20/11/2024
Our previous article on the Renters’ Rights Bill considered some of the impacts on the supported housing sector.
This article sets out a useful reminder of the grounds for possession most frequently used by landlords, and in particular, Registered Providers of Social Housing (RP), with the changes proposed to them in the Bill and how this will impact RP if the Bill is adopted in the same terms as currently proposed.
Reform of possession grounds
The explanatory notes accompanying the Renters’ Rights Bill states the reforms are to make sure tenants have greater security in their homes but that landlords can regain a property when necessary. This of course remains important, particularly to RPs who need the ability to manage their housing stock according to need and demand.
The main ‘headline’ change in respect of possession is of course the removal of Section 21 notices along with the accelerated possession procedure which will mean starter tenancy policies used by many RPs will no longer be valid.
As well as this key change, there are other proposed amendments that Registered Providers need to be aware of. As well as new grounds and amendments to existing grounds, the bill specifies revised notice periods for the grounds which will need to be adhered to in order to successfully obtain possession.
The Bill also introduces penalties for misuse of the grounds, therefore it will be essential for landlords to ensure there is sufficient evidence to seek possession on the grounds relied upon.
The most commonly used grounds by RPs which are subject to amendment under the Bill are:
· Ground 7A (mandatory ground) the bill reduces the notice period so landlords will be able to issue a claim under this ground immediately.
· Ground 8 (mandatory ground) the bill introduces a requirement for rent arrears of at least 13 weeks (or 3 months if rent paid monthly) both when the notice is served and at the date of the possession hearing. The notice period before proceedings can be issued will also increase to 4 weeks. The bill also provides that if the rent arrears are as a result of Universal Credit payment delays then there cannot be an eviction under this ground.
· Ground 10 and 11 (discretionary grounds) the notice period before proceedings can commence will increase to 4 weeks.
· Ground 14 (discretionary grounds) whilst the notice requirements remain unchanged, the Bill introduces further matters the Court must specifically consider when deciding whether to make an Order for Possession under this ground. The Court will need to determine whether the person against whom possession is sought has engaged with attempts by the landlord to resolve the behaviour. The Court must also give particular consideration to the impact of anti-social behaviour on fellow tenants in HMOs who share facilities or accommodation with the perpetrator.
The below table is a quick look guide to the changes for the existing mandatory possession grounds and the notice period required to rely on the ground:
|
Existing Mandatory Grounds amended by the Bill |
Notice |
|
Ground 1: Occupation by landlord or family - landlord requires possession to occupy as only or principal home for themselves or number of family members. This cannot be used in the first 12 months of a tenancy and the landlord cannot re-market or re-let the property for 12 months after the notice, or the date of the possession claim. |
4 Months |
|
Ground 2: sale by mortgage - the amendments remove the requirement that the mortgage was entered into before the beginning of the tenancy, meaning that a lender is able to take possession where vacant possession is required. |
4 Months |
|
Ground 4: student accommodation - In 12 months before property was used by students – only used by higher education providers. |
2 weeks |
|
Ground 6: redevelopment - there have been substantial amendments to this ground. It has moved away from there simply being an intention by the landlord to carry out substantial works which cannot be done with the tenant in situ, to there being strict criteria, depending on the landlord, and circumstances surrounding this. This ground cannot be used within the first 6 months of the tenancy and requires a 4 month notice. |
4 months |
|
Ground 7: death of tenant - amendments predominately just to remove the reference to a ‘periodic’ tenancy. |
2 months |
|
Ground 7A - serious ASB/criminal behaviour– possession can begin immediately |
Proceedings can commence immediately - (order cannot be made until at least 14 days has passed since notice being served) |
|
Ground 7B: No right to rent - At least one of the tenants has no right to rent under immigration law as a result of their immigration status and the Secretary of State has given notice to the landlord of this |
2 weeks |
|
Ground 8: rent arrears - Landlords will be able to rely on this ground where there are at least 13 weeks, or 3 months (if rent is payable monthly). |
4 weeks |
The below table is a quick guide to the new grounds introduced by the Bill:
|
New Grounds |
Discretionary/ Mandatory |
Notice period |
|
Ground 1A: sale of dwelling house - landlord intends to sell, or grant a lease for a term certain or no more than 21 years. Tenancy must have begun one year before the relevant date and cannot be used in the first 12 months of the tenancy. Landlords will be required to provide a 4 month notice and cannot re-market or re-let the property for 12 months after; the notice, or the date of the possession claim. This is a mandatory ground for possession. This is not to be used in respect of Registered Providers of social housing |
M |
4 Months |
|
Ground 1B: Social Housing Rent to Buy - landlord is a Registered Provider and there is a rent-to-buy agreement |
M |
4 Months |
|
Ground 2ZA: end of superior lease - when the landlord’s lease terminated by superior landlord. This ground can only be used by Registered Providers, agricultural landlords, supported accommodation or company majority owned by Local Authority. |
M |
