A recent government white paper proposed a number of reforms that would enshrine additional rights for renters into law, and while in some cases these changes are minor, in others they might have a significant impact on how landlords manage their properties.

Perhaps the biggest change is a proposal to outlaw no-fault evictions, which previously involved issuing a Section 21 notice against a tenant. This is one of two mechanisms for evictions, the other of which is a Section 8 notice.

What will the removal of Section 21 mean?

Without Section 21 notices, landlords must be able to give “grounds for eviction” in order to remove a tenant under a Section 8 notice. There is a list of 27 legally valid reasons for carrying out an eviction under these regulations and at least one of these grounds must be met for the procedure to move ahead. The landlord must also give an appropriate amount of notice according to the grounds upon which they are relying, varying from two weeks’ to up to two months’ notice. 

While it is impossible to list all of the potential grounds for evicting a tenant here, they include:

• The landlord wants to move back into the property as their main residence
• The landlord wishes to sell the property
• The landlord wishes to demolish or substantially redevelop the property
• The property has been repossessed by the mortgage lender
• The tenant on the tenancy agreement has died and the current occupant is a tenant heir
• The tenant is in rent arrears - they must have failed to make at least two months’ worth of payments and if they can pay off part of their arrears before a tenancy hearing, the eviction may not be granted
• The tenant has repeatedly failed to pay rent on time
• The tenant has damaged the property or caused it to fall into a state of neglect, or has done so to furniture or other items listed on the property inventory
• The tenant has breached the terms of their tenancy agreement
• The landlord rented the property to the tenant as a condition of the tenant’s employment and this employment has concluded

The list of grounds for eviction is comprehensive enough that the law will still protect landlords against troublesome tenants, while aiming to give these tenants more leeway to resolve any issues amicably. 

However, in cases where the tenant has not committed any offences and has met the requirements of their tenancy agreement it may be more difficult to evict them under the new legislation.

How will this change property investment?

One common strategy for landlords is to buy properties and lease them, using rental income to pay off a mortgage so that they will ultimately own the property, and this is still legal and feasible. However, if your intention is to move into the property once the mortgage is paid, or to sell the property, this is more difficult, as neither of these provides legal grounds to evict any tenants currently occupying the premises.

While a landlord has grounds to evict a tenant in order to move into the property themselves, they must already have lived in the property as their main residence before the tenant moved in, and this would likely not be the case if the property was initially purchased with the intention of leasing it out. In such cases, these are not suitable grounds upon which to carry out an eviction. So, if you are looking to buy a property for the purposes of leasing it, it is important to speak with a legal expert who can help you to plan your options appropriately and understand the legal mechanisms by which you can make this work.

It is hard to predict how the property market will change according to the removal of Section 21, but it is expected that a wave of evictions could precede the law going into effect. It is unclear yet whether the government will introduce mechanisms to deal with this, but it is important that all landlords who are planning to carry out a Section 21 eviction before they are outlawed should speak to a lawyer to ensure they meet all of the necessary requirements to do so and do not risk breaking the law.