Housing Act 1988 - the end of section 21 possession and assured shorthold tenanc PDF

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Housing Act 1988 - the end of section 21 possession and..., L. & T. Review 2019,...

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Housing Act 1988 - the end of section 21 possession and assured shorthold tenancies? Kate Symons Andrew Hindle

Journal Article Landlord & Tenant Review L. & T. Review 2019, 23(5), 179-182 Subject Landlord and tenant Other related subjects Civil procedure Keywords Assured shorthold tenancies; Grounds for possession; Possession claims; Possession orders

Legislation cited Housing Act 1988 (c.50) s.8, s.21, Sch.2 *L. & T. Review 179 Hot on the heels of the Government proposals for leasehold reform, the Government has published a Consultation seeking views on implementing its proposals to repeal s.21 of the Housing Act 1988 and improve the possession procedure under s.8 of the Act . This article summarises the main proposals. The Government announced its intention to repeal s.21 in April of this year. The current Consultation: A new deal for renting: Resetting the balance of rights and responsibilities between landlords and tenants (July 2019) expands on the proposed reforms and seeks views on the following proposals:

1• the impact of removing s.21 and, as a consequence, the demise of the assured shorthold tenancy (AST);

1• the reform and use of the existing grounds for possession set out in Schedule 2 to the Act following the removal of s.21;

1• how possession orders under s.8 of the Act may be processed more efficiently. The Consultation closes on 12 October 2019. The proposals for reform are significant, described in the ministerial foreword to the Consultation as being a “generational change to the law that governs much of the rental sector”. A lively consultation period is anticipated, with many landlords likely to be reluctant to see the demise of the AST and the flexibility and control that it affords both landlords and tenants and the loss of the relatively straightforward s.21 possession procedure. © 2019 Thomson Reuters.

Housing Act 1988 - the end of section 21 possession and..., L. & T. Review 2019,...

The impact of removing section 21 ASTs were introduced by the Housing Act 1988 to offer greater flexibility for landlords who wanted to let properties for shorter periods and for tenants who wanted the flexibility of a short term let. The use of an AST currently gives the landlord the ability to end the tenancy, without fault or reason, by giving two months’ notice under s.21 of the 1988 Act, a situation described in the Consultation as leaving tenants “perpetually vulnerable” as such tenancies can be ended on relatively short notice. *L. & T. Review 180 The removal of s.21 would mean that all future tenancies would be assured tenancies (either fixed term tenancies or assured periodic tenancies). A tenant under an assured tenancy may not be evicted unless a landlord can prove one of the grounds set out in Schedule 2 to the Act and, in many of the cases, satisfy the court that it is reasonable to make an order for possession. Under the proposed new framework, there would be a number of potential ways in which a tenancy could be brought to an end: 1• Fixed term tenancy: tenants would be able to end the tenancy at the end of the fixed term (or earlier agreed break date) on giving the landlord notice under the terms of the tenancy. As is the case now, this type of tenancy would roll over into an assured periodic tenancy at the end of the agreed term unless a further new fixed term is agreed; it might be subject to an as yet unspecified minimum fixed term. 1• Assured periodic tenancy: tenants would be able to end the tenancy at any point subject to giving the appropriate notice. This type of tenancy is referred to in the Consultation as an “open ended” tenancy.

1• In either scenario, landlords would be able to end the tenancy by giving notice under s.8 of the Act providing they can show that one of the statutory grounds set out in Schedule 2 to the Act applies. The reforms envisage the statutory protection currently afforded to tenants of ASTs under legislation such as the Deregulation Act 2015 (rent deposits, gas safety certificates and EPCs) and the Tenant Fees Act 2019 (prohibited payments to landlords) being extended to apply to all assured tenancies. However, it is not clear how this will coexist with the grounds for possession and whether a landlord who has not complied with these statutory requirements will be prevented from obtaining possession under Schedule 2 (as is the case with the current s.21 procedure) even where the tenant is at fault.

Reforms to Schedule 2 Schedule 2 to the 1988 Act sets out a number of mandatory grounds (meaning the court must grant the possession order if the landlord can prove the grounds to the court) and a number of discretionary grounds (meaning the court may grant possession order if the grounds are proven). The Consultation acknowledges that many landlords prefer to use the s.21 procedure to obtain possession, even where a tenant is at fault and one of the grounds in Schedule 2 applies, as it is seen as a quick and straightforward process. As a result, the Government intends to review and improve the Schedule 2 grounds to ensure that landlords can obtain possession using the mandatory/discretionary grounds where there is legitimate reason to do so.

