Landlords are advised to fully understand Article 21 before the rental reform changes

“Ultimately, tenants’ interests are best served by a rental market where landlords have the confidence to invest”

Paul Shamplina and PayProp have issued a joint appeal to agents, landlords and tenants to consider how the eviction process could change once the latest reforms proposed by the government are introduced.

In the recent Queen’s Speech, the Government reiterated its commitment to removing ‘no-fault’ eviction notices from Section 21 in the next session of Parliament.

Paul Shamplina, Founder of Landlord Action and Commercial Director of Hamilton Fraser, has joined forces with PayProp to speak out on these issues. On their joint platform are some of the misconceptions surrounding the Section 21 and Section 8 notices, and a look at the future of post-lease reform.

Shamplina said: ‘Right now the vast majority of rentals end because the tenant chooses to leave, not because the landlord is evicting. Landlords want tenants to stay in their property long term and only give notice as a last resort.

“We know from our experience at Landlord Action that the majority of Section 21 notices are issued because a tenant is in arrears with rent or because a landlord wishes to sell or reinstate their property. In many cases, landlords could have used Section 8 for rent arrears or anti-social behavior, but their lack of confidence in the associated legal process, which is undoubtedly longer, is why many still come back to it. section 21.

“Therefore, abolishing section 21 will not significantly change the number of evictions, it will simply change the process, which may impact the number of court cases opened and the associated costs that the tenant will be responsible.”

He argues that section 8 notice and associated grounds will become the norm. Landlords who previously canceled arrears and used Section 21 will now be able to seek those arrears through Section 8, to the detriment of the tenant.

“There are various aspects of Section 8 that require considerable revision before Section 21 can be completely abolished. I think it will take a phased end to give the courts time to clear the backlog of the last two years and for all the grounds to be properly reviewed and revised,” he said.

“For example, the way forward for dealing with abandonment cases needs to be clarified, to avoid unnecessary lawsuits where the tenant has clearly already left the property.”

The importance of collecting evidence and keeping records

According to Neil Cobbold, managing director of PayProp UK, PropTech and automated software in particular have a key role to play in the transition to a Section 21-free rental market.

“Removing section 21 is probably still a long way off, with a white paper and the legislation itself having to go through both houses to get royal assent,” Cobbold said.

This, Cobbold says, gives agents, landlords and renters a chance to prepare for a Section 21-free playground.

Cobbold added: “It is important to note that eviction reform is going to be disruptive and there will be a significant run-in period.

“That’s why it’s extremely important that officers have their evidence-gathering and record-keeping processes in place, so that they can transition as smoothly as possible from the old method to the new, in which officers and owners will likely have to rely on a hardened-up version of section 8.

“Comprehensive, automatically generated reports, based on live transactional information, can make a real difference in providing the relevant evidence when an eviction is needed. The burden of proof for officers will be heavier once Article 21 is dropped. Having to demonstrate proof of arrears, for example, speaks to the need for robust record-keeping and evidence-gathering tools. »

The government also plans to reduce the number of cases going to court by setting up a new ombudsman for private rental sector landlords, helping to ensure that disputes can be easily resolved without legal recourse. Using technology to create an automated record of payments, tenant communications and other tenancy processes will help landlords and agents provide evidence of good conduct when referred to the new mediator by tenants.

Section 21 back on the rise

Recent figures from the Department of Justice revealed that eviction claims from private landlords are now higher than before the pandemic – a fact some have attributed to landlords who filed claims before Section 21 was scrapped. .

Covering the period from January to March 2022, the figures show that there were 6,447 requests for eviction of tenants by private landlords, around 3% more than in the same period in 2019, before Covid hit. struck.

Of these, 6,066 were fast-track applications filed pursuant to a Section 21 notice – some 63% more than last quarter and almost a third (32%) more than in the same quarter in 2019, before the pandemic.

Overall, there were 3,763 landlord evictions, an increase of more than a third (38%) from the previous quarter.

While these numbers aren’t massive, they’re still significant, and the direction of post-pandemic travel is for more eviction requests to be made.

Cobbold concluded: “Section 21, having been virtually unused during the pandemic for obvious reasons, is starting to see more frequent use again. So if and when it is scrapped, it’s likely to have more claims already in progress, making some sort of break-in period all the more vital.

Shamplina added: “Ultimately, tenants’ interests are best served by a rental market where landlords have the confidence to invest, providing tenants with a choice of properties to rent at a competitive price due to a balance between ‘Offer and demand.

“It is essential that the new legislation continues to encourage investment in the market because there is already an imbalance between supply and demand, so any loss of inventory will be negative for tenants.

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