Rental reform: What you need to know: possession grounds and court reform
The long-awaited white paper on rental reform has now been published, with housing law in England is set to change substantially in the next few years.
Fixed term assured and assured shorthold tenancies will be replaced by a new periodic tenancies, and landlords will be required to sign up to mandatory redress and list their properties on a new property portal.
These changes will all have a substantial impact on the sector, but perhaps the biggest change will be around seeking possession. The Government committed to removing Section 21 notices in its manifesto, but promised substantial court reform and strengthened possession grounds alongside it to give landlords confidence to continue to in the sector.
With housing in short supply and 230,000 new homes to rent needed each year, the PRS has a vital role in ensuring everyone can find a place to live. The NRLA believes new legislation that increases the rate of market exit will constrain supply and exacerbate the current supply issues.
New Possession grounds
As part of our white paper on the future of the private rented sector, the NRLA called for –
- The strengthening mandatory rent arrears grounds
- The creation of a new ground where landlords wish to sell the property;
- Amendments to Ground 1 of Schedule 2 of the Housing Act 1988, so the landlord may regain possession to move either themselves or a family member into the property;
- Amendments to the student accommodation ground so that all landlords who let student accomodation to students can seek possession if tenants stop being a student;
- Strengthening of the anti-social behaviour grounds, providing protection for other tenants and neighbours who act as witnesses, and providing clear guidance to the judiciary on when possession should be granted for anti-social behaviour.
Sale and moving back into the property
The Government has adopted some of these suggestions, and landlords who intend to sell or move their family into their rental property will be able to regain possession. Both of these grounds will require two months’ notice and cannot be used in the first six months after the tenant moved in.
Similarly, there are some improvements to the grounds for rent arrears. A new mandatory ground for persistent serious arrears is set to be introduced. This will be usable in cases where the tenant has built up more than two months of arrears at least three times over the course of three years.
This will be in addition to the existing mandatory ground for rent arrears (Ground 8) which can be used where the tenant is in two months of arrears at the time the notice and at the date of the court hearing.
On the anti-social behaviour ground, the situation is less clear. There has been some movement on this, with the mandatory anti-social behaviour ground (7a) seeing its notice period reduced. However, this ground is rarely used in the PRS as it requires a conviction.
Typically, in the PRS the victims of anti-social behaviour are neighbours or other tenants. They often struggle to come forward with confidence to give evidence due to delays in the court system and concerns about living in the property after providing evidence against another tenant. As a result, anti-social behaviour cases are typically dealt with on the discretionary ground (14).
Unfortunately, the only commitment in the white paper around this ground is to explore whether or not guidance would be useful. We believe that guidance is not only required for the judiciary it must be statutory guidance to give landlords and victims of ASB confidence in the process, particularly for victims in HMO properties who live with their abuser.
More support must also be provided by local authorities and the police to deal with anti-social behaviour. The Victims Commissioner’s report on anti-social behaviour has made it clear that victims are not properly supported and more must be done to deal with persistent anti-social behaviour. We want to see the recommendations of this report implemented in full, with local authorities and the police working with private landlords to facilitate possession claims for anti-social behaviour wherever it is appropriate.
Finally, as regards students, the white paper unfortunately has not adopted our suggestion so far, and student tenancies are expected to be treated in the same manner as any other tenancy.
Given the specific time pressures on the student market, this is likely to lead to student landlords considering their position.
With no surety over the length of a tenant’s stay, many student landlords may also be forced out of the market midway through an academic year if tenants leave. In areas with article 4 directions in place, landlords who do relet the property midway through the academic year may be permanently excluded from renting that property to students in the future.
In more positive news, the Government has committed to improving the speed and efficiency of the court system. Although details are relatively light, the white paper sets out key areas for reform , including:
- An online process for possession claims that is due to be completed by 2023;
- Improvements to the recruitment and retention of bailiffs, as well as reviewing their administrative workload to free up more time to attend properties;
- Reducing the time between claim and hearing for cases with the most serious risk of harm, such as cases of anti-social behaviour.
While these are all positive aims, funding is likely to be the key issue. Reducing wait times in court will require significant staffing and investment to ensure claims can be heard in a timely fashion. Given the increased complexity of hearings based on grounds, this needs to be in place before Section 21 is removed. If not grounds based possession hearings risk grinding an already slow system to a full halt.
Share your experience
The Government's proposals’ impact on students and victims of antisocial behaviour is something we will be raising with the Government, and we are very keen to hear from landlords affected by these issues. If you would like to share your concerns or you would be willing to be featured as a case study, then please share your story by emailing us at email@example.com