Posts with tag: Section 21

Agents urged to update contract and eviction notices in preparation for Section 21 changes

Published On: January 3, 2020 at 9:18 am

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preparation for Section 21 changes

The Conservative Party is supportive of plans to reform the Housing Act, and, as such, PayProp has pointed out how beneficial it will be to start preparations early.

Updating key documentation and automating arrears management will help for a smoother transition when the big changes are eventually made.

Queen’s Speech confirms Section 21 removal

On 19th December 2019, it was confirmed in the Queen’s Speech that Section 21 will be scrapped in favour of a reformed evictions process.

The plan was at the forefront of the ‘Better Deal for Renters’ section of the Conservative Party’s manifesto. The Party also pledged to strengthen the rights of possession for good landlords through the Renters’ Reform Bill.

Neil Cobbold, Chief Operating Officer of PayProp, says: “For some time, the political will – regardless of party – has been to remove Section 21 from the Housing Act 1988 and reform the eviction system.

“Following the Queen’s Speech, letting agents and landlords need to start preparing for change and updating their processes accordingly as it has been confirmed that the evictions process will be reformed through the same Bill.”

The importance of updating key documents and processes

Cobbold highlights that agents will need to update their contract templates and eviction notices in preparation for Section 21 changes, which is highly likely to revolve around a strengthened Section 8.

He explains: “One of the most important aspects of eviction reform for agents will be educating and informing landlords and tenants about how the new system will work.

“However, on top of this, they will also need to make sure their documents are up-to-date and watertight to evidence their adherence to current and proposed legislation. This will give landlords and tenants the best chance of a smooth eviction process.

“Agents who adopt thorough record-keeping and arrears management can prove their worth to landlords and increase their chances of new business and client retention.

“Having the right technology and systems in place can be a huge help in making these changes seamless and efficient.”

Be proactive about reducing evictions! 

Letting agents should consider ways to reduce the chances of landlords needing to evict their tenants, Cobbold suggests.

He says that by removing Section 21, the methods used by landlords to regain possession of their properties could be impacted. The Government has acknowledged the need to improve the court process, but the reforming of the grounds for possession could have teething problems. Agents have the opportunity to mitigate this by improving their own internal procedures.

Cobbold concludes: “With this in mind, agents need to think about the ways they can help to reduce the frequency of evictions. Encouraging good relationships between landlords and tenants is all-important, as is staying on top of repairs and facilitating good communication between both parties.

“Rent arrears are one of the most common reasons for evictions, so agents can help landlords to keep them to a minimum by sending automated emails and text messages – which are proven to be more effective when it comes to chasing rent payments.

“Using technology and automation will be crucial for agents to stay on top of constantly changing industry regulation and legislation.”

Queen’s Speech: Housing repossession reforms must have support of landlords

Published On: December 20, 2019 at 9:53 am

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Categories: Landlord News

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Housing repossession reforms

The latest Queen’s Speech occurred yesterday (19th December), in which she stated that “new measures will be brought forward to protect tenants and to improve building safety.”

The Residential Landlords Association (RLA) has responded to the speech, stating that ministers need to ensure that landlords support any plans for the reformation of landlords’ rights to repossess rented housing. Otherwise, the market could see a mass sell-off of properties.

The RLA has warned that with the demand for rental housing outstripping demand, the proposals made within the Queen’s Speech to end Section 21 repossessions need a suitable replacement.

We need a system that ensures landlords are confident that they will be able to swiftly and effectively gain repossession of their properties in legitimate circumstances. Without such confidence, the supply crisis in the market will only worsen, making it harder for prospective tenants to find a place to live.   

The association also points out that it has long called for the new framework to provide clear and comprehensive grounds upon which landlords can repossess properties. This includes cases such as anti-social behaviour and tenant rent arrears, with guarantees about the timeframes involved for each. We also need to see measures to prevent abuses by problem tenants.

On top of this, the Government needs to develop a dedicated housing court to ensure that there is easily accessible and swift justice available where there are conflicts between landlords and tenants.

David Smith, Policy Director for the RLA, comments: “We accept the need to protect tenants from abuse but it is crucial that plans to reform the way repossessions can take place are got right if the Government is to avoid a rental housing crisis. 

“Unless the new system is fair to good landlords as well as tenants, those same landlords who we need to support simply will not have the confidence to provide the rented homes that are needed to meet the demand.”

Tory manifesto promises to abolish Section 21

Published On: November 28, 2019 at 10:00 am

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Tory manifesto promises to abolish Section 21

The NLA has slammed the Conservative Part manifesto after it was revealed that they will continue with plans to abolish Section 21 evictions. They believe that the conservatives are not doing enough to support landlords or the private rental sector (PRS) as a whole.

