The second reading of the Renters’ Rights Bill (“the Bill”) took place before the House of Lords on 4 February 2025 and the Bill will shortly be examined line by line at the committee stage. It still isn’t clear exactly when the Bill will become law but the property litigation team at Grant Saw will provide a further update as and when.
Ahead of the committee stage, this article outlines the proposed changes to one of the most frequently used grounds for possession – rental arrears. The current law is governed by the Housing Act 1988 (“the Act”) which outlines at Schedule 2 the grounds on which the court can order possession of a property under Section 8 of the Act.
Mandatory Ground 8
Ground 8 relates to rental arrears and if a landlord can make out this ground the judge must make a possession order. Currently, a landlord can seek possession of a property on the basis of Ground 8 if:
a) Rent is payable weekly or fortnightly, at least eight weeks’ rent is unpaid;
b) Rent is payable monthly, at least two months’ rent is unpaid;
c) Rent is payable quarterly, at least one quarter’s rent is more than three months in arrears; and
d) If rent is payable yearly, at least three months’ rent is more than three months in arrears.
The proposed Bill will omit paragraphs (c) and (d) above and extend the period rent has to go unpaid by the tenant before a landlord can issue a Section 8 notice. If rent is payable weekly or fortnightly, the landlord will now have to wait for at least 13 weeks of unpaid rent before they can serve a Section 8 notice. If rent is payable monthly, a tenant will have to accrue three months arrears.
As well as this, the Bill proposes extending the notice period a landlord must give under a Section 8 Notice from two weeks to four weeks’. This means an increase in the time landlords are not being paid before they are able to issue proceedings for possession.
The Bill also allows for offsetting universal credit. If a tenant is eligible to receive universal credit, the amount of rental arrears calculated for the purposes of Ground 8 should exclude any amount that is owed to them in universal credit. This provides greater protection for tenants in receipt of universal credit should there be a delay in them receiving their payment through no fault of their own.
Discretionary Grounds 10 and 11
It appears that discretionary grounds 10 and 11 relating to rental arrears will remain unchanged save for the increase in the notice period. With grounds 10 and 11 the court is not obliged to grant possession even if the grounds are established.
The current law under the Act outlines that the court may order possession where:
Ground 10
“Some rent lawfully due from the tenant –
(a) is unpaid on the date on which the proceedings for possession are begun; and
(b) except where subsection (1)(b) of section 8 of this Act applies, was in arrears at the date of the service of the notice under that section relating to those proceedings”.
Ground 11
“Whether or not any rent is in arrears on the date on which proceedings for possession are begun, the tenant has persistently delayed paying rent which has become lawfully due”.
The Government’s Guide to the Renters’ Rights Bill suggests the amendments to possession grounds are aimed at ensuring they are fair to both parties. The aim is to give tenants more security, while allowing landlords to gain possession of their property in reasonable circumstances. The changes move the needle towards the tenant, inasmuch as they allow more time to pay rent arrears or find a new home, and away from a landlord who may need to wait longer without getting paid.
Please click here for further information about possession claims. If you would like advice in respect of the Bill or a possession claim, please contact us through our website.