AST & Section 21 Abolished

On the 16th of June the white paper; ‘A fairer private rented sector’ was released by the Department for Levelling Up, Housing and Communities. This sets out how the government wants to reshape the private rented sector (PRS) with the goal of delivering a better deal for tenants.

You can read through the 86 page document by following this link, but here is the focus on the new rental agreement system and possession legislation.

The ‘no-fault’ eviction has been a much debated point with a government report stating 97% of tenants want to see it gone with only 14% of landlords wanting it removed. Moving forward a ‘simpler tenancy structure’ will be introduced along with a change in the way possessions are achieved.

The new structure is based on a single system requiring all tenancies to function on a periodic contract, removing all current Assured Shorthold Tenancy (AST) agreements. The date of implementation hasn’t been released but it will happen in 2 steps, where new tenancies will be required to use the new system and 6 months after that implementation all existing tenancies will have to be transitioned.

All claims will have to follow a new set of ‘grounds for possession’, the full list is available on the ‘new deal for renting’ article published on gov.uk. It includes the required notice periods as well which is roughly 2-4 weeks for tenants at fault and 2 months for landlord instigated claims.

With the removal of the section 21 notice landlords needed a new way of reclaiming property when a tenant was not at fault, hence the government have included in their grounds for possession:

• Landlord wishes to move into the property
• Landlord wishes to sell the property
• Landlord wishes to demolish or substantially redevelop the property

The government stresses that legal eviction should be the final course of action, but if it does end up going to court they say:

“...our reformed grounds will be supported by a programme of court reforms to make sure the possession action process is efficient for landlords”

With the current court process suffering from extreme delays due to COVID-19 fuelled backlogs, this will be a much needed change. With many calling for a new court system, something that was rejected in the white paper saying “We don’t think we need a separate housing court”.

This system will require landlords to be even more detailed with their tenancy documents and will likely drive many private landlords to work with letting agents to ensure their properties can pass the new standards set by the Department for Levelling Up, Housing and Communities.