The lost enforcement of section 21

Rightly or wrongly, landlords have tended to attach considerable importance to their ability to serve a section 21 notice. This has been used by successive governments, mainly started by the Housing Act 2004 to impose a whole series of additional obligations on the service of a s21 notice.

These include:

• Having a valid HMO or selective licence (where applicable) or at least having applied for one;
• Correctly protecting the tenancy deposit;
• Providing a valid Gas Safety Certificate;
• Providing an EPC;
• Serving the How to Rent Guide;
• Not having an outstanding improvement notice or one not having been served in the last six months.

The effectiveness of this as a means of enforcement is of course debatable but it created a pressure on landlords and did a lot to entrench good behaviour in the sector. To the extent that there are a number of other things which are commonly assumed to be connected to the service of a s21 notice, like a landlord electrical safety certificate, even though they are not in fact connected at all.

All of this is swept away by the Renters’ Rights Act. As s21 has gone so has all the enforcement mechanisms connected with it. To some degree these have been replaced, but not in the same way. So landlords will not now be able to seek possession where they have not:

• Protected the tenancy deposit properly;
• Joined the PRS Landlord Database;
• Joined the PRS Landlord Ombudsman.

However, as I have noted elsewhere, these restrictions do not operate in the same way. They are not blocks on service of a notice, but blocks on the obtaining of a possession order. In principle, a landlord could serve notice, start possession proceedings, and then join the PRS Landlord Database (for example) before a possession hearing. It may be that the provision that allows local authorities to penalise landlords who serve notices or purport to be able to rely on possession grounds without expectation that they will be able to rely on them can be used in these cases but this seems unlikely as the landlord can rely on the grounds, subject to doing something to regularise their position on the way.

There are other enforcement mechanisms. The PRS Landlord Database is likely to require upload of valid certificates and licences to allow registration. However, there is no apparent plan to check these uploaded documents for validity. Presumably it will now be for local authorities to review all this data and identify non-compliant landlords. They do not really have the manpower or funding for such a task.

However, all of the above are not really replacements for the invalidity of a s21 notice. This created an early and powerful element of push back. Tenants, their advisors, local authorities and others could all very quickly push back on a notice at an early stage and raise its invalidity. This gave landlords a powerful incentive to get it right and also to correct mistakes swiftly. It also allowed the position to be resolved while there was still time for everyone to take a step back and consider whether it was necessary to progress. Once a valid notice is served, and especially once court proceedings begin, those options start to narrow very rapidly and the willingness to compromise is much reduced. The process as it stands now also shares the compliance burden across the sector with a number of different parties identifying problems at an early stage.

Going forward, it seems that there will be no specific blocks on serving notice by landlords and, subject to getting the actual notice right, they will always be valid and the issue of improper compliance is unlikely to arise until possession proceedings have started. Many landlords are also more likely to use professional advice as proceedings become more complex and that advice is likely to include not just telling them that there is a problem, but also how to solve it. Having spent the money to get so far landlords are very unlikely to walk back a notice and proceedings, unless they are hopeless, and will sort the compliance out and then proceed to get a possession order. While those properties will then be comply that is of little comfort to the evicted tenant. Having secured possession there is then the question of whether the property will go back on the rental market at all, which is by no means certain.

There is also the fact that many tenants will simply not allow it to go that far and, absent a clear statement that the notice is invalid will just leave the property, regardless of whether the landlord was actually able to enforce the notice served on them.

It is hard to avoid the conclusion that the removal of s21 places a far greater compliance burden on local authorities to police the PRS Database and deal with landlords who are non-compliant. A role that was previously shared across other parts of the sector. This additional workload is one that they are ill-prepared to deal with, given the already severe constraints they face in manpower and budgets. The load being pushed entirely on to local authorities in this way is likely to lead to less compliance, rather than more as the enforcement mechanisms struggle to cope.

David Smith is a partner at Spector Constant & Williams