news | 2 weeks ago | Andreea Dulgheru

Section 21 loophole will create a patchwork system, warn lettings experts

Lettings experts from Goodlord and Dutton Gregory Solicitors have identified a loophole in the Renters Reform Bill, which threatens to create a “patchwork system” in relation to section 21 evictions.

According to Goodlord’s managing director of insurance Oli Sherlock, and Dutton Gregory’s solicitor Ryan Heaven, some landlords will be able to continue serving section 21 notices even after these types of evictions will be banned.

Instead, the bill passing into law will usher in a new phase where three broad tenancy types exist, one of which will still allow for the enforcement of section 21:

  • a new tenancy created after the bill has been implemented — section 21 notices cannot be served for this type
  • any fixed-term tenancy that becomes periodic once the bill has been implemented — for this type, landlords would still be able to serve a section 21 notice until the tenancy switches over to a periodic one, after which landlords can no longer service section 21 notices
  • tenancies that are periodic when the bill is implemented — for this type of tenancy, landlords will still be able to serve a section 21 notice until the government reviews the court system, reports on it to Parliament, and sets an extended implementation date, at which date the ban will apply to all tenancies

"As the bill currently stands, it seems that the apparent promise to delay the scrapping of section 21 to allow for court reform is not what it seems— instead, it appears that the market will be delivered a fragmented process which sees some tenancies permitting section 21, some not, and others that could fall into either camp depending on how a tenancy renewal is handled,” said Oli.

“This would all be taking place alongside an investigation into the courts, which currently has no confirmed timeline or identifiable metrics for success. 

“The deep irony here is that the very same courts will be managing more and more cases deriving from tenancies where section 21 has already been outlawed — arguably this is the worst outcome for all parties.”

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