Jump to content

Simple question!


Recommended Posts

Hi everyone,

I'm just getting started and a lot of things (and questions) go through my mind! One of these questions is, how would the section 21 proposal affect the example below. 

Example

  • I rent out my investment property on a 12 month AST
  • At the end of the fixed term I want to either do some work and rent it out at a higher rent or increase the rent. In the latter case though, the tenant continues to pay his normal rent and/or refuses to pay the increase or move out. 

Is it correct to think that the tenant will need to build up 8 weeks of arrears to use section 8 (mandatory ground)? Am I missing something?

Thanks all. Your help is much appreciated.

Alex

Link to post
  • 4 weeks later...

Hi Alex,

I think I understand what your question is about (but please correct me if I am mistaken). Phrased differently, "If I want to increase my rents, will the (proposed) removal of S21 make it more difficult to do so?"

In your example, the length of the fixed term, and/or the proposed refurbishment make no difference to your situation: you want to increase the rent and are worried about a backlash from the incumbent tenant. Let's unpack your scenario:

At the end of a fixed-term agreement you are able to increase rents as you wish - this creates a new AST under your new terms, ie higher rents. If your current tenant decides not to agree these new terms, they have two options:

1) Move out and end the tenancy amicably (most likely).

2) Not move out, and refuse to pay you the higher rents (less likely); forcing them into arrears.

Under current legislation, you may now issue the tenant a S21 notice, or wait until they are 2 months in arrears and issue them a S8 notice.

So far, no surprises.

Under the proposed changes, you would no longer be able to issue a S21 notice, meaning you would have to wait until the tenant was 2 months in arrears to issue a S8 notice (don't forget: if your tenant pays monthly, in advance, then 1 month and 1 day after they fail to pay you, they are 2 months in arrears). For what it's worth I think this scenario is unlikely, but technically it could happen.

However, I must stress that currently the abolition of "no fault evictions" is only a proposed change and no-one knows quite exactly what it will look like. As yet, no provision has been made for a landlord who wants to sell his/her property; or move back into it. My guess is that with the abolition of S21, there will have to be a complete overhaul of the S8 process. Scenarios just like yours will present themselves in their hundreds, and it is the job of government to ensure that landlords have all the tools at their disposal to property manage and administer their tenancies.

I predict that over the next 12 months we will see Landlord bodies such as the NLA, RLA etc lobbying hard to make sure there are coherent changes to meet the gaping hole left by S21.

Hope that answers your question!

Link to post

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
×
×
  • Create New...