Changes to Section 21 - How can this work?

[Foss62]

Michael Gove keeps announcing that he will repeal Section 21 - that (as I understand it) is the ‘formal’ way for a landlord to request a tenant to leave under the terms of a ‘normal’ Assured Shorthold Tenancy.
I’m a bit mystified as to what the legal ramifications might be. Undoubtedly there are bad landlords who remove tenants in order to increase the rent or threaten eviction to avoid essential maintenance etc., but equally a landlord might want possession to sell or renovate.
What will the mechanism be to enable a landlord to reclaim property? Will a court have to determine if the landlord has ‘worthy’ reasons for wanting his own property back? What happens if he just tells a good story and does something different afterwards? Why will signed contracts restricting terms to six or twelve months no longer be enough for a landlord to act on?
It seems to me that a better solution would be to better regulate contracts so both tenants and landlords understood exactly what was expected of them regarding finishing dates, and long term rents came with advantages for both parties.

[charltjr]

The proposals were that a LL can only take possession to sell or live in the property, outside of non payment of rent etc

The devil will be in the detail.

[vaud]

charltjr said:

The proposals were that a LL can only take possession to sell or live in the property, outside of non payment of rent etc

The devil will be in the detail.

And good legislation is hard to write, regardless of politics.

[Foss62]

charltjr said:

The proposals were that a LL can only take possession to sell or live in the property, outside of non payment of rent etc

The devil will be in the detail.

Yes, quite. It’s extremely difficult to see how a court could prevent a landlord just changing his mind (or even not being able to sell). Also there might be other good reasons for wanting possession - a new roof or an extension etc.
As before, I can’t understand why this issue is not addressed properly with legally binding contracts of various lengths etc. that would benefit tenants and landlords.

[Louis Balfour]

Foss62 said:

Michael Gove keeps announcing that he will repeal Section 21 - that (as I understand it) is the ‘formal’ way for a landlord to request a tenant to leave under the terms of a ‘normal’ Assured Shorthold Tenancy.
I’m a bit mystified as to what the legal ramifications might be. Undoubtedly there are bad landlords who remove tenants in order to increase the rent or threaten eviction to avoid essential maintenance etc., but equally a landlord might want possession to sell or renovate.
What will the mechanism be to enable a landlord to reclaim property? Will a court have to determine if the landlord has ‘worthy’ reasons for wanting his own property back? What happens if he just tells a good story and does something different afterwards? Why will signed contracts restricting terms to six or twelve months no longer be enough for a landlord to act on?
It seems to me that a better solution would be to better regulate contracts so both tenants and landlords understood exactly what was expected of them regarding finishing dates, and long term rents came with advantages for both parties.

Gove is vicariously desperate, on behalf of his party. He will promise almost anything.

[Simpo Two]

Foss62 said:

What will the mechanism be to enable a landlord to reclaim property? Will a court have to determine if the landlord has ‘worthy’ reasons for wanting his own property back? What happens if he just tells a good story and does something different afterwards? Why will signed contracts restricting terms to six or twelve months no longer be enough for a landlord to act on?

I don't see why it can't be a simple notice period, eg 6 months. Or failing that, whatever is written into the contract. A year, a month, whatever. The contract is what both parties agree to before entering into the deal.

[Aretnap]

Simpo Two said:

I don't see why it can't be a simple notice period, eg 6 months. Or failing that, whatever is written into the contract. A year, a month, whatever. The contract is what both parties agree to before entering into the deal.

The right to put whatever you damn well like in a contract and expect that to be the be all and end all of the law went out at roughly the same time as the dinosaurs. See also employment law, consumer law or any other situation where there tends to be a large imbalance in power between the parties to a contract.

[havoc]

Louis Balfour said:

Gove is as 2-faced as they come. He will promise almost anything and then fail to honour that promise.

EFA

[charltjr]

Foss62 said:

Yes, quite. It’s extremely difficult to see how a court could prevent a landlord just changing his mind (or even not being able to sell). Also there might be other good reasons for wanting possession - a new roof or an extension etc.
As before, I can’t understand why this issue is not addressed properly with legally binding contracts of various lengths etc. that would benefit tenants and landlords.

You won’t be able to turf people out of their home to do work on the property without their agreement or sorting out alternative accommodation, stopping landlords doing things like that is the whole point of the changes.

Short of selling the property or moving back in, tenants can live in the property as long as they want as long as they pay the rent and look after the place.

I’m not against the idea myself, as long as it comes with increased rights for the landlord to quickly evict people who don’t pay or damage the property. Some landlords behave appallingly and if this helps to drive them out of the market, all good.

