Legal reforms are set to cause headaches for landlords in the private rented sector with responses to the Government’s plans to reform Section 21 ‘no fault’ evictions not being welcomed by the industry or lawyers.
As part of the consultation into proposals from the Ministry of Housing, Communities and Local Government (MHCLG) to end so-called ‘no fault’ evictions landlord groups and legal experts suggests such a move would not only be unhelpful, but also be bad for landlords and tenants.
London firm Osbornes Law has warned that an increase in factual disputes about the reasons for evictions will put strain on a court system that is already struggling to cope and the changes could be unworkable in practice and may not improve tenants’ security.
The MHCLG proposes to abolish assured shorthold tenancies so that landlords cannot use section 21 of the Housing Act 1988 to evict tenants at the end of fixed term tenancy without providing a reason or avenue for challenge.
Instead, it will increase the circumstances under which a Section 8 notice to quit can be issued to a tenant, whether for breaching the terms of their tenancy agreement or other reasons, such as the landlord wanting to sell the property or use it for a family member.
The MHCLG also promises faster redress through the courts. But according to Shilpa Mathuradas, head of property litigation at Osbornes Law, despite publicity about rogue landlords seeking to evict tenants for no good reason, they represent a tiny minority of property owners.
Indeed, research conducted by the Residential Landlord Association found that 84% of landlords who had used the section 21 process did so because of tenant arrears, and 56% because of the damage to property and antisocial behaviour.
In its response to the Government’s consultation on ending Section 21 repossessions, the RLA argues that what is being proposed fails to give any guarantee that landlords would be able to swiftly regain possession of a property where they have a legitimate reason.
It explains that this may be when a tenant has deliberately not been paying rent for several weeks or where tenants are engaging in anti-social behaviour. Many landlords have to rely on the Section 21 powers to retake possession in such cases as the other provisions for doing so involve court action currently taking an average of over 22 weeks.
In the response, the RLA raises concerns that removing Section 21 repossessions will increase the workload on the courts as many more repossession cases would need to be heard by them and this would lead to even longer delays.
It says that the Government has so far provided no proposals to ensure the scale of improvements needed to the court system and adds that the Government’s proposals will make it harder, and in some cases practically impossible, for private landlords to evict anti-social tenants who cause misery for their neighbours and fellow tenants.
Meanwhile, new research has found that there are over 310,000 private rented properties in London that require licensing under mandatory HMO, additional and selective licensing schemes implemented under the Housing Act 2004.
A new report from safeagent conducted by London Property Licensing using Freedom of Information (FOI) requests, reveals that licence applications have been submitted for only 25% of the 138,500 private rented properties that require licensing, a non-compliance rate of 75%. It points out that without a licence application submitted, these properties are being operated illegally, potentially putting tenants at risk.
If they are caught operating an unlicensed property, landlords and their letting or managing agent, can face prosecution and a hefty fine, or a civil penalty of up to £30,000. The landlord can also be ordered to repay up to 12 months’ rent. However, many could be falling foul of the law through ignorance of the complex regulatory framework.
The RLA is also warning that no detailed plans have been made about how to speed up the courts for landlords seeking evictions and argues that what is needed is the development of a new, properly funded housing court to speed up and improve justice for landlords and tenants.
It says that this needs to be matched by a clear commitment to ensure that landlords have to wait no more than 10 weeks between submitting a case for a property to be repossessed to it actually happening.
Ray Clancy
Editor Property Wire
The content of this newsletter is for subscribers and should not be reproduced without permission.
