The abolition of Section 21 eviction notices could lead to a surge in evictions by private landlords anxious to sell before restrictions come into force, la legal practice claims.
The decision to overturn Section 21 of the 1988 Housing Act, which permits landlords to evict tenants without reason and with two months’ notice, was included in the Queen’s Speech last week. A White Paper and a Renters’ Reform Bill are expected to be released by the government shortly to indicate further details and a timetable.
Michael Stock, head of property department at London law firm OGR Stock Denton, says: “There will be many tenants evicted before legislation is passed .We will potentially see panic evictions and a surge in private landlords selling their rental properties.
“Consequently, we’ll see a reduction in properties in the private rental sector, the ripple effect of which will mean more stress on the rental market. It could cripple the sector. I don’t think this has been thought through at all.”
He's calling for more detail about how the law will affect landlords who require a tenant to vacate in order to sell a property.
"Landlords could now be held to ransom by a tenant who refuses to leave after the term of the lease is up. No buyer is going to hang around while the matter progresses through the courts. It’s all very well saying you can’t evict a no-fault tenant but there will be exceptions where a landlord wants to sell” says Stock.
The abolition of Section 21 was initially proposed by former Prime Minister Theresa May in April 2019.
The Conservative manifesto for the General Election later that year - by which time Boris Johnson was Prime Minister - pledged “private landlords will no longer be able to evict tenants from their homes at short notice and without a good reason”.
Stock is appealing for clarity for landlords who have genuine reasons to evict and has raised his concerns with Michael Gove, the Secretary of State for Levelling Up, Housing and Communities
He also predicts some tenants may use the greater protections to obstruct fair rent increases and that some landlords who want to reoccupy their properties or hand them to family could be hampered from doing so.
Stock continues: “I can see an argument for rules that stop unscrupulous landlords coming up with a sham sale or unilaterally putting up rent unreasonably to get a tenant out, but there will also be room for mischief from tenants who can dispute fair rent increases and just staying on where there is a genuine proposed sale, knowing a landlord can’t get their tenants out.”
Even under current rules, tenants can still fight Section 21 notices through the courts, and the process can take many months to evict tenants..
“There is a genuine fear that this is going to have a detrimental impact on landlords and their properties in several genuine scenarios, particularly small investors who have one or two properties and are hoping to sell one to release funds” insists Stock.
“I can’t see any drafting in the proposed legislation to cover such scenarios and it’s a potential own goal that the government is going to score with its traditional supporters.”
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