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The Renters’ Rights Bill is an evolution in legislation governing the private rented sector. Not since the Housing Act 2004 have we experienced such a shake-up in the law surrounding the relationship between landlords and their tenants. The Bill seeks to:
1. Introduce a new private rented sector landlord ombudsman.
2. Create a private rented sector database.
3. Give tenants better rights to keep pets at home.
4. Apply ‘Awaab’s Law’ to the sector (i.e. set clear legal expectations about the timeframes within which landlords must take action to make homes safe where they contain serious hazards).
5. Make it illegal for landlords and agents to discriminate against prospective tenants in receipt of benefits, or with children.
6. End the practice of rental bidding by prohibiting landlords and agents from asking for or accepting offers above the advertised rent.
7. Give more powers of enforcement to local authorities.
This article focuses on the key changes to the grounds on which a landlord can rely in obtaining possession orders at court.
The Bill sees the abolition of ‘no fault’ evictions.
A landlord can currently evict a tenant by serving a ‘no fault’ eviction notice pursuant to section 21 of the Housing Act 1988 (‘HA 1988’). The tenant need not be in breach of their tenancy agreement, hence the term ‘no fault’ eviction notice.
The fixed term of a tenancy agreement must have expired, and the landlord must have provided the tenant with prescribed documents (typically the gas safety certificate(s), the energy performance certificate(s), the How to Rent Government-produced booklet, and the tenancy deposit scheme certificate).
There will be new/amended discretionary/mandatory grounds for possession, that a landlord can rely on pursuant to section 8 of the HA 1988.
A mandatory ground is one on which the court must order possession, while a discretionary ground is one on which the court may order possession (at the judge’s discretion).
The key grounds are as follows:
1. Rent arrears.
2. Occupation by landlords and/or close family members.
3. A proposed sale of the property.
4. A superior lease coming to an end.
5. A need to comply with any enforcement action/licensing requirement imposed by local authorities.
6. Any breach of the tenancy.
The mandatory ground for possession based on rent arrears would be amended as follows on the current proposal:
• There must be at least three (instead of two) months’ rent arrears if rent is paid monthly or 13 (instead of eight) weeks’ rent arrears if rent is paid weekly.
• A landlord must give no less than four weeks’ notice.
A new mandatory ground is proposed for when a landlord or their family intends to occupy a property as their only/principal home. To rely on it:
• The tenancy must have been in place for at least one year when the notice expires.
• The landlord must intend that the property will be their or their family members’ only or principal home (‘family’ being limited to spouses/partners, parents, grandparents, siblings, children and grandchildren – this includes ‘half-blood’ relations).
• The landlord must give four months’ notice.
• The landlord cannot market for letting, or re-let the property, for a term of less than 21 years within 12 months of the vacation date specified on the notice or 12 months from the date the landlord files a possession claim if required (unless the court makes an order for possession based on a different ground). This is known as the ‘restricted period’.
A new mandatory ground features for landlords wanting to sell their property or re-let it for a term of not less than 21 years (i.e. in effect sell it on a long leasehold title). To rely on it:
• The tenancy must have been in place for at least one year when the notice expires.
• The landlord must give four months’ notice.
• The restricted period applies.
The proposal is that it will be a criminal offence to re-let/market a property within the restricted period.
Initial or minor non-compliance incurs a civil penalty of up to £7,000 and serious, persistent or repeated non-compliance could result in civil penalties of up to £40,000 and/or criminal prosecution.
The government plans to provide local councils with a range of new investigatory powers to enable them to enforce reforms, including powers to require information from relevant persons and any persons, and also powers of entry to both business and residential premises.
Just how monitoring and enforcement by local authorities will operate effectively in practice remains to be seen.
A new mandatory ground is proposed for the following landlords:
• Private registered providers of social housing.
• Tenants of superior landlords under agricultural tenancies.
• Persons holding property for the purpose of making it available for supported accommodation.
• Companies in which local authorities owns at least 50% of the issued share capital.
To rely on this ground, the following must apply:
• The landlord’s lease is under a superior tenancy that is coming to an end or has ended.
• The superior lease was for a fixed term of no less than 21 years and has expired or will do so within a 12-month period from the date notice is served.
• After a superior tenancy ends, the superior landlord becomes the tenant’s direct landlord, and they can seek to take possession based on this ground.
The notice period for this ground is four months.
A new mandatory ground will come into force permitting landlords to recover possession wherever it is necessary to comply with any enforcement action or licensing requirement. For example, this might be necessary when a landlord must comply with a prohibition order, or in circumstances in which an application for a ‘house in multiple occupation’ (‘HMO’) license has been refused.
The notice period for this ground is four months.
This discretionary ground for possession is unchanged.
In this way, landlords can obviously still seek to recover possession whenever tenants breach obligations set out in the tenancy, other than those relating to rent payment.
The making of a possession order remains discretionary, it must obviously be a serious breach to be worth pursuing (e.g. the tenant is using the property as a cannabis farm).
The notice period remains two weeks.
In reality, not an awful lot will change in terms of mandatory grounds save for the timeframes for serving notice.
The Bill demonstrates the government acknowledges the importance of both private landlords and the UK’s rental sector.
Conservative and Labour MPs continue to back the Bill, meaning cross-party support ensures the likelihood of these measures coming into force without much objection in the House of Commons and House of Lords.
The Bill is currently in the report stage in the House of Commons and predications indicate it will become law by the summer of 2025.
Our dedicated Property Litigation solicitors, recognised in this field, regularly advise landlords and tenants from both the commercial and residential sectors. We offer clear, cost-effective advice based on years of dedicated expertise that we use to deliver your objectives.
We aim to give you the perspective you need to make informed decisions about how to move forward. We are happy to have an initial phone discussion, without obligation on you, to ascertain how best we can assist. We offer initial consultations to new clients at reduced rates, providing face-to-face or virtual meeting advice, followed up in writing. Contact us for more information.
This article was produced on the 29th November 2024 for information purposes only and should not be construed or relied upon as specific legal advice.
