As has remained throughout the pandemic the court cases for repossession are priorities by the severity of the individual circumstance. This will continue to be the case to ensure that problem tenants are unable to abuse the extended notice period implemented through the Coronavirus Act 2020. Tenants that exhibit antisocial behaviour will only need to be issued with four weeks’ notice when being served with a section 21 notice by their landlord. Additionally if the occupants of the rental property are suspected of domestic abuse, they will only be required to be given between two and four weeks’ notice before court proceedings could commence. Similarly if the tenant has been found to be in violation of their right to rent or in breach of the immigration rules they will only need to be give two weeks’ notice by their landlord. Likewise if the tenant is found to have given a false statement the landlord needs only give between two and four weeks’ notice.
Providing that the tenant has accumulated over four months’ worth of rent arrears and has been unable to come to an agreement regarding a payment plan or reduced rent with their landlord, if a section 21 notice has been served only 4 weeks’ notice is required prior to proceedings. However, from the 1st of August 2021 this notice period in regards to four months of rental arrears will be reduced to only two months.
What Is a Section 21 Notice?
Simply put a section 21 notice is a way in which a landlord is able to recover possession of their rental property from their tenant, providing they have entered into an assured shorthold tenancy. The intricacies of the notice procedure was established in the Housing Act 1988 and has been a contentious issue throughout the renting landscape; seeing many landlords hail the movements ability to gain possession of the property without a lengthy eviction procedure, but with renters condemning the notice as a primary contributor to homelessness.
The section 21 notice has arguably been the preferred method of reclaiming possession of a rental property by landlords, with this largely being attributed to the nature of the notice that allows it to be served to tenants, without the landlord offering any reasoning for doing so. Because of this the section 21 notice is also commonly referred to as the “no fault” eviction, saving landlords having to site the specific grounds under which the tenants have breached the tenancy agreement at a court hearing; simply that the owner wishes to reclaim possession once the agreed upon rental period has come to a close.
With this being said, with the introduction of the Deregulation Act 2015, the circumstance that allow a section 21 notice to be issued by a landlord had been changed, holding rental property more accountable for the their obligations as a landlord. With this in mind, the landlord is required to provide the occupants of the rental property with a series of documentation including the current Energy Performance Certificate alongside the appropriate gas and electrical safety certificates for the property, from the outset of the renal period. Additionally the landlord will be further required to issue their residents with the government’s “How To Rent Guide”, allowing them to be more informed on the renting process, their obligations and where they can turn for support if needed. If the landlord neglects to provide their tenants with any of these documents then a section 21 notice will not be upheld making it far more difficult to reclaim possession of the property. The landlord will also face difficulty successfully issuing a section 21 notice to their tenants if they have failed to address any needed repair work that has been brought to their attention buy the occupants of the rental property.
In an effort to protect tenants from being evicted from the property in unjust circumstance, landlords are also unable to serve their residents with a section 21 notice if they owe an outstanding amount to the tenants that was unlawfully taken, if they are still yet to return the full tenancy deposit amount, providing that no deductions were made, or if the landlord failed to enter the security deposit into a government approved tenancy deposit protection scheme. Similarly, rental property owners are prevented from serving their tenants with a section 21 notice within the first 4 months of the rental period. With this being said if the tenant has just renewed their tenancy agreement with the landlord and have therefore occupied the rental property for more than four months already, then the landlord is able to serve them with such a notice.
It is worth notice that a Section 21 notice does not instantly grant the landlord possession of the rental property once the notice period has expired, rather than court proceedings are about to be pursued. Once this notice period has elapsed the owner of the rental property is given a timeframe of four months in which to commence legal proceedings to reclaim the rental. If they neglect to do so within this window the landlord will need to serve the tenant with a new notice.
The Renting Reform Bill
The government has announced further plans to reform the rental sector, with a paper being published in autumn. Such changes look to make the renting landlord scape for renters and landlord fairer, making private renting more accessible for residents, and secure for both parties. However, this future landscape may be the result of a radical overhaul, with the proposals encapsulating the end of the section 21 notice and lifetime deposits.
Removing Section 21 Notices
As mentioned above a section 21 notice empowers a landlord to reclaim possession of their rental property from a tenant once the agreed upon tenancy period has come to a close. Coming as a delight to tenants that believe the government did not do enough to support those with financial struggles throughout the pandemic, if implemented the renting reform bill will abolish section 21 notices altogether from the Housing Act 1988, forcing landlords to pursue possession of their rental property through the courts.
In an effort to make moving from one rental opportunity to the next easier and more affordable for tenants, the lifetime deposit seeks to overhaul how security deposits are taken from tenants. Whilst any specific legislation is yet to be published, the purpose is to save tenants from having to cautiously save for a new deposit, essentially acting as a financial barrier to their next home. If implemented this would see a single deposit for a tenant be transferred between tenancies, multiple landlords and properties. Of course tenants experience many upfront payments, having to pay a holding deposit, rent in advance and a security deposit can not only be financially overwhelming, but be seriously deterring for many renters leaving landlords to either heavily reduce their letting fees top complete over a shrinking pool of prospective tenants.
The lifetime deposit looks to cover a tenant across simultaneous landlords, meaning that they will be covered under a new landlord, regardless of if there is a dispute with their previous property owner. However, this has been deemed impractical by many but could work if the government were to introduce an interest free loan allowing tenants to meet the required security deposit amount.
Similarly to existing government approved deposit protection schemes the deposit amount would not be physically held by either party involved in the rental agreement. Not only would this move negate a significant amount of disputes regarding the amount that should be returned and wrongfully taken amounts, but make the lifetime deposit more secure, gaining the confidence of landlord and renters. Plans have been pitched to have the functionality of this deposit be similar to a help to buy ISA, with renters being required to meet a certain monetary threshold before being to rent a property. Additionally if a tenant were to surpass this amount they may also have the option of using the accumulated deposit to purchase their first house.
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