Enforcement of the rules will be interesting, I’ve no idea how they plan to make that work.

[Simpo Two]

Aretnap said:

Simpo Two said:

I don't see why it can't be a simple notice period, eg 6 months. Or failing that, whatever is written into the contract. A year, a month, whatever. The contract is what both parties agree to before entering into the deal.

The right to put whatever you damn well like in a contract and expect that to be the be all and end all of the law went out at roughly the same time as the dinosaurs. See also employment law, consumer law or any other situation where there tends to be a large imbalance in power between the parties to a contract.

I have the fond idea that if somebody doesn't agree with what they read in a contract they won't sign it. But even if they can't read, you could have a statutory minimum of 6 months. Would that be OK?

[havoc]

Simpo Two said:

Aretnap said:

Simpo Two said:

I don't see why it can't be a simple notice period, eg 6 months. Or failing that, whatever is written into the contract. A year, a month, whatever. The contract is what both parties agree to before entering into the deal.

The right to put whatever you damn well like in a contract and expect that to be the be all and end all of the law went out at roughly the same time as the dinosaurs. See also employment law, consumer law or any other situation where there tends to be a large imbalance in power between the parties to a contract.

I have the fond idea that if somebody doesn't agree with what they read in a contract they won't sign it. But even if they can't read, you could have a statutory minimum of 6 months. Would that be OK?

From a landlord's perspective that could be too long - go back 20 years and a Uni friend had her old home (which became rented out when she moved with work to A'dam) absolutely trashed by some nasty little tenants. Cost her >£20k to fix ~20 years ago...she was devastated...not just the cash but the perceived betrayal and the amount of hassle to fix whilst in another country and dealing with a useless letting agent.

From a tenants perspective, in a competitive housing market with prices only going one way, that could still be devastating...your kids are established at the local school, you can just about afford to live (which is the case for MANY people right now), then you get 6 months notice that your lives are going to be turned upside-down as local rents have gone up 25% since you moved in so you either need to downsize to a shoe-box or move to another town where the kids don't know anyone, the schools are worse, and you've suddenly got a longer commute to try to fit into your lifestyle.


This is yet another example over the last 20 years of "things WOULD be OK regardless...IF everyone behaved decently*, but sadly the UK is increasingly full of people who can't behave decently, so we get more laws."



* I dropped off a set of alloys yesterday for refurb at a recommended place. Asked the chap there for a receipt to say I'd left them - he looked confused for a second, then complied with something hand-written (so clearly not part of his usual procedure) while I get berated by an old Dutchman (who was there to collect) for not trusting the chap.
40 years ago the Dutchman would have been spot on. Nowadays...would you trust an unknown business with £1500 of hard-to-replace asset without a receipt or a contract?

[Foss62]

charltjr said:

You won’t be able to turf people out of their home to do work on the property without their agreement or sorting out alternative accommodation, stopping landlords doing things like that is the whole point of the changes.

Short of selling the property or moving back in, tenants can live in the property as long as they want as long as they pay the rent and look after the place.

I’m not against the idea myself, as long as it comes with increased rights for the landlord to quickly evict people who don’t pay or damage the property. Some landlords behave appallingly and if this helps to drive them out of the market, all good.

Enforcement of the rules will be interesting, I’ve no idea how they plan to make that work.

You are not exactly ‘turfing’ people out of their home. After a year, most contracts turn into rolling periods of 6 or 12 months and it seems logical (at least to me) that both parties would (or should) have an expectation that with reasonable notice from either the agreement could end at the end of any of these periods. If the property is let to students, or someone from abroad on a sabbatical (for example) there would be a certainty of that agreement ending (but I’m not sure landlords are allowed to specify the type of tenants they want?).
This is why I think a better solution would be absolutely fixed contract lengths and an expectation that the tenant might be asked to leave at the end - with benefits for landlords offering longer periods (like, for example, compulsory insurance to compensate for a tenant leaving before the end).

[surveyor]

It will be interesting to see what they do about this.

Tenants have similar protections to this in some form of leases in the commercial world. The case history is established, but things still change from time to time, and it costs many £ with high stakes if landlord and tenant do not agree.

This kind of delay and cost would be disastrous in the residential world.

The government rewrote the legislation in the market I work in 6 years ago. The market is completely broken, but no politician wants to admit it, mucking about with legislation sounds simple, but isn’t.

