Experts warn of Renters (Reform) Bill eviction loophole

Experts warn of Renters (Reform) Bill eviction loophole

9:44 AM, 14th May 2024, About 2 months ago 24

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Private rented sector experts have identified a loophole in the Renters (Reform) Bill that could lead to a confusing patchwork system for landlords and tenants over evictions.

The Bill, which aims to abolish Section 21 ‘no-fault’ evictions might not deliver on this promise.

That’s according to Oli Sherlock, the managing director of insurance at Goodlord, and Ryan Heaven, a solicitor at Dutton Gregory Solicitors.

Their analysis suggests that despite a pledge from Michael Gove, the housing secretary, to end Section 21 before the next General Election, some landlords could still use it.

Section 21 would be ‘outlawed’ before the election

Mr Heaven said: “A lot of people place emphasis on Michael Gove stating that section 21 would be ‘outlawed’ before the election, but when you examine the Bill closer this is not what will happen.

“Whenever the election date is there will be some landlords in this country who will still be able to serve a section 21 notice even if others are not able to.”

Essentially, the Bill will create three broad tenancy types – and one of them will allow Section 21 enforcement:

  • A new tenancy created after the Bill has been implemented: Landlords won’t be able to serve a Section 21 notice after this date
  • Any fixed-term tenancy that becomes periodic once the Bill has been implemented: Landlords would still be able to serve a Section 21 notice until the tenancy switches over to a periodic one. However, once that happens, the new rules apply, and landlords can’t serve a section 21
  • Tenancies that are periodic when the Bill is implemented: For these tenancies, landlords will still be able to serve a Section 21 until the Government reviews the court system, reports on it to Parliament, and then sets an ‘extended implementation date’ at which point the new rules all apply to all tenancies.

This final scenario will see landlords being able to serve a Section 21 notice after the election.

‘Apparent promise to delay the scrapping of Section 21’

Mr Sherlock said: “As the Bill currently stands, it seems that the apparent promise to delay the scrapping of Section 21 to allow for court reform is not what it seems.

“Instead, it appears that the market will be delivered a fragmented process which sees some tenancies permitting Section 21, some not, and others that could fall into either camp depending on how a tenancy renewal is handled.

He added: “This would all be taking place alongside an investigation into the courts, which currently has no confirmed timeline or identifiable metrics for success.

“The deep irony here is that the very same courts will be managing more and more cases deriving from tenancies where section 21 has already been outlawed.

“Arguably this is the worst outcome for all parties.”


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David Houghton

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20:54 PM, 14th May 2024, About 2 months ago

Reply to the comment left by Reluctant Landlord at 14/05/2024 - 15:19
In such a svenario ticking rent arrears could be harmful. The council put them into breathing space delaying eviction by two months.

davidos

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21:57 PM, 14th May 2024, About 2 months ago

Reply to the comment left by Cider Drinker at 14/05/2024 - 13:32
If S8 works (and works better) then the anti bill narrative can't also want no fault retained. As in it can't be both 'we always keep good tenants long term' and 'but you can't ban S21'.

Although in many cases it's true there's no reason for giving notice, there's also a lot of lying about long term intentions that don't exist. It's not like prospective tenants are in a position to refuse break clauses or 1/2 year fixed that are often insisted on under false pretences.."yeah, yeah, it's long term, they've emigrated abroad....you want a three year fixed....oooo, we don't really do those....really, I didn't even know five years was allowed - our agency never does those'

Reluctant Landlord

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8:43 AM, 15th May 2024, About 2 months ago

Reply to the comment left by David Houghton at 14/05/2024 - 20:54
the mandatory ground on the S8 would top any discretionary ground and so there would be no defence.

I'd just make it clear that the issues of rent arrears/asbo/damage etc had CONTRIBUTED to the reason for the mandatory ground being used. Arrears would not the actual listed reason for the possession - ergo 'breathing space' defence is disregarded.

David Houghton

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8:52 AM, 15th May 2024, About 2 months ago

Reply to the comment left by Reluctant Landlord at 15/05/2024 - 08:43
Well if happens that was try it. I recently evicted using s21. The council applied for breathing space. Which was granted, apparently this had happened several times before. The bailiffs didn't k ow any different, nor did the judge. Whilst I got it overturned by correspondence rather than a formal application it still took a few weeks. For me getting possession is more important than proving a point

Reluctant Landlord

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9:26 AM, 15th May 2024, About 2 months ago

Reply to the comment left by David Houghton at 15/05/2024 - 08:52
Section 21 is not captured by Breathing Space, so proceedings should absolutely continue. Breathing Space is related to debt-relief only and you're not chasing for money.

Found this on Shelter website

My client has a possession hearing coming up. Can they enter a breathing space to stop the judge making a possession order on rent arrears grounds?
Chris says:

The client can enter a breathing space, but it does not prevent a possession order.

When a client enters a breathing space moratorium and there are ongoing legal proceedings, a possession hearing can still go ahead, and the court can make a possession order.

Regulation 10(3) states that action or proceedings may continue, which appears to offer the court discretion. We have heard anecdotally that some courts adjourn proceedings when a client enters a moratorium, so it is always worth asking the court to adjourn if this is necessary. The court can normally ONLY adjourn for rent arrears claims on discretionary grounds, or in mortgage cases.

In other words if possession on S21 then it can still go ahead.

Reluctant Landlord

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9:29 AM, 15th May 2024, About 2 months ago

Reply to the comment left by David Houghton at 15/05/2024 - 08:52
It's not about proving a point but about the law being applied properly to ensure possession when all requirements have been met.

David Houghton

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9:31 AM, 15th May 2024, About 2 months ago

Reply to the comment left by Reluctant Landlord at 15/05/2024 - 09:26
Yes I l know. My local court didn't. They do now. I wasn't the first landlord to have that problem at my local court. I will of course be the last

David Houghton

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9:38 AM, 15th May 2024, About 2 months ago

Reply to the comment left by Reluctant Landlord at 15/05/2024 - 09:29
Yes you are trying to get clarification. There's no need to wait. You can apply for possession order on the basis of nuisance and rent arrears. You can even apply for abridgement of time orders if the nuisance is sufficiently serious. As to whether the eviction can be held up by breathing space when you apply for both is undecided. Or even s 21 with a hearing and claim the rent arrears. Let us know how you get on. Me I will stick to N5b and mcol

Alison Clark

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10:20 AM, 18th May 2024, About 2 months ago

Thank you. I love reading all your replies. To clarify. Fixed term until
May 2025 I can still apply s21 in March 2025!

Duncan Forbes

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20:37 PM, 18th May 2024, About 2 months ago

There is no point in letting residential property in the UK any more to risky, there seems to always a capital gain, but taking in account capital gains tax not accounting for inflation and we all wont live forever so family lumbered with inheritance Tax with a property that quit possibly will have sitting tenants in the future. See Scottish law changes from mandatory to discretionary. And sabre rattling from the Labour government regarding the renters reform act I have sold up after a stressful court case which went to the high court.

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