Loophole means Section 21 Ban Delay “is not what it seems”
A prominent PropTech supplier claims the government’s pledge to delay the ban on Section 21 evictions until court processes have been reviewed and if necessary upgraded, is “not what it seems.”
Goodlord’s Oli Sherlock says: "As the [Renters Reform] Bill currently stands, it seems that the apparent promise to delay the scrapping of Section 21 to allow for court reform is not what it seems.
“Instead, it appears that the market will be delivered a fragmented process which sees some tenancies permitting Section 21, some not, and others that could fall into either camp depending on how a tenancy renewal is handled.
“This would all be taking place alongside an investigation into the courts, which currently has no confirmed timeline or identifiable metrics for success. The deep irony here is that the very same courts will be managing more and more cases deriving from tenancies where section 21 has already been outlawed. Arguably this is the worst outcome for all parties.”
Sherlock, working with Ryan Heaven - a solicitor at Dutton Gregory Solicitors - says there is a loophole in the Bill which means that one type of tenancy, only one of which will still allow for the enforcement of Section 21.
Heaven insists that despite a pledge from Housing Secretary Michael Gove that S21 will have been banned by the time the country goes to the polls in a General Election, it seems highly unlikely that this will prove to be the case.
“A lot of people place emphasise on Michael Gove stating that section 21 would be 'outlawed' before the election, but when you examine the Bill closer this is not what will happen; whenever the election date is there will be some landlords in this country who will still be able to serve a section 21 notice even if it others are not able to” Heaven says.
The three are:
- A new tenancy created after the Bill has been implemented - That means you can't serve a Section 21 notice.
- Any fixed-term tenancy that becomes periodic once the Bill has been implemented - Landlords would still be able to serve a Section 21 notice until the tenancy switches over to a periodic one. However, once that happens, the new rules apply and you can’t serve a section 21.
- Tenancies that are periodic when the Bill is implemented - For these tenancies, landlords will still be able to serve a Section 21 until the Government reviews the Court system, reports on it to parliament, and then sets an ‘extended implementation date’ at which date the new rules all apply to all tenancies. As such, tenancies which fall into this category could be served a Section 21 notice after the election.
The loophole was discussed at a recent PropTech webinar, which you can see a recording of here: https://www.goodlord.co/newsagent/webinars/experts-react-the-renters-reform-bill-third-reading?hsLang=en
