There are two most used methods to obtain possession of residential properties let under an assured shorthold tenancy. Those are, the Section 8 and Section 21 notices as per the Housing Act 1988 (“the Housing Act”). However, under our new government, this is all about to change. The Labour government has promised to abolish Section 21 notices and expand the Section 8 grounds to encompass situations where tenants may not be at fault, but possession is needed for a valid reason (for example, where the landlord wishes to sell the property).
A Section 8 notice is currently usually only served on the basis of breach of tenancy by the tenant, the grounds that may be relied upon when serving a Section 8 notice are set out in Schedule 2 of the Housing Act. Under current legislation, grounds 1 – 8 are mandatory grounds where if satisfied, the Judge must make a possession order. Grounds 9 – 17 are discretionary grounds, where if satisfied, the Judge may make a possession order if they see fit.
The proposed new grounds
The proposed changes are contained within a draft Bill, now called, the Renters Rights Bill (“the Bill”). This is in draft form as it stands, and so what is set out below is by no means guaranteed to be the law ultimately passed, but gives us a good indication of the sort of grounds we can expect to see. Please note that the below is also not an exhaustive list of all amendments proposed within the Bill – but instead sets out the grounds we would expect to see used the most often, if implemented.
Ground 1: occupation by landlord or family (mandatory)
This ground is an amendment to one which already exists under the Housing Act. In its current form, ground 1 allows possession to be recovered where:-
- The landlord has given the tenant written notice of their ability to recover possession on the basis of this ground; and
- At some time before the tenancy, the landlord (or at least one joint landlord) occupied the property as their only or principal home; or
- The landlord (or at least one joint landlord) requires the home as their, their spouse’s, or their civil partner’s only or principal home.
Within the Bill it is proposed that, a section 8 notice may be served, if the tenancy has existed for at least 1 year at the time of service and the landlord who is seeking possession requires the property as the only home of any of the following:-
- The landlord;
- Their spouse or civil partners or a person with whom the landlord lives as if they were married or in a civil partnership;
- Their parents or their spouses/civil partners parent;
- Their grandparent or their spouses/civil partners grandparent;
- Their sibling or their spouses/civil partners sibling;
- Their child or their spouses/civil partners child; or
- Their grandchild or their spouses/civil partners grandchild.
Under the Bill, a relationship of the “half-blood” is to be treated as a relationship of the whole and where there are joint landlords, references to the landlord are to be read as reference to at least one of those joint landlords.
The proposed notice period for this ground is 4 months instead of 2 months as it is currently.
Ground 1A: new ground – sale of a residential property (mandatory)
Ground 1A is a new proposed ground. The new ground provides that possession will be ordered when the landlord seeking possession intends to sell a freehold or leasehold interest in a residential property, or grant a lease of the property for a term certain of more than 21 years which is not terminable before the end of that term by notice given by or to the landlord. To serve a notice under this ground, the following conditions must also be met:-
- The assured tenancy on which the residential property is let is not that of an agricultural tenancy.
- At the date the notice is served, either the current tenancy has existed for at least 1 year or notice of a compulsory acquisition in relation to the residential property has been given and the landlord intends to sell their interest to the acquiring authority, who intend to acquire it.
- The landlord seeking possession is not a non-profit registered provider of social housing, a body registered as a social landlord, a housing trust or where the property is social housing.
The proposed notice period for this ground is 4 months.
Ground 2ZA: new ground – when a superior lease ends (mandatory)
Ground 2ZA is a new proposed ground. Ground 2ZA would be relied upon where the landlord seeking possession holds an interest in the property under a superior tenancy where:-
- The superior landlord has given valid notice to terminate the tenancy as a result of which the superior tenancy will end within the period of 12 months beginning with the date the notice is served; or
- The superior tenancy is a fixed term tenancy of a term certain which will expire (if the tenancy does not end sooner) within 12 months of the date the section 8 notice is served.
