A fairer private rented sector – the end to no-fault evictions?

Article by Jamie Hughes

A reform of the ‘no-fault’ eviction process has been mooted by the government for some considerable time. Landlords anxiously awaited news of what, if any, process would replace it if this key remedy is taken from them. Meanwhile, tenants awaited news of whether they would be provided greater security against landlords

The current process – The landlord’s backstop

s.21 of the Housing Act 1988 allowed landlords to seek possession of a property which was let on an assured shorthold tenancy on two months notice, either on a contractual break date or following the expiry of the fixed contractual term. Under this procedure, the landlord would not need to point to any particular ground for possession other than the fact the term has expired.

Landlords often viewed this as their backstop security measure for regaining their property when they could not make out any of the other statutory grounds. However, the government and housing charities have long sought greater security for those who rent on a private basis and adhere fully to their own obligations under the tenancy.

The suggested reforms

In the Fairer Private Rented Sector White Paper (16 June 2022) the Government set out a 12-point plan for reforming the private rental sector. Of these, two specifically affect the grounds for possession:

“3. We will deliver our manifesto commitment to abolish Section 21 ‘no fault’ evictions and deliver a simpler, more secure tenancy structure. A tenancy will only end if the tenant ends it or if the landlord has a valid ground for possession, empowering tenants to challenge poor practice and reducing costs associated with unexpected moves.

4. We will reform grounds for possession to make sure that landlords have effective means to gain possession of their properties when necessary. We will expedite landlords’ ability to evict those who disrupt neighbourhoods through antisocial behaviour and introduce new grounds for persistent arrears and sale of the property.”

As part of the abolition of s.21, the government intends to move all tenants who previously had Assured Tenancies or Assured Shorthold Tenancies onto periodic tenancies. It is suggested by the Government that this will “level the playing field between landlord and tenant”. Six months after giving notice, all new tenancies will be periodic and governed by the new rules and twelve months after the notice, all existing tenancies will be converted to periodic.

To balance the removal of section 21, the government has suggested it will strengthen the existing grounds for landlords to seek possession. This will include new grounds for landlords who wish to sell their property or utilise the property for themselves and their close family members. These two new grounds will be prohibited during the first six months of a tenancy, in the same way as s.21 operates.

A new mandatory ground will be created for repeated serious arrears. If a tenant has been in at least two months’ arrears three times within the previous three years, possession will be mandatory, regardless of the balance at the hearing. This will prevent the very common cycle landlord face of arrears increasing and then being cleared shortly before the hearing, often preventing possession if no other grounds can be made out. The notice period for existing mandatory rent arrears ground will also be extended to four weeks.

Landlords v Tenants – Who wins?

The exact structure/content of the intended legislation is currently unknown and will no doubt be scrutinised heavily by both sides of the private rent sector once it is published. It is hoped that the proposed changes will strike a fair balance between the competing interests of landlords and tenants. Whether this can ever be achieved in reality is yet to be seen.