No fault grounds for possession The Consultation outlines the following proposed changes: 1• Occupation by the landlord or a family member: widening Ground 1, the mandatory ground that allows a landlord to gain possession if he wishes to use the property as his own home once the fixed term has expired, to include children and family members of the landlord or their spouse or partner (without a requirement that they have lived in the property previously). 1• Sale of the property: creating a new mandatory ground to allow a landlord to obtain © 2019 Thomson Reuters.

Housing Act 1988 - the end of section 21 possession and..., L. & T. Review 2019,...

possession where it intends to sell the property with vacant possession, subject to consideration of the level and nature of proof required to satisfy this ground. *L. & T. Review 181

Other grounds for possession The Consultation also seeks views on the following amendments: 0• Significant rent arrears: re-structuring Ground 8 to allow a landlord to serve a twoweek notice for possession once the tenant is two months in arrears. Possession under Ground 8 would then be mandatory if the tenant has one month or more arrears outstanding at the date of the hearing, or, discretionary if the arrears are under one month at this date. However, if it can be shown that arrears have built up and been paid down on three previous occasions, this must be considered to be a mandatory ground. 0• Breach of tenancy (other than payment of rent): reviewing the effectiveness of Ground 12 to make it easier for a landlord to seek possession following a breach of tenancy agreement. 0• Anti-social behaviour: updating Ground 7A (conviction of a serious offence in or around the property against someone living in or around the property or the landlord). Updating Grounds 14 and 14A (anti-social behaviour and threats of violence) so that Ground 14A applies to all tenancies (not just social housing) with particular focus on protecting the victims of domestic abuse. 0• Neglect of property: amending Ground 13 to allow a landlord to seek possession if the tenant is obstructing the landlord’s ability to keep the property safe as a result of neglect or wilful action. 0• Agricultural holdings: introducing a new mandatory ground for possession relating to dwellings on agricultural holdings, where either the dwelling is sub-let and the head tenant wishes to end its agreement and retire, or there is a business need for the landlord to gain possession.

Possession orders One of the main reasons given by landlords for using the s.21 termination procedure, rather than a specified mandatory or discretionary ground, is that the s.21 procedure allows the landlord to apply for accelerated possession and to have the case decided without a hearing with the landlord’s case and defence dealt with in writing and it is, therefore, a quicker process. Landlords will, therefore, be concerned to see the demise of s.21. This is recognised and addressed by proposals to explore whether the accelerated possession procedure could be extended to applications for possession under s.8 of the 1988 Act, in relation to some or all of the mandatory grounds for possession. There is no consideration of whether human rights issues may arise by extending a documents-only procedure for depriving a person of his home to fault-based grounds; or whether the process of obtaining possession orders could be speeded up by devoting more resources to the civil court system to allow “normal” possession claims under Part 55 to be handled more efficiently.

Short term lettings The Government recognises that the proposals for reform may not be suitable for all tenants, particularly those who intend to occupy for a short time, including holiday lets, transitional lets (where people are moving home but cannot move immediately) and work-related lets (such as a short-term job assignment). Consideration will also be given to whether special provision is required for affordable housing (for example, on build-to-rent developments) where dwellings *L. © 2019 Thomson Reuters.

Housing Act 1988 - the end of section 21 possession and..., L. & T. Review 2019,...

& T. Review 182 are allocated to key workers satisfying eligibility criteria, to enable possession to be obtained where the occupiers are no longer eligible.

Transition period Any new legislation that comes into force following the Consultation will not be retrospective. Landlords will still be able to use a s.21 notice to end an existing AST that continues beyond the date when legislation comes into force and the new regime will apply only to those tenancies granted after the implementation of the new legislation. A six-month transitional period is proposed, to apply from the date of any legislation, to allow landlords time to prepare for any new regime. The Consultation can be viewed at https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/ 819270/A_New_Deal_for_Renting_Resetting_the_Balance_of_Rights_and_Responsibilities_between _Landlords_and_Tenants.pdf?_ga=2.264076172.1292468967.15665716101096580690.1478709442 [Accessed 23 August 2019]. The law is stated as at 14 August 2019. Kate Symons Senior Associate Boodle Hatfield LLP Andrew Hindle Senior Associate Boodle Hatfield LLP

© 2019 Thomson Reuters....