No-fault evictions allow private landlords to evict tenants from their tenancy agreement without providing a reason.
With the Government now proposing to ban no-fault evictions, landlords would only be able to evict a tenant if they can prove one of the prescribed grounds.
Campaigners who support the reform have argued that the current system is, ‘a major contributor to home insecurity and homelessness among renters in the UK’.
Lee Pearce, Partner and Head of Dispute Resolution at Ellisons Solicitors, who has extensive experience in all forms of landlord and tenant disputes, provides his commentary on the matter.
Impact upon the sector
Under the new system, private landlords will no longer be able to evict tenants at the end of their rental contracts without providing a good legal reason and a longer notice period. Lee Pearce believes the ruling will discourage investment in the private rental sector and the market will shrink as a result. “There will most definitely be a contraction in the private rented sector as an investment class.”
Along with this reduction, landlords may also lose confidence to invest in new homes. Mr. Pearce continues, “The sector may become less attractive if landlords, in appropriate circumstances, cannot rely upon quick and effective means of regaining control of their properties. Whether the mandatory grounds for possession, which is set to ensure the system also works for responsible landlords, letting agents and communities, will answer landlords calls for certainty remains to be seen.”
Unfortunately, despite being heralded as a positive change that will provide renters long-term certainty and protection against unfair evictions, the ruling may continue to allow tenants to suffer. Discussing potential rental spikes, Lee provides the following view, “Local councils already have lengthy waiting lists for social and affordable housing. If the result is fewer properties coming onto the market, then this may actually push rents higher and will ultimately not be a positive result for the rental market.”
Lee believes that the biggest impact may be caused by the slow and often delayed court process. “In a no-fault eviction, a landlord can use an accelerated paper-based procedure which does not involve the under-resourced courts and avoids considerable delays that come with listing a hearing at a county court service.
“With the new proposal, the tenant has the opportunity to attend a hearing and for landlords to evidence the grounds that have been met. However, the Government has said it will seek to expedite the court process which would go a long way to address landlord’s concerns.”
At present if a landlord is looking to sell the property, the ‘no-fault eviction’ process would be used. However, the new proposal states that a new ground will be introduced to ensure landlords are still able to recover possession of the property when they wish to sell their property, move into the property, or allow close family members to move into the property.
Landlords are also to be provided further protection against tenants who are repeatedly in serious rental arrears. Currently, unless a tenant is in two months’ rent arrears at the date of the hearing, the Judge is not required to grant a possession order. The new proposals mean that providing a tenant has been in at least two months’ rent arrears three times within the previous three years, the Judge is required to grant a possession order, no matter what the arrears are at the date of the hearing. This will protect landlords against tenants who repeatedly get into arrears but stay below the current two-month threshold.
With the new proposal, the notice period will also be reduced where the tenant is involved in criminal behaviour or serious antisocial behaviour, but will be increased for rental arrears grounds.
If you require further information or assistance, please contact Lee Pearce here.