The Renters Reform Bill – Section 8

The Renters (Reform) Bill introduced by the Government signifies the anticipated reform to the current housing legislation as well as the abolishment of ‘no fault’ Section 21 Notices.

Removing Section 21 means additional grounds for serving a notice of possession under Section 8 have been implemented, further to this Section 8 Grounds have also been amended.

What are the changes to the Section 8 Grounds?

At present, Section 8 Ground 1 permits a landlord to provide two months’ notice if they or their civil partner/ spouse wanted to move into the property.

The new Ground 1 widens this to the landlords:

However, to rely on this Ground and to terminate the current tenancy it must have at least been in existence for six months. The landlord is also not required to have lived in the property prior to the tenancy starting for the Ground to apply.

However, this does suggest it leaves it open to rogue landlords who as a way of removing a tenant they move a relative of theirs into the property.

In the Bill, the Government has considered this and decided that the landlord is forbidden to market the property for letting for three months after the expiry of the Ground 1 Section 8 Notice, although they are able to let the property after that if they wish.

The Bill shows that if this scenario happened then a landlord could be fined or even prosecuted. Although, they would only be fined or prosecuted if it was reported, which is unlikely, given the circumstances that the outgoing tenant will likely be the only person to know that this has happened, and it wouldn’t be until they had vacated the property.

Section 8 Ground 1A

An additional Section 8 Ground 1A has been launched which if the landlord intends to sell the property the Section allows the landlord to serve two months’ notice. Likewise, the tenant must have been there for at least six months. The added Section of this Ground provides a concession to landlords as selling a property occupied by a tenant is often a reason landlords want to take back possession.

Alongside the proposed new Ground 1, a landlord is forbidden from renting out the property for at least three months after the termination of the notice relying on Ground 1A Section 8 Notice, although once again you can see rogue landlords potentially getting away from fines and prosecution if their behaviour goes unreported.

Section 8 Ground 2

Section 8 Ground 2 permits mortgagees to serve notice to be able to dispose of the estate with nobody there. This Ground currently only applies to mortgages granted before the start of the relevant tenancy. The Bill amends this Ground to all mortgages regardless of being granted prior to the start of the tenancy. This is a real positive to mortgagees. Although, for sub-tenants of mortgaged properties this will mean they are less secure under these proposals.

Currently, Ground 8 is the most relied on Ground for landlords to use in situations where they are trying to regain possession under Section 8 and gives a two week notice period.

Ground 8 applies where the tenant is two months in arrears of rent at the date of the Section 8 Notice and of a possession hearing. The notice period has been extended in the Bill to four weeks.

Regarding any outstanding Universal Credit payments, the tenant is to receive, when calculating the arrears, the outstanding payments are not to be included. If the payment of Universal Credit would lower the arrears beneath the two month threshold.

Section 8 Ground 8A

Another new Section 8 Ground 8A has also been put forward in the Bill. This is where a tenant can be served a four week notice period from the landlord if they have been continually in two months arrears or more. If a tenant falls into the two month arrears, for at least a day, on three or more separate times, then this would be the trigger for Ground 8A. The Ground would not apply if the tenant fell into more than two months’ arrears on either one or two occasions it has to be at least three, however, the landlord could still rely on Ground 8.

It looks as though the new Ground is aimed at handling a perceived loophole in the present legislation, as a landlord would not be able to rely on Ground 8 in a hearing if the tenant brings the arrears lower than the two month threshold (even by £1). However, if the landlord relied successfully on Ground 8A then it would give the landlord the right to a compulsory possession order, despite whether the tenant pays the arrears.

It’s important for landlords to ensure they have systems in place which will monitor the tenants’ payments and will show where the tenant is consistently missing or paying late.

Evicting tenants due to anti-social behaviour

The new Bill expands its powers to landlords who want to evict tenants due to anti-social behaviour.

These changes are to Section 8 Ground 14, as Ground 14 at present permits a landlord to instantly bring proceedings following service of a Section 8 Notice where the tenant has caused or is likely to cause a nuisance to the landlord or neighbours. An amendment to ‘likely causing’ will be changed to ‘capable of causing’ under the new Bill. This means the landlord will only have to prove the tenant is ‘capable’ of causing a nuisance rather than ‘likely’, again this works in favour of the landlord.

Prerequisites to obtaining a possession order

The preconditions needed for a Section 21 Notice will not affect a Section 8 claim, this is a positive for landlords, although fines will be issued for non-compliance, where appropriate. Landlords need to be aware that the requirement that deposits be registered and the deposit prescribed information be given will be prerequisite to obtaining any possession order. However, this will not stand if the deposit is first returned to the tenant.

This conflicts with the present requirements, such as Section 21 Notice is seen to be not valid if the deposit requirements do not comply with the time of service of the notice. Whereas the new requirements suggest that landlords can comply with the deposit requirements prior to the possession order being made.

Comment

Whilst a lot of the Bill is focused predominately on the abolition of the ‘no fault’ Section 21 procedure, however, the effect of this may be seen as excessive, such as most landlords will have reasons for serving this notice to tenants, and those reasons now come under the extended Section 8 Grounds.

It is a welcome change in the sense of protecting tenants from being evicted for no actual reason. However, it is important to note until this legislation is passed then it still exists under the current rules. The draft could then potentially be amended as it moves through Parliament and if and when the Bill is passed then there is more than likely to be a long transitional period so that landlords and tenants can become familiar with the new requirements, this suggests Section 21 will still be in place for a long period of time.