The Renters Reform Bill

On 24 August 2022, we published an article on the Government’s proposals for reforming the Private Rental Sector, as set out in the White Paper.

The Government has now produced the Renters Reform Bill which is presently passing through the Second reading stage in the House of Commons. This article covers the proposed and published proposals affecting Landlords in the Private Renters Sector to recover possession of their property. A separate article will deal with the other effects and implications of the Bill.

As predicted, the Section 21 so called “no fault” eviction process will be abolished, which means that Landlords will only be entitled to recover possession when they can show justification or good reason for doing so.

The grounds set out in Schedule 2 to the Housing Act 1988 as amended remain in force under the proposals, subject to some amendment and additions.

Ground 1 – Own Use

In accordance with the original Ground 1 of Schedule 2 to the Housing Act, possession could be recovered if the Landlord had either lived at the Property as his or her main residence or required it as a main residence on condition that a prior written notice had been given to the Tenant, that Ground 1 may be relied upon.

The new Ground 1 is wider in scope, entitling the Landlord to recover possession where the Property is required for use as the principle home for either the Landlord, the Landlord’s spouse or civil partner, parents/grandparents, siblings, children or grandchildren.

The requirement for prior notice has been dispensed with. However, the ground cannot be relied upon until the expiry of six months from the Tenancy Agreement.

Ground 1a – Intention to Sell

This is a new mandatory ground for possession entitling the Landlord to recover possession where there is an intention to sell and as with Ground 1, the relevant notice cannot be served upon the existing tenant until 6 months has expired from the date of the tenancy agreement.

Ground 3 – Holiday Lets

This ground, which had entitled a Landlord to recover possession of a property for use as a holiday let has been abolished.

Ground 8 – Arrears of Rent

The mandatory Ground 8 remains largely intact under the proposals and accordingly where rent is payable monthly and where two months arrears of rent have accumulated at the time that the relevant notice is served upon the tenant and at the time of the Court Hearing, the Court must make an Order for Possession.

It is, however, proposed that in respect of any amount of rent which is unpaid as a consequence of the tenant not having received a payment or award as part of Universal Credit Entitlement, such non-payment is to be ignored.

Ground 8a – Arrears of Rent

This new mandatory ground is intended to prevent tenants from effectively defeating the original ground 8 by making a payment prior to the Court Hearing so as to reduce the arrears of rent below 2 months.

Accordingly, the new ground provides that where there has been within a three-year period ending at the date of service of the Notice and where rent is payable monthly, at least two month’s rent has been outstanding for at least a day on at least three separate occasions, the Court must make an order for possession.

Where rent is payable for a period shorter than a month, the Landlord is entitled to possession where at least 8 weeks rent was unpaid for at least one day and on three separate occasions.

Grounds 10 and 11 – Arrears of Rent

These discretionary grounds remain in force and unaffected.

Ground 10 provides that where some rent is lawfully due from the Tenant to the Landlord at the time of service of the Notice and the time that proceedings are commenced, the Court may make an Order for Possession and Ground 11 provides that whether or not any rent is in arrears at the date possession proceedings are commenced, there had been a persistent delay on the part of the Tenant in paying rent lawfully due.

Ground 14 – Anti-Social Behaviour

This discretionary ground set out in the Housing Act 1988 as amended provided that the Court may order possession where the tenant or another person residing at the Property has been guilty of conduct causing or likely to cause a nuisance or annoyance to the Landlord or to a third party. In the published Bill, Ground 14 has been tweaked substituting the words “likely to cause a nuisance or annoyance” to “capable of causing” a nuisance or annoyance. Whilst the change from “likely” to “capable” will lower the burden of proof on the part of the Landlord in removing tenants guilty of anti-social behaviour, in reality recovering possession under this ground will still present evidential and cost difficulties to the Landlord.

In relying upon this ground, the Landlord will need to produce sufficient witness evidence in order to persuade the Court that the Tenant or a person residing at the Property is guilty of anti-social behaviour and if the Judge is not satisfied with that evidence, the claim will fail. Even where the claim succeeds, the Landlord may struggle to recover costs where the tenant is impecunious.

Conclusion

Whilst the Renters Reform Bill contains some additional grounds available to Landlords to recover possession, the abolition of the Section 21 Procedure necessarily means that all possession claims will need to be determined by a Judge on consideration of available evidence, resulting in a far less certain, more lengthy and far more expensive procedure.

How can Ellis Jones help?

If you require advice and guidance on the above, please contact Tim Glover at tim.glover@ellisjones.co.uk or 01202 052333.