Abolition of s21 – Is this as worrying at it seems for landlords?

- Thu 01 Dec 2022

In June of this year the Government released its Fairer Private Rented Sector White Paper which contained a number of proposals. However the one that appears to have grabbed the headline is the proposal to abolish s21 or to use a term bandied around freely by the media, a ‘no fault eviction’ notice.

As a result of the provisions of the Housing Act 1988 landlords have been able to serve a tenant notice to vacate the property without having to stipulate a reason. This is likely to change and it is generally accepted this will be the most significant legislative revision to impact upon the Private Rental Sector (PRS) in decades.

Whilst it seems fair to say most agents and landlords would favour retention of s21, would its abolition be as damaging to landlords as it first appears? Maybe not….

For the majority of PRS landlords their priority is to secure a tenant that pays their rent and cares for the property. As such in most cases, landlords serve a s21 in order to either sell the property or to utilise it for their own occupation or that of their family. The proposals allow for this to continue but rather than securing vacant possession in these circumstances via service of a s21 notice, it would instead be achieved via service of a s8 where the Government plan to strengthen the existing grounds for possession (though the detail of this is unknown at the time of writing).

On a practical level it would seem that the greater impact of the abolition of s21 would be where it is used simply to secure vacant possession of a property in order to re-let the property in question to others. With ‘retaliatory evictions’ now unlawful, this decision might be for a number of reasons relating to the conduct of a tenant or where there have been breaches of a tenancy that are not of a level where they meet the Grounds stipulated in the s8 notice. For example a tenant subject of informal anti-social behaviour complaints from third parties or organisations; a tenant frequently late with their rent; a tenant not looking after a property and all similar or simply, where relations between a landlord or tenant have broken down for whatever reason.

So what measures can a landlord take to reduce exposure to risk? In short, choose your tenant very carefully from the outset. If comprehensive referencing of a potential tenant flags an area of concern, seriously consider withdrawing from the proposed let. By way of illustration, referencing and credit searches may flag adverse or poor credit; issues with affordability based on income; a dependence on a guarantor; property dilapidations and damages declared by a previous landlord to suggest just a few possibilities. Where currently a landlord may choose to extend benevolence and give a tenant ‘the benefit of the doubt’ on the basis the tenancy can be ended with service of a s21 if the tenancy is not conducted satisfactorily, this will no longer be an option unless any of the lawful grounds for possession are satisfied.

We continue to monitor the progress of the Renters Reform White Paper with interest and have the staff expertise to adapt to legislative changes at the appropriate time. If however you have any concerns or queries relating to the proposed changes, please do not hesitate to contact our team whom will be able to advise upon what is known at the present time.