Along with a number of other changes to the private rented sector including the scrapping of section 21 notices, the Government has announced that a new ground for possession will be available for landlords who wish to evict their tenants if they intend to sell their property. At the moment, there are various ways in which a landlord can obtain possession of their property through the existing Section 8 and Section 21 notice procedures. Where a landlord wants to serve a section 8 notice they must demonstrate that one of the grounds for possession applies. Currently, there is no specific ground for obtaining possession in relation to a sale of a property.
Current Procedure to recover possession
At the moment, landlords who intend to sell their properties can serve a section 21 notice on their tenants. Some landlords may wish to inform their tenants of their intentions to sell a property so that a notice seeking possession does not come as a surprise to the tenant, but when giving a section 21 notice the landlord does not need to give any reason to their tenant.
However, this process can be complicated. There are various requirements that a landlord has to satisfy before serving a valid section 21 notice on the tenant, including the need to ensure that a valid gas safety certificate, Energy Performance Certificates and How to Rent Guides were served on the tenant and if a deposit was acquired, it was protected by the landlord or their agent with a Government-backed deposit protection scheme.
This can often make it difficult for landlords or cause substantial delay in obtaining possession of a property particularly if any of the prescribed requirements have not been complied with prior to the service of a section 21 notice. It is therefore anticipated that the proposed new ground will remove any difficulties associated with the current section 21 possession procedure where the landlord wishes to sell their property.
The Government’s Proposals
Some details about how this new ground might work were published last week. The Government’s response to a consultation on the abolition of section 21 notices provides a summary of how the new ground would work. The ground would be a ‘mandatory’ ground meaning if it applies, the court dealing with a landlord’s possession claim must order the tenants to leave the property. The amount of notice landlords have to give would be two months, and in almost all circumstances, notice could not be given in the first 6 months of a new tenancy. To prevent misuse of the ground, the response says: “We will prevent the original landlord marketing and reletting the property for 3 months following the use of this ground.”
What evidence is required and is there a possibility that landlords may misuse this process?
It is not clear what evidence will be required to prove a sale of the property. The White Paper makes reference to the landlord “intending” to sell a property and it could be that a landlord may only have to demonstrate their intentions by showing that the property has been marketed for sale by an estate agent. However, this could potentially lead to a misuse of the new ground – some landlords might regard this ground to be the easier option in getting possession and falsely serve a notice citing this ground, but they may then take their properties off the market once a possession order is made.
The White Paper does state that “misuse of the system or any attempt to find loopholes will not be tolerated” and the Government will look to extend the “power for councils to issue Civil Penalties Notices for offences relating to the new tenancy system”. Therefore, it is likely that the Government will introduce additional penalties or strengthen existing penalties for landlords who abuse this procedure. Landlords will still be subject to the rules relating to contempt of court where they have commenced a court claim for possession but dishonestly signed a statement of truth.
This details of this proposed new ground for possession will become clear when the draft text of the Renters Reform Bill has been published and it is interesting to see how the drafters of the Bill attempt to prevent abuse of this ground. We also wait to see what restrictions will be imposed on landlords when relying on this ground and the extent of evidence required to bring a successful claim.