Renters Reform Bill – changes to grounds for possession

We analysed the proposed changes in June 2022 (see our former ebriefing) but they are now further re-organised and amended. Set out below is a summary of the new grounds and explanatory notes to the Bill. Bear in mind the Bill is of course subject to amendment whilst working its way through Parliament. A very useful Annex B to the Bill sets out all the grounds and their notice periods in one table. Reading that alongside this ebriefing may assist.

References to mandatory grounds means the court generally has no discretion and must make a possession order if the ground is made out. A discretionary ground means the court must be satisfied the ground is made out and that it is reasonable to order possession.

Rent arrears grounds

Grounds 10 and 11 remain unchanged save that the notice period increases from two to four weeks.

Mandatory ground 8 remains but with one change. Arrears that have arisen as a result of unpaid universal credit (UC) where the UC payment is pending are to be ignored.

The exception does not presumably cover where a tenant would be eligible for UC but has not applied for it, or not provided the information requested and their application is not therefore live.

New mandatory ground 8A for repeated rent arrears

Ground 8A is proven if within a three-year period ending with the date the NSP is served, at least two months/eight weeks rent (monthly/weekly tenancy) was unpaid for a least a day on at least three separate occasions.

The occasions are defined as being separate if in between those occasions, the arrears are reduced to less than two months/eight weeks arrears for at least one day. Again, any entitlement to unpaid UC is to be ignored.

This appears to be very easy to prove and one wonders if it is necessary?. The Explanatory Notes suggest it is designed to stop tenants from reducing the arrears just below the two-month/8 week limit just before a hearing.

New grounds for sale/transfer of a property – Grounds 1A and 1B. (Mandatory grounds).

It was hoped that private registered providers (RPs) could use the sale ground 1A to sell a property following an asset management review if it was found to be too expensive to maintain, or too isolated to provide effective and affordable housing management services. 

Unfortunately, RPs are excluded from using the sale ground 1A which will only apply to private landlords. Is this due to fears it would reduce tenants security of tenure?

A notice can only be served at least six months after the current tenancy has begun save where selling to an authority that has served a compulsory purchase order (CPO). There is no requirement to include a provision in a tenancy agreement that the sale ground may be used.

The only exception to an RP being entitled to sell is found in new Ground 1B for rent-to-buy agreements.When the assured tenancy was a rent-to-buy agreement and the period of that agreement has expired, as long as the landlord has complied with its provisions, they can then sell at the end of the period to the tenant or on the open market if the tenant does not buy.

New Ground for possession when superior lease ends, ground 2ZA. (Most private landlords excluded. Mandatory ground).

A court must order possession to e.g. an RP landlord when there is a landlord with a superior lease which is coming to an end.

New grounds 5A-5G allow possession where the property was required for a particular purpose and that purpose has come to an end.(All mandatory).

Ground 5B. Possession for occupation by a person who meets employment requirements.

The landlord is an RP and requires possession to let a person who will meet requirements connected to their employment and the current tenant no longer meets them. 

The Explanatory Notes to the Bill give key worker accommodation as an example where they may at one point have been in low demand so the property was let to non-key workers but are now needed for key workers.

Ground 5C. This is the old but expanded ground 16 and by moving it to the earlier grounds it becomes a mandatory ground. For use where the property was let to the tenant as a consequence of their employment which has now come to an end, or the purpose of that employment has now come to an end. The landlord must be the employer or acting on behalf of the employer.

Grounds 5E and 5F are the new supported housing grounds (mandatory) together with ground 18 (discretionary). These seek to cover all the situations where supported housing providers would currently grant assured shorthold tenancies and end them using s21 notices, which will of course cease to be available after the Bill comes into force/transitional provisions kick in. The grounds are as follows:

Ground 5E – the landlord seeking possession requires possession of the property to let it as supported accommodation and the current tenancy was not granted for the purpose of receiving care support or supervision. Can only be relied on where the property is usually intended to be used as supported housing and the current tenancy was not granted for that purpose (perhaps let as general needs during a period of low demand).

Ground 5F – only for use by supported housing providers. To enable them to end a tenancy to enable them to continue to operate safely, effectively or otherwise protect the viability of their service. 

