The repeal of Section 21 is seen as one of the biggest, most fundamental changes to housing legislation since WW2. Although agents and landlords fear the change, Shelter believes this is a ‘game changer for 11 million private renters and will level the playing field’.
But what does this mean for inventory providers and will the repeal of Section 21 change the balance of evidence needed when it comes to deposit disputes?
A bit of history
Section 21 of the Housing Act 1988, providing for so-called ‘no-fault’ evictions, has seen its share of controversy over the past 30 years.
Governments of left and right shifted the balance of power back and forth between landlords and tenants after the second world war, with Harold Wilson‘s legislative programme of tenant protections dominating from 1964 until 1979.
The Thatcher government’s enthusiasm for deregulation extended to the private rental sector, and it was The Housing Act 1980 which introduced the concept of the shorthold tenancy, granting new rights for landlords to ask the courts to terminate a tenancy. Reform went further with the 1988 Act, which brought into law the Section 21 procedure which has been in place ever since.
Since at least 2014 it has been on the Conservative government’s agenda to repeal Section 21 as part of new reforms designed to reset the balance, and after years of delay the government of Boris Johnson announced in the Queen’s Speech in 2022 that Section 21 eviction notices would be abolished in the new parliamentary session.
These intentions were formalised as long ago as the Renters Reform Bill, drawn up in 2019 to strengthen the rights of tenants. However, judging by the progress of the Tenant Fees Act, this is unlikely to happen for 18 months to 2 years.
Like the divorce rules, the ‘no-fault’ provision was intended to eliminate convoluted court cases and intensive evidence gathering. Unlike divorce, Section 21 could only be invoked by one-party. Tenants were free to terminate a tenancy with the appropriate notice, but that was the only right it afforded to them.
Under the proposed changes landlords will in future be compelled to use Section 8 to evict tenants, a section of the act which requires the landlord to show their reasons for wanting to end a tenancy. This has always been available to landlords but they usually need to demonstrate that the tenant was in breach of a tenancy condition.
One of the changes will be the widening of acceptable grounds for ending a tenancy to include situations such as the landlord wishing to sell or move into the property themselves, although such instances would appear to be in the minority.
The main impact for clients of Inventory Base and other property service providers is the increased importance of evidence gathering.
In the past, landlords tended to use Section 21 in preference to Section 8 precisely because it was easier and needed no extended argument. In the absence of Section 21, they will have little choice but to go down the route of evidence-based action.
Will the repeal of Section 21 create uncertainly or opportunities?
This repeal of Section 21 will clearly affect the status of property inspection reports and what landlords will require inventory clerks to include.
The shift will cause upheaval and uncertainty as the industry adjusts. Landlords will have to ensure that their means of gathering evidence and keeping records are at a standard capable of satisfying Section 8 requirements.
Because the procedure involves the need to make a case to the court, the detail collected by clerks in inventory, check-in, interim and check out reports may be decisive.
A landlord’s legal reasons for evicting a tenant are known as ‘grounds for possession’. The most common reason for serving a Section 8 notice is when the tenant is behind with the payment of rent; this is known as ground 8.
It can be invoked if the tenant has just 2 months’ arrears. The landlord must prove that this level of arrears existed both at the time they served the notice and at the time of the hearing. If they can’t show this the application will fail.
Proof of rent arrears falls outside the jurisdiction of any inventory clerk, who is only concerned with the physical condition of the property, not with any financial arrangements. However, there are other grounds which can be used, specifically 12, 13 and 15.
Ground 12 relates to a breach of the tenancy agreement, which is necessarily very wide. It depends on the terms of the particular agreement, but effectively non-compliance with any term could make a tenant liable.
Why property inspections are crucial
This is certainly an area where a property inspection could be crucial. If there is a specific prohibition on keeping pets or smoking for example, the clerk is ideally placed to uncover evidence of any such breaches.
Ground 13 covers damage to property and ground 15 damage to furniture.
Again, the best intelligence on such issues will be provided by the inventory clerk who not only has the opportunity but also the experience and expertise to identify this kind of damage.
It’s important to gather it in such a form that can’t be effectively disputed in court and for this reason it is vital to maintain an audit trail and records of previous visits so that everything can be cross-referenced.
Balance of evidence
There may be difficulties in proving a general lack of care of the property, but specific examples of breakages or unreasonable levels of wear and tear will be extremely helpful to landlords in making their case. Being able to anticipate and refute the defences put forward by the tenant is essential if a Section 8 eviction is to be granted quickly and simply.
Inventory clerks have a duty to the landlord or client who engages you to fulfil your role thoroughly and accurately, but you do also have a responsibility to the truth especially as courts of law rely on fact.
You will need to resist any pressure from a landlord to embellish evidence to make it favourable to a Section 8 application.
As Inventory professionals are primarily concerned with factual evidence, it seems highly likely that once Section 21 has gone, your skills in evidence-gathering will be in greater demand than ever.
If you need more help, up to date training, advice and guidance visit Inventory Base Academy for more details.