4 Months |
|
Ground 2ZB: possession when superior lease ends - this enables a landlord to seek possession where they hold only an interest in the dwelling house under a superior tenancy (which is a fixed term tenancy of a term certain of more than 21 years) – and the fixed term will expire (if the tenancy does not come to an end earlier) within the 12 monthly beginning with the relevant date, or if the superior tenancy has continued following the expiry of the fixed term any party to the superior tenancy has served a valid notice to terminate that tenancy as a result of which the superior tenancy will end within the period of 12 months beginning with the relevant date. This is a mandatory ground for possession. |
M |
4 Months |
|
Ground 2ZC: Possession by superior landlord - after superior tenancy ends, superior landlord becomes tenants direct landlord and seeks possession. This ground can only be used by Registered Providers, agricultural landlords, supported accommodation or company majority owned by Local Authority. |
M |
4 Months |
|
Ground 2ZD: possession by superior landlord - After a superior tenancy ends, the superior landlord becomes the tenant’s direct landlord and seeks to take possession. This can only be used where the superior lease was for a fixed period of over 21 years and has expired, or within a 12 month period of the fixed term expiry date, if the fixed term has been ended early. Or if the superior tenancy comes to an end after the expiry of the fixed term as a result of a valid notice. This is a mandatory ground for possession. |
M |
4 Months |
|
Ground 4A: possession of student accommodation - HMO to full time students at end of academic year (notice must be within 1 June to 30 September) |
M |
4 Months |
|
Ground 5B: employment criteria - Social landlord requires property to let to someone based on employment eligibility (key workers) |
M |
2 months |
|
Ground 5C: this is the current ground 16 which is renumbered and to be a mandatory ground for possession - this relates to properties which are let to the tenant in consequence of the tenant’s employment. It has been expanded to include the reasons being that a) the tenant has ceased to be in that employment, or (b) that the tenancy was granted for the propose of providing the tenant with accommodation during the early part of that employment and upon that being fulfilled the landlords intends to let the dwelling house to another current or future employee. |
M |
2 months |
|
Ground 5D: end of employment requirements - social landlord granted due to tenant’s employment criteria and they no longer meet this |
M |
2 months |
|
Ground 5E: occupation as supported accommodation - property held for use as supported accommodation and current tenant did not enter to receive care, support or supervision. |
M |
4 weeks |
|
Ground 5F: dwelling house occupied as supported accommodation - require possession because support services or funding ended or reduced, provision no longer meeting tenant’s needs or placement was ‘move on’ accommodation. |
M |
4 weeks |
|
Ground 5G: Tenancy granted for homelessness duty - property used as temporary accommodation for homeless household and Local Authority had notified the landlord that the tenancy is no longer required. |
M |
4 weeks |
|
Ground 5H: Occupation as ‘stepping stone’ accommodation - Social landlord or charity lets to tenant meeting eligibility criteria at “affordable rent”, to help them access PRS and/or transition to living independently, and tenant no longer meets eligibility criteria or limited period has come to an end. |
M |
2 months |
|
Ground 6A enforcement action - landlord subject to enforcement action by Local Authority or banning order and needs to regain possession to become compliant |
M |
4 months |
Comment
Whilst much of the media focus has been on the impact of the bill on the private rented sector, the effect of the changes for RPs should not be underestimated.
The abolition of section 21 will remove the use of starter tenancies by RPs which means that all possession proceedings will need to be brought on one of the above grounds and will require a possession hearing at the expiry of the Notice of Seeking Possession if the tenant has not delivered vacant possession. This will inevitably be a lengthier and ultimately more costly process and therefore it will be essential that landlords have clear and succinct evidence supporting the grounds at the outset.
This extended process along with the increase in notice periods before proceedings commence, could result in the level of rent arrears being much higher by the time a possession hearing is heard. It will be essential for RPs to ensure that they are ready for these fundamental changes.
RPs should in particular consider their rent policies and procedures not only to reflect the changes in law but to make sure they are proactive in working with tenants, where possible, to address rent arrears before Court intervention is required. This will be particularly the case with tenants who are experiencing Universal Credit issues in light of the amendment to Ground 8.
Whilst the reduction in the notice period for serious anti-social behaviour is welcome, it is clear the Bill will encourage greater scrutiny by the Court on the interaction between landlord and perpetrator in relation to the discretionary ASB ground. It will be necessary for landlords to demonstrate their attempts to resolve the behaviour before proceedings are issued, and therefore, again, ASB policies and procedures will need to emphasise these attempts so the reasonableness of seeking a possession order is demonstrated
Given the extent of the changes, it is important that RPs start reviewing their tenancy agreements along with their policies and procedures now, to ensure they have the ability to rely on grounds implemented by the new legislation.
Should you wish to discuss any of the issues set out in this piece and their impact on your services, please contact Rebecca Mason or Aman Guru.
