Since the Renters’ Rights Bill (“the Bill”) has cleared its third reading in the House of Commons, and in the first of a series of articles analysing what the coming Act will mean for landlords and tenants, our Property Litigation Team look at the transitional arrangements for landlords seeking to repossess residential property in the next few months.
As things stand Section 21 of the Housing Act 1988 allows landlords to give two months’ notice to a residential tenant and (assuming the landlord has complied with its various statutory obligations) bring an assured shorthold tenancy (“AST”) to an end. If the tenant does not move out, a qualifying landlord can then avail themselves of an ‘accelerated’ court procedure and obtain a possession order without a needing to appear before a judge.
The Renters’ Rights Bill however does away with Section 21 and mandates that all new assured tenancies will be periodic and can no longer have fixed terms. Any provision providing for a fixed term will have no effect and all existing ASTs will become assured periodic tenancies following the Renters’ Rights Act commencement date.
In future a landlord will only be able to recover possession if they serve a notice under Section 8 of the Housing Act 1988 relying on one or more ground for possession. The abolition of Section 21 also takes with it the ‘accelerated’ court procedure so a landlord will also need to prove this ground in court to a judge.
The Bill amends some of the existing grounds and, helpfully, introduces several new grounds that a landlord might rely on (and we will look at these in more detail in the coming weeks) however following commencement it will be significantly harder to recover possession of a residential property.
In September of last year Mathew Pennycook, the Minister of State (Housing, Communities and Local Government), who is shepherding the Bill through parliament had this to say about commencement:
“We want to see tenants benefit from these reforms as quickly as possible. We have therefore determined to introduce the new tenancy system for the private rented sector in one stage. Upon the commencement date, the new tenancy system will apply to all private tenancies – existing tenancies will become periodic, and any new tenancies will be governed by the new rules”.
There are however transitional provisions contained in Schedule 6 Section 2 of the current version of the Bill that protect a landlord who has served a Section 21 Notice or begun repossession proceedings prior to the commencement date, in short a tenancy “remains an assured shorthold tenancy until disposal of Section 21 notice given prior to commencement date”.
As things stand a landlord has six months from the date a section 21 notice to bring possession proceedings however the transitional provisions hold that possession proceedings must be filed at court within the shorter of the usual six month period or a three month period beginning on the commencement date. The Bill is now in the House of Lords for scrutiny at the second reading stage so it will be a matter of months before it receives Royal Assent and the closer we get to this commencement date the faster a landlord who has served a valid Section 21 Notice will need to move.
The operative word in the last sentence is ‘valid’. Since there will be no second chances it is doubly important that any Section 21 Notice served in the runup to commencement complies with the statutory provisions restricting service of such a notice.
Please click here for further information about possession claims and if you would like advice in respect of the Bill, serving a valid Section 21 Notice or a possession claim more generally you can contact us through our website.