With the Renters’ Rights Bill passing through the House of Lords, many residential landlords and tenants face changes in their legal rights and responsibilities. An outline of these proposed changes may be found within this firm’s Mark Taylor’s legal update - ‘Renters' Reform Bill 2024: Key Changes and Implications for Landlords’.
Discussions on public forums and online communities have highlighted ongoing interest in how these reforms will impact landlords, particularly regarding their rights and obligations when seeking possession through the courts. Key discussion areas also include the mandatory grounds for possession and the potential defences available to tenants.
In this article, Jordan Davison and Shelby Gordon of our Commercial and Property Litigation team focus on the procedure that residential landlords must follow to regain possession of their properties under the new proposed rules. Likewise, the team compares the current rules against the new rules as detailed within the Renters’ Rights Bill, more particularly focusing on the abolishment of s.21 and reform of s.8 of the Housing Act 1988.
Will My Tenancy be Affected by the New Rules?
It is important to note that the majority of the changes proposed by the Renters’ Rights Bill will only affect properties situated in England, with the rules remaining largely unchanged for Welsh properties. This article, therefore, focuses on the anticipated changes set to impact tenanted properties in England.
What is the Current Position?
It is presently a legal requirement that landlords must serve a valid notice to succeed with a possession claim before the courts of England and Wales. The process by which this may be affected is facing significant overhaul and all landlords should be aware of the proposed law.
If you are:
- a residential landlord, and
- you will require, or are likely to require, possession of your tenanted property in the immediate future
You should contact the Blanchards Bailey Commercial and Property Litigation team for specialist advice on your current options, as time is critical to follow the current s.21 framework before the new legislation is passed as law.
Currently, a landlord seeking to regain possession of a tenanted residential property must first serve either:
- Notice pursuant to s.21 of the Housing Act 1988 (commonly referred to as a s.21 Notice or “no-fault eviction notice”). Under the existing s.21 framework, landlords may serve notice without providing a reason and by providing the tenant with two months’ notice. If the tenant does not leave the property after the notice period has ended, and providing that the landlord has complied with their statutory obligations dictated by the requirements of the Housing Act, the landlord may then proceed to issue their claim in the court seeking a possession order for the return of the property. The court does not have discretion as to whether or not an order is made so long as the landlord has complied with the rules for serving a valid notice; or
- Notice pursuant to s.8 of the Housing Act 1988 (commonly referred to as a s.8 Notice or “fault-based eviction notice”). Schedule 2 of the Housing Act details a list of grounds upon which a landlord may rely to regain possession of their property, with the most commonly known ground being where the tenant is in arrears of rent. If the tenant fails to vacate the property after the expiry of the notice, the landlord may then proceed to file their claim with the court and must prove the grounds upon which they rely. If the landlord can prove their claim, the court may then grant an order for possession. Depending on whether the landlord relies upon a discretionary ground or a mandatory ground will determine whether the court has the discretion to grant the order sought or is obliged to grant the order. This is detailed further below.
Grounds for Possession Under Schedule 2 of the Housing Act 1988
The grounds upon which tenants may be evicted are either mandatory or discretionary.
Mandatory: the Court must award possession to the landlord if the ground relied upon is proven.
Discretionary: the Court may use its discretion when considering whether a possession order should be granted. This is the case even in instances where the ground relied upon is proven. The Court may still determine that it is unreasonable, in the circumstances, for the landlord to be awarded possession and may make an alternative order as the court sees fit.
An example of this in practice is when a landlord is claiming breach of lease terms other than for the payment of rent. If a tenant has refused to allow the landlord to inspect the property at regular defined intervals, the court may order the landlord to be granted access for inspection rather than granting a possession order.
What Are the Proposed Changes to the Housing Act 1988?
Abolishment of s.21 of the Act
The consequence of this proposed change to legislation is such that landlords may only rely upon the reformed s.8 grounds for possession. It is anticipated that this will likely create further layers of complexity and longer delays in the process of recovering possession of tenanted properties.
Reform of s.8 of the Act
Landlords will no longer be able to rely upon the current grounds, as set out under Schedule 2 of the Act, to obtain possession of their properties. The proposed reform of s.8 will vary the grounds upon which landlords may rely, in addition to extending certain notice periods and providing a protection period to all tenants.
There are several key changes to possession grounds, including extended notice periods and amendments to both mandatory and discretionary grounds. Below are some of the most commonly used grounds, although this is not an exhaustive list:
Mandatory Grounds:
1. |
Where the Landlord Intends on Personally Occupying: Tenants will have an initial 12-month protected period during which landlords cannot evict tenants under this ground. After the expiration of the 12-month protection period, landlords will need to provide 4 months’ notice to their tenants. |
1A. |
Where the Landlord Wishes to Sell Property: There will be a 12-month protected period for a new tenancy and upon expiration, a landlord may then serve 4 months’ notice. |
5C. |
End of Employment Between Tenant and Landlord: Where the tenant works for the landlord under an employment contract (with the property included as part of that employment) and where the employment has come to an end or where the tenancy was not intended to last the duration of the employment and the dwelling is required by a new employee, 2 months’ notice may be given to the tenant. |
6. |
Redevelopment: Where the landlord intents on completing substantial development or where the property is to be demolished, the landlord must provide the tenant with 4 months’ notice. Social landlords will also need to comply with a ground 6A, by providing alternative suitable accommodation. |
8. |
Protection for Tenants Falling into Rent Arears: The Bill includes proposals for there to be a mandatory threshold for eviction from the current 2 months’ arrears to a possible 3 months’ arrears and to increase the notice period for a Section 8 Eviction on this ground from 2 weeks to 4 weeks. |
9. |
The increase may lead to greater financial loss for landlords. As a landlord you may be relying on that income to maintain the property, so this may be an important ground to note. Although landlords can rely on the below discretionary ground with shorter period of notice, relying on the discretionary ground will increase the costs of bringing the case to Court, with the risk that the Court still does not find possession reasonable in the circumstances. |
Discretionary Grounds
10 & 11. |
Any Rent Arrears including Persistent Delay Paying Rent: will require 4weeks’ notice. |
12. |
Tenant in Breach of Tenancy Agreement (Rent Arrears/Delay Not Included): will require 2 weeks’ notice. |
13. |
Tenant Has Caused the Condition of the Property to |
14. |
Anti-Social Behaviour by Tenant, Anyone Living in Property, or Visitors: landlord can start proceedings immediately. |
When Will These Changes Come into Effect?
Although we cannot say with certainty when the Bill will be assented, since the Bill is currently going through Parliament, there will be a one stage implementation of the new rules once the bill received Royal Assent. Therefore, once the bill has been enacted, the new laws will apply to all private tenancies, including existing tenancies, in which existing fixed term tenancies will be converted to periodic tenancies.
How We Can Help
If you are a landlord considering a section 21 evictions, you must act as soon as possible before the proposed Bill becomes law. If you plan to rely on any section 8 grounds for possession in the near future, you should start the process now before the extended notice periods take effect. Our expert Commercial and Property Litigation team headed by Ben Jones is available to provide professional legal advice and guidance.
Please contact Ben, Jordan or any member of our Commercial and Property Litigation team on 01258 459361, or email blandford@blanchardsbailey.co.uk
You can also visit our Property Disputes webpage for more information.
So, how can we help?
Whatever your requirements, our team is standing by.
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01258 459361