In a recent revelation, commentators have brought to light a potential discrepancy in the Renters (Reform) Bill that could lead to a patchwork system regarding the enforcement of Section 21 notices among landlords. Oli Sherlock, Managing Director of Insurance at Goodlord, and Ryan Heaven, a Solicitor at Dutton Gregory Solicitors, have scrutinized the bill and identified a critical detail that may have significant implications for certain tenancies.
Despite assurances from the housing secretary that Section 21 would be banned before the next General Election, Sherlock and Heaven argue that the reality may not align with this promise. They contend that even after the bill is enacted into law, there will remain a category of landlords who can still serve Section 21 notices, while others cannot.
During a recent webinar, Heaven explained, “A lot of people place emphasis 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.”
The analysis reveals that the bill will establish three broad categories of tenancies:
- New tenancies created after the implementation of the bill: Section 21 notices cannot be served.
- Fixed-term tenancies transitioning to periodic tenancies: Landlords can serve Section 21 notices until the tenancy becomes periodic, at which point the new rules prohibiting Section 21 apply.
- Tenancies already periodic at the bill’s implementation: Landlords can serve Section 21 notices until the Government reviews the court system, reports to parliament, and sets an ‘extended implementation date,’ after which the new rules apply universally.
This means that tenancies falling into the third category could still be served Section 21 notices even after the General Election.
Sherlock remarked, “As the 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.”
The uncertainty surrounding the timeline and criteria for court reform raises concerns about the efficacy of the proposed changes. Moreover, the potential scenario where courts manage cases stemming from tenancies where Section 21 has been outlawed adds complexity to an already convoluted situation, leading to unfavourable outcomes for all parties involved.