This ground would only be available to landlords who (or in the case of joint landlords, at least one of the landlords are):-
- A private registered provider of social housing;
- A tenant of a superior landlord under an agricultural tenancy;
- A person who held the property for the purposes of making it available for supported accommodation; or
- A company of which a local authority owns at least 50% of the issued share capital.
This ground would therefore not assist where a landlord (who does not meet the conditions above) seeks possession due to an obligation to “yield up” a mixed use premises at the end of a commercial lease.
The proposed notice period for this ground is 4 months.
Ground 2ZB: New ground – possession by a superior landlord (mandatory)
Ground 2ZB is a new proposed ground. Ground 2ZB will allow a superior landlord to serve a section 8 notice when they have become the direct landlord by virtue of section 18 of the Housing Act 1988 no more than 6 months before possession proceedings are commenced.
As with ground 2ZA, this ground will only apply where the landlord that granted the tenancy was:-
- A private registered provider of social housing;
- A tenant of a superior landlord under an agricultural tenancy;
- A person who held the property for the purposes of making it available for supported accommodation; or
- A company of which a local authority owns at least 50% of the issued share capital.
This would not assist a landlord (who does not meet the above conditions) who obtains possession of a property subject to legal sub tenancies.
The proposed notice period for this ground is 4 months.
Ground 6A: New ground – possession to allow compliance with enforcement action (mandatory)
Ground 6A is a new proposed ground. Ground 6A would allow a landlord to regain possession where any of the following have occurred:-
- Letting the property causes the landlord to breach or would breach if the property continues to be let, a banning order under section 16 of the Housing and Planning Act 2016.
- An improvement notice under section 11 or 12 of the Housing Act 2004 has been served, which specifies that the property requires remedial action and specifies overcrowding as the deficiency which gives rise to the hazard for which remedial action must be taken.
- A prohibition order under section 20 or 21 of the Housing Act 2004, which prohibits the use of any part of the property or the common parts for purposes that are incompatible with continued use by the tenant.
- The property is a HMO which is required to be licenced under s.61 of the Housing Act 2004 and the local authority refused to grant a licence or the licence has been revoked.
- The property is required to be licenced under s.85 of the Housing Act 2004 and the local authority refused to grant a licence or the licence has been revoked.
This is a fairly unexpected entry from our perspective, however, does seem to intend on bridging a gap where landlords need to make a property safe/obtain relevant licencing.
The proposed notice period for this ground is 4 months.
Ground 8: Amendment to existing ground – rent arrears (mandatory)
This ground is an amendment to one which already exists under the Housing Act. Ground 8 currently allows landlords to recover possession where the tenant is in arrears of more than 2 months’ worth of rent (where rent is paid monthly) or more than 8 weeks’ worth of rent (where rent is paid weekly), both at the date of service of the notice and the date of the possession hearing. The Bill proposes to amend this ground so that landlords may only rely on ground 8 where the tenant is in arrears of at least three months’ worth of rent (where rent is paid monthly) or more than 13 weeks’ worth of rent (where rent is paid weekly), both at the date of service of the notice and the date of the possession hearing.
It is proposed that when calculating the arrears, if the tenant is entitled to receive universal credit for housing under Part 1 of the Welfare Reform Act 2012, any amount that was unpaid only because the tenant had not yet received the payment of that award is to be ignored.
The proposed notice period for this ground is 4 weeks, instead of 2 weeks as it is currently.
Comments
As it stands, the Bill intends to give further protections to tenants, rather than favour landlords. This does mean that landlords could experience some difficulty in recovering possession, after section 21 notices are banned.
Landlords would be wise to take stock of their tenancies and consider whether it would be advantageous to ensure all is in order to be able to serve a section 21 notice before they are banned, if possible.
Our Possession team is available to assist in the preparation and service of any notices. If you do have any questions about the Bill, please do not hesitate to get in touch.
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