What is a Section 21 Notice?

A Section 21 notice is a legal mechanism that allows landlords to evict tenants without providing a reason, commonly known as a 'no fault' eviction. Introduced under the Housing Act 1988, Section 21 was designed to give landlords more flexibility in regaining possession of their properties, as long as they followed the correct notice procedures.

Landlords can issue a Section 21 notice after a fixed-term tenancy ends, or during a periodic tenancy, provided they give tenants at least two months' notice. This notice does not require landlords to prove any breach of the tenancy agreement, making it a straightforward option for regaining control of a property.

What is the Renter’s Rights Bill?

The Renter’s Rights Bill is a proposed piece of legislation that seeks to overhaul the rental sector in England. The most talked-about element is the abolition of Section 21.

The Bill’s aim is to increase tenant security by making it harder for landlords to evict without a specific reason. However, it does not leave landlords without options. The Bill also proposes strengthening other grounds for possession, enabling landlords to take back their property under certain circumstances.

The Renters’ Reform Bill also introduces several other changes to enforcement measures to better regulate the private rented sector. These changes include:

Civil Penalties and Rent Repayment Orders (RROs):

Local councils will now have the power to issue civil penalties to landlords who do not comply with the new regulations, such as failing to register on the Private Rented Sector Database or with the ombudsman, or abusing new possession grounds.

Penalties will range from up to £7,000 for first or minor non-compliance to up to £40,000 for serious or repeat offences. Councils will also have the option to pursue criminal prosecutions with unlimited fines for the most severe cases.

RROs will now be applicable to superior landlords and company directors, holding criminal rent-to-rent arrangements accountable. The maximum rent repayment period has been extended from 12 to 24 months, making RROs more robust and a stronger deterrent.

New duty on councils and enhanced investigatory powers:

Councils will be required to take enforcement action where non-compliance is identified. They will have enhanced investigatory powers, modelled on those available to local trading standards, to obtain financial information from landlords and third parties such as banks and accountants.

These powers include the ability to enter business and, in limited cases, residential premises to gather evidence like email exchanges, text messages, bank statements, and tenancy agreements.

Illegal evictions

For the first time, local councils will be able to issue civil penalties against landlords who illegally evict their tenants, further protecting renters from unjust practices.

Framework for civil penalties

A national framework is being considered for setting civil penalties, based on factors like culpability and harm, to ensure a consistent approach across the country and reduce the likelihood of penalties being reduced on appeal.

Under what circumstances will landlords be able to evict a tenant?

The Bill focuses on amending and expanding the grounds for possession, which are the reasons a landlord can legally evict a tenant. The reasons include:

• Mandatory and discretionary grounds: these grounds will remain, but they will be updated to reflect modern rental practices. For example, landlords will continue to have grounds for possession if tenants are in arrears or have committed serious breaches of the tenancy agreement. These are likely to remain mandatory, meaning that courts must grant possession if the grounds are proven.
• Selling the property or moving in: under the proposed changes, landlords will still be able to regain possession if they intend to sell the property or move in themselves. This gives landlords the flexibility to reclaim their property for personal use, but the process is more structured than under Section 21. Landlords will have to provide evidence of their intent, and tenants must receive appropriate notice periods.
• Persistent rent arrears: the Bill strengthens landlords' rights in cases where tenants consistently fall behind on rent payments. If rent arrears exceed a specific threshold or occur over a prolonged period, landlords will have a clearer pathway to possession.
• Anti-social behaviour and other breaches: the reforms will streamline the process for evicting tenants who engage in anti-social behaviour or otherwise breach the terms of their tenancy. In these cases, landlords can act swiftly to regain possession and minimise disruption to neighbours or other tenants.

Can no-fault evictions still take place?

Yes, for the time being, landlords can still issue 'no fault' evictions under Section 21. However, once the Rent Reform Bill is enacted, this option will no longer be legal. The Bill, which is expected to come into effect in the first half of 2025, will abolish Section 21 notices, meaning landlords will need to rely on specific, legally recognised grounds for possession to evict tenants.

What will landlords have to do to adapt?

To adapt to the proposed Rent Reform Bill, landlords will need to reassess how they manage their properties and interact with tenants. The new legal landscape will require a shift in approach, but with proper planning and adherence to the updated regulations, landlords can continue to operate effectively. Actions may include:

• Update tenancy agreements: with changes to the grounds for possession, you may need to review and revise your tenancy agreements to reflect the new legal framework. Clearly outline tenant responsibilities and potential grounds for eviction within agreements. This will help set expectations from the outset and avoid misunderstandings later.
• Document everything: the abolition of Section 21 means that landlords will need to keep more detailed records of tenant behaviour, rent payments and breaches of tenancy agreements. Should a dispute arise or if eviction becomes necessary, clear documentation will support your case in court.
• Stay informed: landlords will need to stay up-to-date with the final form of the Rent Reform Bill once it passes. Regularly consult legal experts or landlord advice services such as AST Assistance to be sure you're complying with the new rules. Failure to do so could lead to penalties or difficulties in managing your properties effectively.
• Be proactive in addressing issues: the new regulations will place greater emphasis on communication and resolution. Rather than relying on 'no fault' evictions, landlords will need to address tenant issues as they arise, using the available legal grounds for possession when necessary. By being proactive, you can avoid more serious disputes down the line.
• Plan for the long term: the proposed changes reflect a shift towards longer-term tenancies and more stability for tenants. As a landlord, this may require you to rethink how you structure your rental business. For example, planning for longer tenancy periods and focusing on maintaining positive tenant relationships could help you navigate the new landscape more smoothly.

AST Assistance is an expert on everything landlords need to know with regards to managing their tenancies in an efficient, legal way. Contact us today by calling 01706 619954 or filling out our contact form.