RENTERS (REFORM) BILL – THE END OF NO-FAULT SECTION 21 EVICTIONS?

By John Spence, Partner

Since the introduction of Assured Shorthold Tenancies (ASTs) under the Housing Act 1988, it has been the position that a landlord who needs their property back from their tenant can simply serve a no-faults based Section 21 notice giving the tenant not less than two months’ notice to vacate once the fixed term ends.

The 1988 Act replaced previous legislation that afforded residential tenants security of tenure making it difficult to recover possession. The Renters (Reform) Bill, expected to be made law next year, will see the gradual abolition of ASTs and Section 21 notices, and replaced with Periodic Tenancies, together with many other reforms to our current way of private sector renting.

Many have criticised the current system of fixed term ASTs, which can be terminated by the service of Section 21 notices leaving tenants feeling vulnerable to eviction. However, the fixed term AST system also lacks flexibility for landlords and tenants who can find themselves locked into tenancies that they may no longer want due to changes in circumstances.

ASTs will be gradually replaced by Periodic Tenancies with no fixed terms but instead open-ended month to month tenancies. Tenants will be able to terminate their Periodic Tenancies by serving two months’ notice to quit at any time.

The new law will abolition Section 21 notices leaving landlords only able to end a new Periodic Tenancy, if they can establish one or more grounds for possession under the existing Section 8 of the 1988 Act. However, the current Section 8 grounds of possession will be widened including a new mandatory ground of possession, enabling a landlord to give a tenant four weeks’ notice to end a tenancy, if a tenant has been in at least two months’ rent arrears at least three times in the past three years.

The stated aim of the Renters (Reform) Bill is to create ‘safer, fairer and higher quality homes’ for renters in England. The new law will shake up the whole private rented sector but hopefully landlords and tenants will find the new system will see an overall improvement on what we have today.

If you wish to discuss this further, please do not hesitate to contact John Spence on email: js@cooperburnett.com or tel: 01892 515022.

This blog is not intended as legal advice that can be relied upon and CooperBurnett LLP does not accept any responsibility for the accuracy of its contents.