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  • Property-a-holics

    Scrapping Sec. 21 more deadly than Section 24



    For me, scrapping Section 21 could have an even greater impact than Section 24, particularly if the only alternative, the Section 8 process, is not fully reformed with updated grounds added.

    We have had numerous landlords calling our Landlord Action advice line panicking about this. My prediction is that we will see a surge of small landlords, those with one and two properties, exiting the market or wanting to serve Section 21 notices prior to the new law coming in which. The result? More evictions and more homelessness – the very opposite of what the government was is trying to achieve!

    It may well create opportunities for other landlords to make purchases, but I think that landlords on the whole will be much more diligent in the referencing process, meaning tenants who may previously have been granted a tenancy, could be refused.

    In addition, I worry for tenants in receipt of housing benefit, who will likely be the victims of such a change – and don’t even get me started on Universal Credit!

    Rents are still strong, and people still need somewhere to sleep, but the landscape of buy-to-let has changed significantly in the last 10 years and landlords must adapt.

    Sadly, some are struggling to keep up with the vast number of changes and this could be the final straw to break the camel’s back!

    In theory, having specific Housing Courts would be great, but what about in practice?

    The Ministry of Justice has the smallest budget and does not have any investment. Where would these Housing Courts be situated? How far would a landlord/tenant have to travel?

    Recruitment of Judges is also very challenging, and morale of Judges is at an all-time low according to feedback I received when attending the Housing Court Consultation in Leeds.

    Then we come on to bailiffs. The number of bailiffs has been cut to the bone, they are overworked and under paid, expected to carry out landlord and tenant evictions as well as mortgage repossessions and carry out process serving family papers. It’s impossible for them to try and collect County Court Judgements.

    I do agree with David Smith that the bailiff system needs a total overhaul and they should consider making it private. There is currently a consultation about using High Court Sheriffs.

    When we can obtain leave at court to transfer up to the High Court, it takes us approximately 2 weeks to carry out an eviction rather than 8 to 10 weeks.

    Section 21 forces landlords to be more compliant under the Deregulation Act and knowing that a Section 21 notice cannot be served in the future, forces the landlord to serve an EPC, Gas Safety Certificate, How to Rent Guide, along with protecting the tenant’s deposit, and where applicable a section HMO licence.

    How will this change in the future? It will be interesting to see how it plays out.

    I urge Property Tribes members to complete the Government Consultation into the banning of Section 21’s when it comes out in May/June time – the Government needs to see the impact it will have from the voices of those it will impact.

    If it is going to go ahead, then we all need a say in how it is shaped going forward.

    As landlords, let’s remember all we want is a good tenant, who can pay the rent on time, look after the property and make sure we can have access to carry out inspections.

    Here is a reprise of my interview with Property Tribes when the news was first announced:

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    Founder of Landlord Action and Brand Ambassador for Hamilton Fraser

    Hi Paul,

    You outline that it's the last thing the Government wants, landlords selling up. Though that is stated policy intention, they think we have got too big. We compete with First Time Buyers and they want them to buy up our stock.

    You do make an interesting point, that landlords will increase referencing checks. So putting barriers in the way of some tenants who may not pass. I know you know, we're on about Section 21, in which notice cannot be given in the initial term of at least six months? We will still have section 8 to remove bad tenants, within or out of those initial six months Why would not being able to evict someone for no-fault after six months change how we reference tenants. The six-month tie-in should be enough to ensure we do a thorough check.

    Where we do agree is contributing to the Consultation. I dont believe this complaining will make the government back down.

    We should be highlighting in such Consultation(s) what is needed for landlords. We do need a faster process for Section 8, we need an eviction decision in a hearing to mean an eviction, we need the ability to obtain possession on sale, possession on moving back into the property, possession for renovation, banks need possession on default and so forth.

    Landlords fighting to retain "no-fault evictions" plays into the fallacy. That landlords just evict tenants for no reason. There is always a reason and we need to make sure those are covered in reforms.

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    Since the government has said they will reform Section 8 I think we should wait to see what they propose. No need to worry about something that may not happen.

    From the proposal.

    Under the new framework a landlord will always have to provide a reason for ending a tenancy, such as breach of contract or wanting to sell the property.

    The Government will ensure that landlords continue to have the safeguards they need to operate in the private rented sector with confidence. We are clear that any changes to Section 21 legislation will need to be underpinned by enhanced Section 8 grounds and a simpler, faster process through the courts.

    Landlords need to have confidence that they will be able to regain their property quickly in cases where the tenant has broken the terms of their tenancy agreement or where the landlord has other reasonable grounds. Without these assurances, landlords may be prompted to leave the market, which would not help tenants. We are therefore planning to introduce new Section 8 grounds, in parallel to removing Section 21, to strengthen the rights of landlords to recover their properties when necessary, including when they want to sell or move into the property themselves. The Government will consider limiting the use of these new grounds until the tenancy has lasted for two years to provide tenants with additional security.

    So the question is is 2 years too long? I suspect it might be.

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    The Government will ensure that landlords continue to have the safeguards

    Im not sure Corbyn and co will have the same view if they came to power

    and with the mess the Conservatives have created its possible Labour will come to power

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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.

    Our landlords have been voting on their support of scrapping S21.

    No surprise that it's 450 against scrapping, 50 in support...

    A good point about the amount of money going to the courts. The size of the MoJ budget is probably an overhang from its creation in 2007, being carved out of the existing Home Office. But it seems like adding a new 'housing court' won't achieve anything unless it is funded properly and the Section 8 eviction grounds are expanded and made easier to navigate.

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    The UK's largest letting agent. No admin fees for tenants, first listing free for landlords!

    Proud OpenRenter, reluctant lead tenant.

    We are clear that any changes to Section 21 legislation will need to be underpinned by enhanced Section 8 grounds and a simpler, faster process through the courts. 

    This is what it really boils down to.

    If they sort the eviction process for arrears and anti-social behaviour, then I'd have no problem whatsoever with losing S21.

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    I agree because if the reasons of selling or moving into the property are also considered valid, that would cover all I want.  My, and probably mosts landlords', biggest irritation is the amount of money that is lost whenever a tenant goes bad and stops paying rent.  Suddenly they go from being a tenant that you have a normal workable landlord/tenant relationship with to an absolute nightmare that has effectively kidnapped and is ruining one of your biggest assets and then you feel powerless to do anything and have your own finances wrecked.  I have seen this too many times both personally and with other landlords.

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    Exactly right James.

    My bugbear is this:

    All the vocal people who are supposed to be looking out for landlord interests (I include the NLA and RLA) are focussing on the wrong stuff, in fact you've only got to read this very forum to see it.

    The "noise" coming through is people moaning about S21 being abolished.

    Abolishing S21 is actually very sensible.

    Instead, people should be making noise about improving Section 8 and solving the issues you've mentioned above.

    Positive campaigning instead of negative campaigning.

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