No need for landlords to panic over tenancy reform
If you let out residential property, it is likely that your tenants hold an assured shorthold tenancy, especially if the tenancy was granted after 1997 when the use of ASTs largely became the default for residential lettings.
Under the current regime, landlords can regain possession of their properties at the end of the fixed term (minimum of six months) by serving what is known as a Section 21 notice at least two months before the end of the agreement.
During the fixed term, if the landlord wants to seek possession, a Section 8 notice must be used and the matter will then be put before the courts, who can give possession back to the landlord on several grounds, including non-payment of rent, mortgage repossession, or broken obligations under the agreement, to name but a few.
In the wake of some fairly high-profile evictions and with the rise of the private rented sector post-financial crash, the Secretary of State for Housing, Communities and Local Government has announced plans to reform the Section 21 Eviction Process. This is designed to provide security for tenants but has the potential to create open ended tenancies, with the removal of ‘no fault’ evictions.
This has been met with panic by landlords. But is there reason to be concerned?
In short – no. In most situations, if there is ‘no fault’ and the tenant is meeting the obligations of the tenancy and paying the rent on time, most landlords would be perfectly happy for their property to remain occupied with a regular rent income being received.
If there is an issue with a tenant, Section 8 can still be used, and the Government has assured landlords that this process will be strengthened to support landlords with problem tenants.
In short, under the proposed changes to Section 21, if you have a problem tenant, Section 8 will still be there to act as a mechanism for vacant possession and if the proposals are carried through, the Section 8 process should become more robust from a landlords' perspective.
Good tenants will be protected, bad tenants will not and for most landlords, the above proposals, if they are passed, will have little, to no, impact.
Aidan Greenway, MRICS, Madeleys chartered surveyors
