By Debbie Franklin, Director of Tax and property tax specialist
Evictions
The Bill will abolish no-fault evictions (also known as 'Section 21' evictions. Whilst the Bill aims to introduce more comprehensive grounds for repossession and make it easier for landlords to recover their property when the tenants are at fault, many landlords and letting agents are concerned about the impact of these measures.
The Bill will allow landlords to evict tenants in cases of 'anti social' behaviour or if the tenant is in rent arrears. Currently, a 'Section 8' eviction notice would be served on tenants who have broken the terms of the tenancy. The Bill proposes that except in cases of anti social behaviour, such notices cannot be served unless the tenancy deposit is held in accordance with an authorised scheme and 'Prescribed Information' is given to the tenant in the required format, unless the deposit is returned to the tenant.
Landlords and agents are concerned that if an unscrupulous tenant is in rent arrears or has caused damage to the property, the eviction notice will not be issued by the court because of minor errors in paperwork. They fear that the only way of evicting problematic tenants would be to return their deposit. Fears about the potential legal costs involved are widespread.
Ending fixed-term tenancies
The Bill also proposes scrapping fixed-term tenancies by moving to “a simpler tenancy structure where all assured tenancies are periodic”. This is of particular concern to landlords who rent their properties to students.
Such landlords rent properties to students for 12-month fixed term tenancies. Under the proposed rules, if one student decided to stay on in the property, it could block another group moving in. Similarly, if one student vacated a room early, income would be lost for the remainder of the academic year.
With such concerns, there is uncertainty surrounding the number of student properties available at the start of the next academic year; landlords may decide that the proposed rules may make letting to students too onerous.
The National Union of Students has said that students would be an 'underclass' if they were exempt from the reforms.
The government has said it is engaging with both students and landlords.