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Lettings update: What’s on the horizon in 2020?

The Lettings landscape is constantly changing and 2020 will be no different.

The government announced plans to make changes to the eviction process in April 2019. In July last year, it launched a consultation on the proposed abolition of Section 21.

What is a ‘Section 21’?

In England, a Section 21 is the notice a landlord is required to give to a tenant in order to start the eviction process (under an Assured Shorthold Tenancy).

In order to correctly serve a Section 21 notice and ensure its validity, all tenants must have received the following documents prior to the beginning of the tenancy:

  • A valid Energy Performance Certificate (EPC)
  • A copy of the government’s ‘How to Rent’ guide
  • A valid Gas Safety Record including any renewal (if applicable)

If the landlord has taken a deposit, they must also issue the following documents within 30 days:

  • Deposit protection leaflet
  • Prescribed information relating to how the deposit is protected
  • Deposit certificate proving that the deposit has been registered

If the property is a house in multiple occupation (HMO) and requires a licence, any Section 21 would be invalidated if the property is not correctly licensed.

Under the Deregulation Act 2015, in England Section 21 notices are also be invalid if a local authority has served an enforcement notice following a complaint by the tenant about the condition of the property.

The new proposal

The Government is proposing to remove Assured Shorthold Tenancies (ASTs) from the Housing Act 1988. This would mean only Assured Tenancies would be available to landlords. The proposal also applies to social landlords.

Under the proposal, landlords and tenants would agree either a fixed term assured tenancy for a set period or a periodic assured tenancy. Both tenancies can be renewed at the end of a fixed term if the parties agree or if neither party has given notice to end the agreement. In order to end the agreement, a landlord would need to issue a Section 8 notice.

What is a ‘Section 8’?

To issue a Section 8, a landlord must cite the grounds on which they wish to take their property back. There are multiple grounds under which a Section 8 notice can be served. Some are mandatory grounds, whilst others are at a judge’s discretion. We recommend that landlords only consider using ‘Ground 8’ – a mandatory ground, which can be issued when a tenant is at least two months in arrears. Please see the following guidance from the government: https://www.gov.uk/guidance/gaining-possession-of-a-privately-rented-property-let-on-an-assured-shorthold-tenancy

When will the changes to the eviction process become law?

The abolition of Section 21 is currently in consultation, so any changes would need to be passed by Parliament and approved by the Queen. If passed, it is anticipated any changes would take effect in late 2020 or early 2021.

The Government has indicated that the changes will not be retrospective, therefore any AST still in existence when the law comes into force will continue and will still be able to use Section 21. However, if renewed the AST would have to become an Assured Tenancy.

Under the proposals, tenants will still be able to give notice to bring a tenancy to an end, either at the end of a fixed period or during a periodic tenancy. There is no indication of the notice period changing from the current one month’s notice.

To compensate for the loss of Section 21, the government has proposed improvements to the Section 8 process, including:

  • Introducing a new ground for when a landlord wants to sell their property
  • Widening the current ground for use when a landlord, their spouse or partner or their family want to move into the property
  • Altering the current mandatory ‘Ground 8’ (rent arrears) so that landlords need two months’ arrears on notice and one month’s arrears at the time of the hearing (and that if there are three instances of the tenant paying down and then re-accruing arrears, the ground becomes mandatory)
  • Potentially strengthening antisocial behaviour grounds
  • Making the domestic violence ground available to private landlords and amending it to give the victim more rights and protection
  • Strengthening ‘Ground 13’ to allow landlords to use it if tenants routinely refuse access to the property for repairs/safety checks

The government has also proposed the introduction of an accelerated process for possession (which would remove the need for a court hearing, unless the tenant challenges it) for mandatory grounds. The government has advised they are working to introduce reforms to the court process and are due to respond to calls for a separate housing court to be set up.

The government has also indicated that it wants to include the prescribed information requirements that currently exist via the Deregulation Act for the valid use of Section 21 (e.g. Gas Safety certificate, deposit certificate and information, EPC, How to Rent) in the Section 8 process, to encourage health and safety standards in the sector.

If you’d like to discuss the proposed changes to the eviction process with a member of our Lettings & Property Management team, please call 0113 284 0136 or email lettings@emsleysestateagents.co.uk.

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Helen Jolly

Written by

Helen Jolly

Director (Lettings)

With a BSc in Estate Management, Helen has over 20 years’ experience in residential lettings and property management, from individual houses to property portfolios.

She set up Emsleys Estate Agents’ Lettings Service in 2007 and is responsible for assisting aspiring landlords or those with single or multiple properties to rent.