Will new legislation really get rid of ‘no fault’ evictions?

RENTERS’ REFORM

Will new legislation really get rid of ‘no fault’ evictions?

There was a lot of noise back in 2019 when the Government confirmed its commitment to introduce major reforms for private renters in its first term.

The pandemic was of course, an understandable distraction, but it also served to raise awareness of housing inequality, with its knock on effect on inequality in so many other areas.

Are the reforms for renters about to be retrieved from the long grass into which they were kicked?

Well, it would be an exaggeration to say that changes are imminent, but we do at least have a Government commitment to issue a White Paper to air the issues that might be included in legislation and to seek views on these.  This is promised in the Spring, so we should not have long to wait now.

We won’t therefore speculate about what the White Paper may contain, but we do know that there is a commitment to getting rid of the infamous s.21 (no fault) ground for eviction.  Regardless of the landlord/tenant relationship, s.21 hangs like the sword of Damocles over every private tenant’s head. It thus becomes a huge deterrent to the exercise of any housing rights for those at the bottom end of the market, whether it be challenging an unreasonable rent increase or simply complaining about disrepair. Is it better to have a home you struggle to afford, a home with a leaking roof, or no home at all?

In effect, since s.21 is what distinguishes assured shorthold tenancies from non-shortholds, we assume that, when a Renters’ Reform Act finally comes into effect, the mainstream tenancy will be an Assured Tenancy offering tenants a long-term home.  But let’s not be complacent.

Property lets are a business, and landlords are looking to ensure that business decisions are not impeded by the new (or rather restored[1]) security of tenure tenants will enjoy. One for which s.21 is currently used, is when the landlord wants to put the property on the market.  If sold with vacant possession, the asking price will be higher because more options are available to potential buyers, including of course, those seeking a property to occupy themselves.

However, if landlords can gain possession on the grounds that they wish to sell the tenant’s home, that is, if it becomes another, mandatory ‘no fault’ ground for possession, how can we prevent it from being abused? What is to stop a landlord from putting a property up for sale, and then withdrawing it from the market when they have succeeded in getting rid of their tenant, which they may wish to do for any reason or for none?

For this, and other reasons, Advice for Renters does not believe that the sale of the property should be a possession ground.  However, since landlords have been lobbying hard for it, and the Government is likely to want to include such a ground, here’s how we think it could work in a way that would be fair to both landlords and tenants and avoid abuse by unscrupulous landlords who currently use s.21 as a ground for getting rid of tenants who attempt to exercise their legitimate housing rights by challenging landlord malpractice.

First, it should be a discretionary ground, so possession would not automatically be granted to all landlords wishing to sell, for example, if the tenant had a disability and had benefitted from a Disabled Facilities Grant to adapt their home to their specific needs.

Second, it should be a ‘Notice Ground’, which means that landlords could only use it if they had given the tenant notice before the tenancy agreement was signed, that they may use this ground at some stage during the tenancy.  Exceptionally, the courts could be empowered to waive the notice requirement, if, on conducting a ‘greater hardship’ test, they concluded that the landlord would suffer greater hardship if they could not sell their property with vacant possession, than the tenant would suffer if they were forced to leave.  This would be rare, as the test would exclude consideration of fiscal gain.

The reason for proposing the Notice Ground is simply because those landlords with little interest in providing decent accommodation and a professional approach to tenancy management, would be unlikely to issue the notice at the start of the tenancy, and since they would be the landlords most likely to abuse this ground, they will be prevented from doing so.

Third, we propose the introduction of ‘Suspended Possession’ for this ground.  This is not currently available to the courts in possession action by private landlords, but is fairly common where social landlords seek possession for arrears.  In such cases a Possession Order is granted, but is suspended for as long as the tenant pays the rent and an agreed amount towards the arrears, but can be implemented if the tenant defaults on this condition.

In the case of a Sales ground, the Possession could be suspended until the date that the landlord and the purchaser exchange contracts.  This safeguards the tenant in cases where a sale does not proceed, due to a change of circumstances.  It also has the advantage of minimising the time that properties are left empty, since sales transactions can often be prolonged. It means that the landlord continues to receive a rental income while the property is on the market and during negotiations for the sale. It also means that, if the buyer is acquiring the property in order to let it, they are saved the expense of marketing the letting, and of course, the tenant can remain in their home under the new landlord.

By Jacky Peacock, Head of Policy and Campaigns

[1] The Housing Act 1988 introduced assured and assured shorthold tenancies.  Prior to that, most renters were protected by the Rent Act 1977 which gave full security of tenure as well as a right to a ‘fair rent’.