In a move that many see as a positive, Boris Johnson reaffirmed on Monday that his party will bring an end to ‘no-fault evictions’ in an effort to help ‘generation rent’ by empowering them.

However, the NLA has hit back at these proposals, with CEO Richard Lambert saying: “The Conservatives claim that the changes announced in the manifesto will ‘create a fairer rental market’, but fairer for whom? 

“To say that we are disappointed that the Conservatives have pledged to continue with their plan to abolish Section 21 is an understatement. Despite a robust lobbying campaign on behalf of the two million landlords in the UK, the Conservatives seem hell-bent on continuing to punish hardworking and law-abiding landlords.”

The conservatives are also planning to further help renters by introducing the Lifetime Deposit Scheme, which will allow deposits to be transferred from one property to another without leaving them out of pocket whilst waiting to be reimbursed from landlords.

Again, Lambert is sceptical: “We will reserve judgment on the so-called ‘lifetime deposit’. The Conservatives have yet to confirm what this will look like or how this will work in practice.

“The NLA cannot get behind a manifesto that so badly cripples landlords’ ability to run a functioning letting business.”

Will unfair evictions in the private rental sector be reduced by next government?

Published On: November 20, 2019 at 9:47 am

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unfair evictions

We could see homelessness cases reduced by 10% with our next government, according to an analysis by Generation Rent.

By protecting tenants from unfair evictions, this could make a substantial difference to homelessness in the UK.

The findings, based on Ministry of Housing data, also reveal that Boris Johnson and Shadow Chancellor John McDonnell are among the MPs whose constituents face the highest risk of being made homeless by an arbitrary eviction.

Election battleground areas, such as Corby, Milton Keynes, Enfield, and Crawley, are among the worst-affected by homelessness caused by Section 21 evictions.

Tenants in the London Borough of Havering were most at risk of their landlord selling up or reletting, with 39 in every 1000 private renter households being owed a homelessness duty by the council for these reasons in 2018-19. Corby had the second highest rate, with 25 renters in every 1000 facing homelessness.

Tenants in the Prime Minister’s local authority, Hillingdon, were the 6th most at risk of losing their home on no-fault grounds, with 20 in every 1000 private renter households owed a homelessness duty. Shadow Chancellor John McDonnell represents the borough’s other constituency, Hayes & Harlington.

CouncilSize of private renter population (households, 2011)Number of homelessness cases following no-fault evictionNo-fault eviction homelessness rate per 1000 renter householdsKey seats, incumbent party (2017), majority
Corby3,8399525Corby, Conservative, 2,690
Barking & Dagenham12,32829224Dagenham, Labour, 4,652
Crawley6,21413622Crawley, Conservative, 2,457
Hillingdon18,14136920Uxbridge and South Ruislip, Conservative, 5,034Hayes and Harlington, Labour, 18,115
Enfield26,59148418Enfield North, Labour (Change MP Joan Ryan stepping down), 10,247Enfield Southgate, Labour, 4,355
Milton Keynes17,06626816Milton Keynes North, Conservative, 1,975Milton Keynes South, Conservative, 1,725
unfair evictions

The Ministry of Housing, Communities and Local Government has released figures showing that of the 263,720 households that faced homelessness in 2018-2019, just over 10% were being evicted because their landlord was selling up, reletting the property or responding to a complaint by the tenant about disrepair.

Section 21 of the Housing Act 1988 is what makes these ‘no fault’ evictions possible. It allows landlords to take back properties without needing a reason.

The May government pledged to abolish Section 21 and a consultation on the details ended on 12th October. Labour and the Liberal Democrats also support the policy.

Further to this, 5.7% if homelessness cases were the result of rent arrears. Changes to housing benefit in recent years have made it harder for recipients to pay the rent.

A freeze of Local Housing Allowance (LHA) means that tenants can’t cover rent rises and the five-week wait to receive Universal Credit means tenants can easily get behind on their rent payments.

One in four private renters receives housing benefit, but the Bureau of Investigative Journalism has found that just one in 20 private rented homes is affordable to someone receiving housing benefit.

Government action could help tenants in all these situations. Alongside ACORN, London Renters Union, New Economics Foundation, Renters Rights London and Tenants Union UK, Generation Rent has published a Renter Manifesto to encourage parties to adopt policies to improve life for private renters. The policies include:

  • A commitment to end Section 21 evictions and require landlords who evict to sell to pay their tenant’s costs of moving home;
  • Changes to the benefits system so that recipients are able to keep a roof over their head, including linking local housing allowance to 30% of local rents and ending the delay for receiving Universal Credit; and
  • Legally binding guidance on the Equality Act that prohibits discrimination against people receiving benefits.

