A new era for possession under the Renters' Rights Bill

No more "no fault" evictions

The Renters’ Rights Bill (the RRB) marks a significant shift in the private rented sector as it will abolish assured shorthold tenancies and the option to use section 21 of the Housing Act 1988 (the HA 1988) to obtain possession simply by serving at least two months' notice ahead of or after expiry of the fixed term, the so-called "no-fault" eviction.  This reform aims to provide tenants with greater security and fairness when it comes to their homes.  

Possession under section 8 of the HA 1988

Going forward, once the RRB becomes law, all tenancies will be periodic assured tenancies and landlords will have to rely solely on section 8 of the HA 1988 to obtain possession by serving notice and making out one or more of the 37 specific grounds for possession which are to be set out in a re-vamped Schedule 2 to the HA 1988.

In this Renters’ Rights Bill Bitesize we explore some of these mandatory and discretionary grounds and consider some of the implications for both landlords and tenants. 

There are currently 17 grounds for possession of assured tenancies set out in Schedule 2 of the HA 1988. Once the RRB is enacted there will be a total of 37 grounds. Whilst some of the existing grounds of possession will be retained in their current form, some will be amended or repealed and some completely new grounds will be added.

The mandatory grounds for possession

The mandatory grounds require the court to grant a landlord possession if the landlord can prove the condition(s) specified in the ground. If the ground is made out, the court must grant possession.

These grounds are designed to address situations where landlords have a legitimate need to regain possession of their property. Some of the grounds worthy of note are set out below.

Occupation by landlord or family member (Ground 1)

Landlords will still be able seek possession if they, or certain close family members (and this group has been expanded under the RRB beyond just the landlord's spouse or civil partner), intend to occupy the property as their only or principal home. Amendments to this ground also remove the requirement for the landlord to have previously occupied the property as their principal home.

However, whilst this ground is mandatory it cannot be invoked within the first year of a tenancy being granted.

In addition to this, if a landlord proceeds with possession under this ground, they are prohibited from re letting (to anyone other than their family members), or marketing the property for re-letting, for the period beginning with the date that the notice seeking possession is served and ending 12 months from the date stated in the notice as the earliest date on which proceedings for possession will begin. These restrictions apply regardless of whether the tenancy has continued throughout this period.

Sale of the property (Ground 1A)

This is a new mandatory ground allowing landlords to regain possession if they intend to sell the property. This ground can only be used after the first year of a tenancy being granted (unless the property is subject to a compulsory purchase order from a local authority) and it cannot be used by providers of social housing.

Similar restrictions on re-letting or marketing the property for re-letting to those that apply to Ground 1 also apply to this ground albeit that landlords will be able to let intending purchasers in on a licence in ahead of their purchase of the property and the restrictions also do not apply where the property has been demonstrably for sale on the open market at a fair price for not less than six months and the landlord has not had any suitable offers to buy it.

Redevelopment (Ground 6)

Landlords can currently seek possession if they intend to demolish or reconstruct the whole or a substantial part of a property or to carry out substantial works to the property and the tenant’s occupation prevents this.

This ground is being widened under the RRB to include relevant social landlords who will usually be required to provide suitable alternative accommodation for the duration of the works - specific conditions, timeframes and notice requirements apply.

Severe ASB/Criminal Behaviour (Ground 7A)

Where a tenant has been convicted of a type of offence listed in the ground, has breached a relevant order put in place to prevent anti social behaviour or there is a closure order in place prohibiting access to the property for a continuous period of more than 48 hours landlords can serve notice and then begin proceedings immediately.

Serious rent arrears (Ground 8)

Currently landlords can seek possession on a mandatory basis if a tenant is at least two months or eight weeks in arrears as at the date of service of the notice seeking possession and the date of the possession hearing.  The RRB increases this threshold to three months for monthly rental payments or 13 weeks for weekly/fortnightly rental payments.  Notably, any arrears resulting from delays in Universal Credit payments are to be excluded from this calculation.

Notice periods

Grounds 1, 1A and 6 will require four months' notice and ground 8, four weeks' (double the current two weeks) notice to be given to tenants prior to commencing proceedings for possession.

The discretionary grounds for possession

The discretionary grounds require the court to decide whether the making of a possession order is reasonable, even if the landlord proves the condition(s) specified in the ground, and, then if it is reasonable, whether that order should be suspended or outright.

These grounds provide the court with the flexibility to consider the circumstances of each case. Two grounds which are particularly worthy of note are set out below.

Breach of tenancy agreement (Ground 12)

The current ground 12 will continue in force unamended and landlords will still be able to seek possession if tenants breach significant terms of the tenancy agreement. This includes subletting without permission or causing damage to the property – the notice period remains at two weeks.

Anti-social behaviour (Ground 14)

If a tenant engages in anti social behaviour, landlords can seek possession and Ground 14 itself will remain in force in its current form.

However, when deciding whether it is reasonable to make an order, in addition to considering the effect of the behaviour, the court must also look at whether the tenant has co-operated with any attempts by the landlord to encourage the conduct to cease.

Implications for Landlords

The RRB introduces a number of changes to the current regime for obtaining possession that landlords will need to navigate. Some of the issues landlords must consider are:

Evidence

With the abolition of "no-fault" evictions and the ability to obtain possession on an accelerated basis simply by serving notice, all claims for possession will now need to be supported with evidence in order to make out the ground(s) for possession being relied upon.

As such it will be more important than ever that landlords maintain robust record keeping processes. Now would be a good time to revisit procedures currently in place for that.

Notice periods

Landlords should ensure they are up to date with the requisite notice periods for each ground, some of which have been amended under the RRB, with most grounds requiring four weeks' notice to the tenant before proceedings can be commenced.

In relation to rent arrears, not only will the thresholds for the amount of arrears increase, but landlords will also need to wait four weeks from service of the notice seeking possession before proceedings can be issued. If seeking possession on the mandatory rent arrears ground 8, landlords will also need to be mindful of any issues tenants have with Universal Credit and so dialogue with tenants both before serving notice and issuing possession proceedings will be increasingly important.

Court proceedings

The abolition of section 21 of the HA 1988 and the accelerated possession route means that all possession claims will require a court hearing, potentially leading to longer timelines for regaining possession and increased expense. This is further complicated by the fact that many county courts are already overburdened and a lack of investment means the system is still heavily paper based as opposed to being digital.

Conclusion

The RRB represents a significant reform of the rental sector in England and Wales and aims to rebalance the interests of landlords and tenants by giving greater security and protection to tenants.

By adding to and enhancing existing grounds for possession and introducing safeguards against misuse, the RRB seeks to create a fairer and more transparent rental market. Landlords will need to adapt quickly to the new legal framework, ensuring they have valid reasons for evicting tenants and proper evidence in order to make out relevant grounds when seeking possession. In general, the process of obtaining possession will be more involved and more expensive and we expect that this will prompt more thorough screening of tenants at the outset. The impact of the RRB on the supply of private rented accommodation in the market and any knock-on effect on the cost of renting remains to be seen as landlords get to grips with the changing landscape.