Buy-to-let landlords have been made increasingly aware that the so-called “no-fault eviction” could be set to see major changes, but plans have been paused for now.
Since Prime Minister announced last week that the next UK general election would be held on 4th July, Parliament has entered the “wash-up” period where any last-minute pieces of legislation can be quickly passed before it is dissolved on 30th May.
One key piece of legislation that has been a focal point of the UK private rented sector and buy-to-let landlords in recent months was the Renters Reform Bill, which has failed to be passed after five years in the making. It was reportedly absent from the list to reach a third reading in the House of Lords before Friday’s deadline.
A particularly significant part of the Renters Reform Bill is the banning of Section 21 no-fault evictions, meaning landlords would no longer be able to evict a tenant without having to give a reason. The fact that this Bill has apparently been shelved has been met with wide criticism from many in the industry.
No-fault evictions and the court system
At present, buy-to-let landlords have two options when evicting tenants – one is issuing a Section 21 “no-fault eviction” notice, where a reason does not have to be given, and the other is issuing a Section 8 eviction notice, which is used specifically for when a tenant breaks their tenancy terms.
However, many landlords have argued that they have opted to use the Section 21 option because Section 8 is reportedly a drawn out and arduous process in the current court system. Therefore, even where tenants have failed to pay their rent, or broken other parts of their agreement, a lot of landlords still use the no-fault eviction.
As part of the Renters Reform Bill, while the Section 21 eviction option was set to be banned, the government had also promised that this would only happen once the court process had been significantly improved. This would alleviate landlords’ worries of having to go through a not-fit-for-purpose court system.
The Bill would also bring in three new grounds where a landlord would still be able to regain possession of their property after the no-fault eviction is removed. These are: if they want to move back into the property themselves, or a family member wants to move in, or they wish to sell the property.
There were also going to be changes to notice periods, as well as the abolishment of fixed term shorthold tenancy agreements, to be replaced with a period or rolling tenancy agreement instead.
“Too much dither” from the government
Unsurprisingly, if the Bill does run out of time to be passed ahead of the dissolution of Parliament – which seems likely at this point – many in the industry will be disappointed. This includes those who fight for the rights of tenants, as well as those who want a fairer system for landlords to encourage a healthy rental sector.
Ben Beadle, chief executive of the National Residential Landlords Association (NRLA) has labelled the news “hugely disappointing”, as the Bill was “in a state which would work for tenants and responsible landlords” after going through a number of amendments.
“There has been too much dither and delay in government, and a failure to be clear about how to ensure changes would work in practice. Critically, the market now faces yet more crippling uncertainty about what the future of the private rented sector looks like,” said Beadle.
“Reforming the sector will be an important issue for the next government and we will work constructively with them to ensure changes are fair and workable. That means empowering tenants to challenge rogue and criminal landlords whilst ensuring the confidence of responsible landlords to stay in the market.”
Sue Edmonds, CEO at Capital Letters, commented: “After months of work, the Renters Reform Bill has been killed by the general election. The next Government must prioritise banning Section 21 no-fault evictions. These are the biggest cause of family homelessness.”
For now, landlords and tenants in the UK’s private rented sector will have to wait and see which political party wins the general election on 4th July, before it will become clear whether any of the proposals in the Renters Reform Bill will come to fruition, including the abolishment of the no-fault eviction.
