The Renters’ Rights Bill (the Bill) will have major implications for landlords and tenants of residential property. It is currently at the report stage, meaning there is one more reading in the Commons before the Bill starts its journey in the Lords. This reading is due to take place in mid-January 2025. Although there has been no official confirmation, the government previously indicated that the Bill will become law by Summer 2025.
Under the Bill, Assured Shorthold Tenancies (ASTs) will cease to exist and anything purporting to create a tenancy for longer than a 28-day period will not be legally enforceable. All tenancies will become periodic with the tenant permitted to end the tenancy at any time with 2 months’ notice, meaning that tenants will no longer be tied to a fixed period (typically six to twelve months).
Abolition of No-Fault Eviction (s21 Housing Act 1988)
At present, section 21 of the Housing Act 1988 allows a landlord to end an AST without a reason, a so-called ‘no-fault eviction’. This will no longer be an option available following the Bill. Unless a s21 notice has been served before the Bill comes into force, this right will be lost overnight.
The Bill retains various grounds upon which a landlord can obtain possession of the property, some mandatory, others discretionary. Landlords should note, however, that several of these grounds require a longer notice period than the two months required under s21. There are also new grounds for possession, including for occupation or sale, that cannot be used within the first 12 months of a tenancy, creating a 12-month protected period for tenants but not for landlords.
Currently, if a tenant does not vacate the property after a s21 notice has expired, landlords can use an accelerated court procedure to obtain possession, meaning that the court can make a possession order without a court hearing. Under the Bill, if the tenant does not vacate after a notice of possession has been served, then the court will fix a hearing before it grants a possession order; this is likely to mean that it will take a lot longer for landlords to obtain a possession order, and they will need to prove in all cases that they satisfy the grounds for possession set out in the notice.
Transitional Period
The Bill includes a period of transition for landlords that have already served a s21 notice before the ‘Commencement Date’. This date has yet to be confirmed, but this could be the date when the Bill receives Royal Assent in the law-making process.
Under the transitional period, landlords that have served a s21 notice will have, at most, 3 months from the Commencement Date to begin possession proceedings at court; it might be less depending on when the notice was served. This means the court proceedings need to be drafted, submitted, and issued by the court to avoid being time barred. As currently drafted, it is suggested that it may not be enough to send the proceedings to the court but rather they need to have been accepted and processed by the court.
Given the limited window of time in which landlords that have served s21 notices will have to commence possession proceedings once the Bill comes into force, we expect there to be an increase in the volume of new claims within that three month period. The court system is already experiencing lengthy delays in processing new claims and will come under additional strain once the Bill passes.
Should a landlord have already served a s21 notice, it would be advisable to commence proceedings as soon as they are able in order to ensure that the court processes their claim within the transitional period. Any landlords who are contemplating serving a s21 notice should ensure they do so in good time before the Bill comes into force to avoid losing the right to do so.
Timing is everything, and our property litigation specialists are on hand to provide guidance to landlords on how they can utilise s21 before the Bill becomes law.
