Section 21 and periodic tenancy reforms to take place in one stage

Aiming to reduce confusion when introducing key reforms to the private rental sector (PRS), Labour outlined their plan to implement the ban of Section 21 evictions and the switch to periodic tenancies in one fell swoop.

This information comes from a newly released guide on the gov.uk website, which explains the most relevant reform measures in the Renters’ Rights Act.

The introductory paragraphs of the guide highlights Labour’s core criticism of the PRS:

While the majority of landlords provide a good service, the private rented sector currently provides the least affordable, poorest quality and most insecure housing of all tenures.

…

A functioning private rented sector can provide a secure stepping stone for aspiring homeowners and flexibility for those who want it. But the insecurity embedded in the current tenancy system fails both those tenants looking for a stable home for their families and those landlords who are undercut by the rogues and chancers. It is a drain on aspiration and reform is central to our opportunity mission so all have the chance to achieve their potential.

Ending a “scourge”

The Renters’ Rights Act guide does not explicitly state a date when no-fault evictions will be removed from law, likely to avoid naming any deadlines that cannot definitely be met. It promises that a “separate timeline” document for implementation will be published later.

The ban of no-fault evictions has been a tent-pole policy of Labour since their election. In the ‘Implementation’ segment of the guide, Section 21 evictions are outright labelled a “scourge” that needed to be stopped. 

This phrasing is provocative, considering that previous governments – both Conservative and Labour – have upheld Section 21 since the Housing Act 1988, 37 years ago.

The negative tone of this segment may be disheartening to some, especially when it comes from an official document. While some lip service is paid to good landlords throughout the guide, those who have issued no-fault eviction notices under reasonable circumstances are implicated as problematic, when this is not the case.

Section 8 changes

The guide goes on to say that both Section 21 and “old-style” Section 8 notices will no longer be usable after the ambiguous date.

Section 8 notices can be handed out to renters that have violated the terms of the tenancy. It has never been as versatile as Section 21, due to the more limited scenarios in which it can be used. 

However, the Renters’ Rights Act refines the list of acceptable circumstances in which Section 8 can be used. 

As a slight silver-lining for landlords, Labour have introduced some new Mandatory Grounds for Possession under Section 8.

One that landlords may find use for is Ground 1A, which hinges on a landlord intending to sell a property. They can provide a tenant four months’ notice to vacate the property. 

For this to be valid, however, the tenancy must have started at least one year before the end of the notice period.

The landlord cannot re-let or re-market the property (including for Airbnb or similar short term lets) for a "restricted period", which lasts from the date the notice is served until 12 months after whichever of the following happens later:

1. Four months after the notice is served, or;
2. The date a possession claim is filed in court.

It is not yet known what evidence courts will accept to determine if a landlord has genuine intention to sell their property. It may be entirely up to the judge to decide these outcomes on a case-by-case basis.

No two-tier tumbles

The decision to roll out two major reforms in one stage is justified in the document as a measure to prevent a “confusing two-tier” system.

In other words, once the reforms are finalised, the new rules will be enforced with immediate effect, without any transitionary periods.

Regarding the introduction of periodic tenancies, the guide explains that both new and existing tenancies would be shifted into this system.

Civil penalties

It is important for landlords to understand the fines and penalties that are set to be rolled out for those who fail to comply with the upcoming reforms.

PRS database

Landlords who do not register themselves onto the as-yet unfinished PRS database will lose the right to possession orders, except on ASB (antisocial behaviour) grounds. It will also be illegal for landlords to provide false information.

Landlords found to have repeatedly breached these rules could be fined up to £40,000 or prosecuted.

On the subject of repeat offenders, landlords who have been subject to enforcement action for any wrongdoing will be forced to pay the maximum rent repayment order if they are caught committing the same offence again.

Ombudsman

All private landlords will also be expected to join the ombudsman service. Failures to join this will similarly face a civil penalty of up to £40,000 or criminal prosecution.

Tenants will have the ability to seek rent repayment orders if they can prove that their landlord has refused to join the ombudsman service.

While the guide does not provide landlords with equivalent powers to complain about their tenants, it does state that the government are “exploring options for landlord-initiated mediation for landlords to resolve issued with their tenants.”