The Renters (Reform) Bill: a closer look at proposed changes to grounds for possession
The Renters (Reform) Bill proposes sweeping amendments to the law that will govern most residential tenancies in England. Alistair Cantor examines one important aspect of the proposed changes – the grounds under which landlords will be able to seek possession of tenanted properties.
Part 1 of the Renters Reform Bill (“the Bill”), if passed as currently drafted, will amend the various sections of and Schedule 2 to the Housing Act 1988 (“the 1988 Act”), replacing the current provisions enabling landlords to determine assured and assured shorthold tenancies in order to re-take possession. Here are the key points about the proposed changes:
- The most important development will not be by way of what is going into the 1988 Act, but rather what is coming out of it. Section 21 will be repealed and landlords will no longer be able to terminate tenancies by s21, or in common parlance by way of “no fault evictions”. Fixed-term tenancies will no longer be permitted and only assured tenancies will exist, as ASTs will be abolished by the Bill’s provisions.
- There will be not less than 33 different grounds for possessions in Schedule 2 to the 1988 Act as amended. As under the current framework, they will be either mandatory or discretionary.
- Private landlords who wish either to retake possession so that they or a family member may live in the premises as their only or principal home, or to sell the property, will benefit from mandatory grounds for possession on those bases, albeit they cannot be relied on during the first six months of any tenancy. The mode by which the Bill intends to ensure there be only genuine reliance on these grounds is by making it a criminal offence to market for letting, or to relet, a property of which possession has been regained under these grounds within three months of doing so. Local authorities will have the power to impose financial penalties of up to £30,000 in lieu of a criminal prosecution, if satisfied beyond reasonable doubt the landlord has committed the offence. How this intended mechanism of monitoring and enforcement by local authorities will operate effectively in practice remains to be seen.
- There are kickers for both landlords and tenants in the proposed amendments to the mandatory rent arrears Ground 8. The bad news for tenants is the old Ground 8 in effect remains and there will be a new Ground 8A. The latter will establish a new mandatory ground for possession where the tenant has been at least two months or eight weeks in arrears for at least a day on at least three occasions in the three years preceding service of the notice; potentially tough justice then for the tenant who has successfully cleared substantial arrears on several occasions over a relatively extended time period. Meanwhile the sting in the tail for landlords is that for the purposes of calculating arrears under either ground, any part of the arrears the tenant is due by way of universal credit but has not yet received is to be disregarded. Queue allegations by tenants at the court door they are waiting for housing benefit and potential lengthy adjournments while the parties await responses from the DWP. This in particular may be of concern to social landlords. The old discretionary rent arrears grounds, Grounds 10 and 11, will remain. They will not be subject to the universal credit disregard but it is to be anticipated that judges may perhaps exercise any discretion on their part to permit tenants to progress any extant universal credit claims.
- The discretionary Ground 14 will be amended so it applies to conduct “capable of” causing nuisance or annoyance rather than conduct “likely” to do so. This appears to be an effort by the government to beef up its offering on combating ASB, but it is unclear how the courts will interpret and apply this change in the statute’s wording. As stated in the Government’s March 2023 Anti-Social Behaviour Action Plan, the legislative cogs are potentially grinding towards enshrining in law principles judges will be obliged to consider when determining cases involving this ground. Until such time as such new statute emerges, there might be thought to be little material difference between the old and new wording (“likely” vs “capable”), plus judges may be disinclined to make any sort of possession order in cases where the ASB relied on is merely hypothetically capable of causing nuisance or annoyance.
- There will be a new mandatory ground permitting landlords to retake possession where it is necessary to comply with any enforcement action or licensing requirement, for example a prohibition order or the refusal of an application for an HMO license.
- The Bill proposes a number of new grounds relating to supported accommodation. There will be two mandatory grounds allowing landlords to recover possession where: the property is held for the purposes of supported accommodation but the particular tenant did not enter the tenancy in order to receive care, support or supervision; or where the support services either cannot or will not be provided any longer in various circumstances, or the dwelling is physically unsuitable for the tenant. There is a further discretionary ground for possession where the tenant has unreasonably refused to engage with support services.
- We will see a number of new grounds inserted and/or existing grounds amended to cover a variety of scenarios, such as sale by mortgage, student accommodation and employment-related accommodation.
- There will be changes to the notice periods that must be given on any s8 notice, ranging from none (e.g. under ASB ground 14), two weeks, four weeks or two months. For example, notices raising Ground 8 or 8A, the mandatory rent arrears grounds, will need to give four weeks’ notice versus the current requirement of two.