‘Sayonara’ to the infamous Section 21 Notice

The Renters’ Rights Bill, which is expected to pass into law by this summer, brings with it some monumental changes – a significant one being the abolition of the infamous Section 21 Notice (commonly known as a ‘no-fault’ eviction).

Sarah Barratt and Harry Wade from our real estate dispute resolution team provide an insight into the new legislation and break down the impact that the abolition of Section 21 Notices will have on residential property.

A brief background

Abolition of the Section 21 method of recovering possession was a key part of the current government’s manifesto.

Whilst convenient for landlords, there was concern that tenants were getting a ‘raw deal’. These reforms are intended to give tenants greater security in their homes.

Impact of the Renters’ Rights Bill

Once the legislation comes into force, landlords will no longer be able to serve a Section 21 Notice to regain possession of their property.

This applies to all existing tenancies and any new tenancies signed on or after this date, which will automatically become periodic (except for social housing tenancies, which will apply at a later date).

Landlords will instead have to rely on one of the other grounds for possession (which the Renters’ Rights Bill has altered and expanded upon). See our breakdown of these grounds here.

That said, where a landlord has already served a Section 21 Notice before the legislation comes into force, the notice will remain valid provided it has not become time-barred (this being 6 months from the date the tenant was served the notice or 3 months from the commencement date if sooner).

Equally, where possession proceedings have already been initiated based on a Section 21 Notice before the legislation comes into force and the proceedings are still ongoing, the notice will remain valid. 

Consequences

While it is difficult to fully assess the impact that the Renters’ Rights Bill will have until the legislation comes into force, we set out below a list of things we are likely to see:

• A decrease in the number of landlords in the private rented sector meaning increased demand and, therefore, rents for rental properties.
• A surge in landlords serving Section 21 Notices on their tenants to ensure the notice is served before the legislation comes into force Additional strain on the court leading to further delays. 
• An increase in landlords requiring legal services to deal with tenant disputes.
   
  For more information, please contact Sarah Barratt using [email protected] or 0191 211 7923.