[S366]

Personally, I think it should all be down to contract lengths, anything outside of that is up for discussion between the LL and tenant, for example, if one has been signed by both parties for 3 years, then as long as the tenant pays their rent and isn’t damaging the property, the LL should not be allowed to kick them out during the contract period, but after the 3 years are up, the LL should have the right to evict(if the tenant wanted a longer tenancy then they should have requested a longer contract).
That being said, I don’t think a LL should be able to request immediate eviction at the end of the term if a renewal hasn’t previously been discussed, they should give 3 month’s notice(which could be 3 months prior to the end of the contract).

[zedstar]

It's another policy to get votes by waging war on the landlord.

2 years ago I tried to get a possession order for a property, it took the 2 month notice period, 2 months for a court date and then he was represented by the 'charity' Shelter who served me with a load of paperwork outside the courtroom and got the eviction stopped because I had made a mistake on a date in the paperwork. Fair enough.

So in the end the tenant paid no rent for 18 months, trashed the house, got visited by the police to be told to stop harassing me with vile abusive text messages from him and his family and then ended up getting evicted by a bailiff.

But i'm the landlord so I must be taking advantage of the poor guy.

I'm actually not too bothered on the S21 change, I think it has merit, but the problem is that it's not being replaced by a workable timely solution.

[NDA]

I was a landlord (2 properties), never again!

I have a good friend with tenants who are currently gaming the system - house has been trashed and they're not paying rent. Section 8 has been issued but the council (who would need to re-home them) have told them to stay put as the 'landlord can't get you out'. It's a nightmare for him.

Another friend was thinking of renting their property out but is now having a re-think as the power is now with the tenant and they might become impossible to shift.

Neither of these people are unscrupulous landlords - just normal people. The net effect of the proposed legislation will be fewer properties to rent - why would you bother?

[Foss62]

NDA said:

I was a landlord (2 properties), never again!

I have a good friend with tenants who are currently gaming the system - house has been trashed and they're not paying rent. Section 8 has been issued but the council (who would need to re-home them) have told them to stay put as the 'landlord can't get you out'. It's a nightmare for him.

Another friend was thinking of renting their property out but is now having a re-think as the power is now with the tenant and they might become impossible to shift.

Neither of these people are unscrupulous landlords - just normal people. The net effect of the proposed legislation will be fewer properties to rent - why would you bother?

It seems to me that there are two sorts of renting:

1. Short term arrangements with little possibility of exploitation either way. For example: student houses, people moving to an area to work with the idea of eventually buying, people working in an area on short term contract or academic sabbatical, groups of young people beginning their careers. Some very rich people also rent for various reasons. Again these sort of arrangements are not particularly problematic.
2. People of limited means who see their rented house as all but permanent accommodation. This sort of arrangement is open to various abuses in both directions.

Losing the first due to legislation/requirements designed to solve problems in the second would be disastrous for all sorts of reasons. I’m always amazed that politicians, charities etc. don’t see this.

[98elise]

It's going to make getting people out for non payment a real pain.

Currently you can serve a Section 8 (for non payment) and a section 21 together. Section 8 is a long drawn out process and very easy for a Landlord to get wrong causing more delays. Even with everything in order it takes many many months. I recently looked at a process diagram of a Section 8 on a legal website and it was many pages long!

If the Section 8 ends up getting drawn out, the Section 21 is still in play. Either way it can be very expensive and frustrating. The last one I did cost me about 10k including lost rent and damages. Add to that 3 months of my time working weekends and evenings.

What will happen is more Landlords will sell up reducing the supply even more. When punitive taxes for landlords were introduced we said the same and were told it wouldn't happen. Exactly that has happened and rents have gone up significantly and it's exceptionally hard for a renter to find property.

There really isn't any upside to being a Landlord these days. Average yields are still only 4-5% even with the recent increases. Profits are subject to punitive taxes, expenses can't be fully offset, and your cash is tied up in an illiquid asset. You can get 5% tax free in an ISA, even more with high yielding funds or shares.

[rgf100]

Scotland already has a no-fault eviction ban and has done for some years. Plenty of info on how it works online. Scroll down here for a list of valid reasons.

https://scotland.shelter.org.uk/housing_advice/evi...

Enforcement probably isn’t perfect, but most people won’t want to break the law and an informed tenant can uphold their rights via a tribunal process.

[NDA]

98elise said:

There really isn't any upside to being a Landlord these days. Average yields are still only 4-5% even with the recent increases. Profits are subject to punitive taxes, expenses can't be fully offset, and your cash is tied up in an illiquid asset. You can get 5% tax free in an ISA, even more with high yielding funds or shares.

You've hit the nail on the head for the majority of landlords.

I'm earning 5.5% on cash at the moment - and no risk.... no legals required to get tenants out, no damaged property etc etc