The property was supported accommodation when the tenancy was granted and any of the following applies:

1. Move on accommodation – the tenancy was granted to provide support services for a limited time in order to enable the tenant to be able to move on in the future and that time period has ended. 
2. Support services from a third party and those services have ended or they are failing to provide the support. The landlord must again have used reasonable endeavours to find another support provider but has been unable to do so.
3. The accommodation or support services are wholly/partly funded by a third party and that funding has ceased. It would not be reasonable for the landlord to continue to provide the placement or support services without the funding. Again the landlord must have used reasonable endeavours to find another support provider.
4. The support services provided are not appropriate because they exceed the tenant’s actual requirements for care, support or supervision. Designed for situations where the tenant’s care needs have decreased or for temporary placements pending more appropriate placements.

Ground 18 is a new (discretionary) ground where the tenancy is of supported accommodation and the tenant has unreasonably refused to co-operate with the person providing support services with regard to those services. 

This is clearly helpful where the registered provider is the landlord but not the support provider, and for cases of non-engagement with support. Note the tenant must have ‘unreasonably refused to cooperate’ with the support services. See para 593 of the explanatory notes and section 24 of Schedule One of the Bill for the definition of a supported housing provider, which includes an RP.

Ground 5G is the new ground for possession of a tenancy granted for the purposes of the local authority’s homelessness duty under s193 Housing Act 1996. Available to all landlords but only for use where the local authority has notified the landlord that the tenancy is no longer required and within 12 months of that notice. This ground does not apply to other homelessness duties, only the main duty under s193.

Ground 6, Redevelopment/Demolition Ground – amended .

The amendment is that it cannot be used in the first six months unless the landlord was authorised to acquire the property under a CPO. If the landlord is a social landlord, they can only use the ground when the superior landlord is undertaking substantial redevelopment.

Quite limited then especially when RPs cannot use the sale ground either.

New ground 6A – to allow Compliance with Enforcement Action against a landlord

This ground was not proposed at all in the consultation papers, but now entitles a landlord to recover possession in any of the circumstances below where it would be unlawful for the landlord to maintain the tenancy. Perhaps aimed mainly at the private rented sector, as a mandatory ground it perversely seems likely to discourage tenants from seeking enforcement action via a local authority where their homes are in very poor condition or non-compliant with HMO licensing schemes. There is no requirement for the landlord to provide suitable alternative accommodation, for example. The circumstances are:

1. The letting causes the landlord to be in breach of a banning order.
2. An overcrowding hazard under the HHSRS exists and the local housing authority has served an improvement notice.
3. A prohibition order under the Housing Act 2004 prohibits the use of the property or any common parts.
4. The property is a HMO which is required to be licenced and the local authority has refused or revoked a licence.
5. The property is a licenced HMO and is occupied by more than the maximum number of tenants permitted in the licence. 

Ground 7, inheritance of tenancy on the death of a tenant – amended

This extends the timescale for applying for possession from 12 months to 24 months, recognising the length of time it can sometimes take to investigate and find evidence to confirm whether a person left behind in a property after a tenant’s death is a successor or inherits the tenancy. 

Ground 14 for anti-social behaviour is slightly amended. Just one change to the definition of anti-social behaviour which must be ‘capable’ of causing nuisance or annoyance, not just ‘likely to’. A minor change which may make the ground easier to prove.

Do note where ground 7A the mandatory anti-social behaviour ground and ground 14 are relied on, the Court may not make a possession order to take effect within the period of 14 days, beginning with the day on which the NSP was served. Short notice of the NSP is still permitted but any order cannot be made for 14 days. As it seems highly unlikely a court will have abridged time and listed a hearing within 14 days of serving an NSP this seems unlikely to be often relevant.

Changes to notice periods

The Section 8 NSP remains a prescribed form and the notice periods (save for the ASB grounds 7A and 14) are set out under Section 3 of the Bill in a useful table below.

Court changes?

Finally, will there be any changes to speed up court proceedings? We know from the response to the consultation papers in 2022 that a dedicated housing court has been ruled out. The Government give a helpful indication of the future as follows:

“… we are working in partnership with the Ministry of Justice and HM Courts and Tribunals Service, to ensure that, in the small proportion of tenancies where court action is required, court users can use a modern, digital service. This remains a priority for the government. …. we will align the abolition of section 21 and new possession grounds with court improvements. This includes end-to-end digitisation of the process and our work with the courts to explore the prioritisation of certain cases, including anti-social behaviour”

If you have any queries, do not hesitate to contact Helen Tucker, partner and head of the housing litigation team (Birmingham).

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