Residential Properties: Changes afoot what a landlord should consider

By Maggie Kerr

Associate

04 July 2023

Article Insights

Landlords and tenants are being hit by the cost of living crisis. Tenants have to juggle with rising costs and landlords who have a buy to let mortgage will be hit with an increase in interest rates.

If a tenant is in financial difficulties, we strongly suggest they speak to their landlord as soon as possible and try and agree a way forward.

Landlords can obtain possession of the property because a tenant is in breach of the tenancy agreement or via the “no fault” route, in which case if the landlord wants the property back they can provided they have carried out the correct procedure at the start of the tenancy. This will all change in the coming year when the “no fault” route is abolished by a new Act of Parliament.

Highlights from the proposed Bill

The Renters (Reform) Bill was introduced to Parliament on 17 May 2023 with proposals to overhaul the residential tenancy system with the aim to provide a better position for tenants in England.

Highlighted below are the key changes that are proposed but not yet law and are likely to be amended:

1. The end of section 21 “no fault” evictions. The tenant can end the tenancy whenever they choose. Landlords will only be able to end a tenancy where an eviction ground applies under section 8.
2. Section 8 eviction grounds are to be amended and expanded.
3. All assured fixed term tenancies to be replaced with a new system of open ended “rolling” tenancies.
4. Fines to be imposed on Landlords for breaching the new rules regarding letting their properties will be imposed up to £5,000, with fines of £30,000 for more serious or repeated breaches.
5. There will be a new process of implementing annual rent increases, with the First Tier Tribunal to determine the market rent if a tenant appeals a rent increase.
6. Landlords will no longer be able to refuse tenants on benefits, with children or pets.
7. There will be separate regulation regarding the Tenants Complaint Scheme and a Landlord Property Portal where landlords will compulsorily set out their properties.

It is unclear when the Bill will become law it could be later this year or 2024. In the meantime while landlords still have the option of “no fault” evictions, section 21 notices they should consider their options carefully.

What can landlords do?

Landlords need to decide if this is a time to leave the residential lettings market and if so make use of the Section 21 Notice procedure to obtain possession of their property and sell the property. Once the Bill is made law, the use of a Section 21 Notice will no longer be available.

Landlords needs to look at the property they let and consider how the present economic market and the future changes to the law affect their business, be it one property or a portfolio of several properties.

The rest of this Article will consider the options available at the present time, in particular a Section 21 Notice and/or a Section 8 Notice, which are two methods a landlord, can obtain possession of their property.

Section 21 “no fault” notice

A Section 21 is often the preferred Notice and court procedure as it is a more straightforward route to remove a tenant. Following this notice, a landlord may use what is known as the ‘accelerated possession procedure’. The two-month Notice to obtain possession cannot be served during the first four months of a tenancy or to expire before the end of the fixed term of the tenancy. At the end of the notice period if the tenant fails to vacate, the landlord can use the courts ‘accelerated possession procedure’. Provided the landlord carried out the correct procedure at the start of the tenancy, the court cannot usually refuse to grant a possession order.

Section 8 eviction notice

Examples of section 8 reasons for evicting a tenant are if:

• the landlord wants the property back to live in or
• a tenant has breached the tenancy agreement, for example arrears of rent, anti-social behaviour, or keeping the property in a bad state of repair.

A landlord can serve a Section 8 Notice at any point during the tenancy. The notice period can vary in length from weeks to months, depending on the grounds for possession some grounds are mandatory, such as persistent delay in paying rent and others are at the court’s discretion.

Strategy and Tactics

A landlord can serve both notices and if the tenant refuses to leave, the landlord will need to decide which route to take. That decision will depend on a number of factors and each case is different.

It is important to take legal advice to decide the best route to regain possession of a property. Delay and unnecessary costs obtaining possession can be caused by serving the wrong notice. Strategy is important.

Our experienced Property Litigation team at Taylor Walton are here to help you decide on the best strategy for obtaining possession or evicting a tenant. If you would like to contact a member of the team, you can email us or call us on 01582 731161.

Disclaimer: General Information Provided Only
Please note that the contents of this article are intended solely for general information purposes and should not be considered as legal advice. We cannot be held responsible for any loss resulting from actions or inactions taken based on this article.