Lettings industry experts are warning that they have identified a potential loophole in the Renters (Reform) Bill which could see Section 21 'no-fault' evictions remaining in place.
The warning comes from Oli Sherlock, the managing director of insurance at Goodlord, and Ryan Heaven, a solicitor at Dutton Gregory Solicitors.
They say a loophole in the Bill will create a patchwork system that will see some landlords being able to serve Section 21 notices - while others won't.
The duo say they have carried out a careful analysis and the critical detail could undermine a government pledge to abolish Section 21 before the next General Election.
Apparent promise to delay the scrapping of Section 21
Mr Sherlock said: "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."
He added: "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."
The Bill creates three types of tenancies
The potential problem being highlighted is that the Bill creates three types of tenancies with varying rules:
- New tenancies after the Bill becomes law: These will not allow Section 21 notices to be issued
- Existing fixed-term tenancies becoming periodic: Landlords can use Section 21 until the tenancy becomes periodic - then the new rules apply
- Existing periodic tenancies: Landlords can continue using Section 21 until the government completes a court system review, sets an 'extended implementation date' when the new rules will apply to all tenancies.
Essentially, the loophole means existing periodic tenancies could still be subject to Section 21 evictions after the election.
Section 21 would be 'outlawed' before the election
Mr Heaven said: "A lot of people place emphasis on Michael Gove stating that section 21 would be 'outlawed' before the election, but when you examine the Bill closer this is not what will happen.
"Whenever the election date is there will be some landlords in this country who will still be able to serve a section 21 notice even if it others are not able to."
The issue is that Michael Gove, the housing secretary, recently said he could not guarantee that 'no-fault' evictions would be banned by the next general election.
The promise was first made in 2019, and now Mr Gove says he 'hopes' the Bill becomes law and it's up to the House of Lords to decide on its progress.
'News of a Section 21 loophole'
The managing director of Accommodation for Students, Simon Thompson, said: "News of a Section 21 loophole should come as no surprise to landlords who have been confused since the Bill made its first appearance.
"It is currently in the House of Lords so we still don't know which, if any amendments, will be made.
"We really don't know what the Bill will be like when it is finally passed into law."
He added: "Landlords are waiting for the details but a lot could happen to the Bill.
"Labour has already said that it would ban Section 21 evictions on its first day in power.
"And if this scenario of having three different types of tenancy comes true then landlords and tenants are going to be confused about evictions even more."