Dan Wilson Craw, Director of Generation Rent, said: “For private renters, the most common reason for becoming homeless is that your landlord wants to sell or simply re-let the property.

“Landlords don’t have to prove grounds or help you move – it’s left to tenants themselves and councils to cover the costs. In this way, the law prioritises the pursuit of profit over the need for a home.

“The next government would dramatically reduce homelessness by abolishing Section 21 evictions, making landlords foot the tenant’s bill if they want to sell, and making it easier for renters receiving benefits to pay market rents.”

Failing housing courts need urgent reform argues the RLA

Published On: November 15, 2019 at 10:30 am

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Failing housing courts need urgent reform

The Residential Landlords Association (RLA) has noticed new figures that show landlords are facing an increased wait when getting a judgement on repossession cases.

As such, the RLA has stated an urgent need for a dedicated housing court to be established.

The Ministry of Justice’s Mortgage and Landlord Possession Statistics for the third quarter of 2019 show that the average time between claims and repossessions for private landlords was 22.6 weeks. This is up from 22.5 weeks in the first quarter of the year.

The RLA highlights that this is now the third quarterly increase in a row.

This follows the recent warning from Osbornes Law that the proposed abolition of Section 21 of the Housing Act 1988 will likely “risk increasing delays” to claims. 

Responding to the release of these latest statistics, David Smith, Policy Director for the RLA, has commented: “The courts are failing both landlords and tenants. A systematic programme of court closures, coupled with cuts to the court budgets have made it harder for anyone in the private rented sector to get justice in a timely way where something goes wrong.

“With all parties wanting to develop longer tenancies in the rental market, this will only work if landlords can swiftly and easily repossess properties through the court in legitimate circumstances.

“A failure to achieve this will make such tenancies a pipe dream. We are calling on all parties in the election to pledge to establish a dedicated housing court that can bring rapid justice for landlords and tenants.”

Government eviction reforms “risk increasing delays”, warns Osbornes Law

Published On: October 14, 2019 at 9:36 am

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eviction reforms

Government plans to change the law on tenant evictions may not improve tenants’ security, warns London law firm Osbornes Law.

The firm believes that such changes could risk being unworkable in practice. This is in response to a Ministry of Housing, Communities and Local Government (MHCLG) consultation, A New Deal for Renting.

Osbornes Law warns that an increase in factual disputes about the reasons for evictions will strain a court system that is already struggling to cope.

The MHCLG proposes to abolish assured shorthold tenancies so that landlords cannot use Section 21 of the Housing Act 1988 to evict tenants at the end of the fixed-term tenancy without providing a reason or avenue to challenge.

Instead, Section 8 will be used more frequently, being issued to a tenant for either breaching the terms of their tenancy agreement for other reasons, such as the landlord wanting access to the property to sell up or for personal use. The MHCLG also promises faster redress through the courts.

Shilpa Mathuradas, head of property litigation at Osbornes Law, points out that, despite publicity about rogue landlords seeking to evict tenants for no good reason, they represent a tiny minority of property owners.

Research conducted by the Residential Landlord Association (RLA) found that 84% of landlords who had used the Section 21 process did so because of tenant arrears, and 56% because of the damage to property and antisocial behaviour.

She says: “If the process is to be abolished, then landlords need to be assured that a workable system is available to ensure that where landlords rightfully seek possession this is obtained quickly and efficiently without significant cost to landlords, who are often in a position where rent is not being paid where there are ongoing court proceedings.

“If a landlord is rightfully claiming possession based on rent arrears or any other fault of the tenant, this is not going to stop because the Section 21 process is abolished. Landlords will simply pursue the tenants through the more expensive and lengthier Section 8 process. This will not create stability and security for the tenant.”

Her colleague, Alex McMahon, an associate solicitor in the property litigation team, adds that more factual disputes, and the need for courts to resolve them, will be unavoidable as a result of the reforms: “Tenants must be allowed to defend allegations of fault, and to bring a counterclaim if appropriate.

“Judicial scrutiny is the safeguard for both sides, and unsuccessful parties to disputes can expect cost orders to be made against them.

“In my view, the problem with delay is not found in the legal framework but in the overburdened legal infrastructure that applies it. Our courts are now so significantly clogged up with disputes that claims can take many months before they are listed for a first hearing.”