Possession proceedings reimagined—new grounds and tighter restrictions

The Bill amends the existing statutory grounds for possession under Schedule 2 of the Housing Act 1988. While some grounds are expanded to offer new routes to possession (such as for landlords wishing to sell or move in), additional conditions and evidential burdens are imposed to prevent misuse. This means that, whilst it is likely that landlords will not find themselves short of potential grounds to rely upon, obtaining a possession order may prove a more expensive and time-consuming process than is currently the case. 

The reforms seek to make the anti-social behaviour and nuisance ground a more effective tool for seeking possession. This reflects growing pressure to address nuisance tenants while maintaining procedural fairness, in circumstances where the traditional landlord practice is to serve a section 21 notice. Whilst the expanded ground is likely to be used much more often in future, it remains to be seen how well-equipped landlords and their agents will be at evidencing the serious harm that can be done by anti-social tenants. Building a successful case will remain very challenging and landlords, particularly those with limited means, may conclude that they do not wish to bear the risk of a claim being unsuccessful. There is therefore a real risk that individuals who suffer anti-social behaviour from their neighbours will no longer be able to expect the neighbours’ landlord to serve a section 21 notice to recover possession. 

Changes are also proposed to the notice periods required before bringing possession proceedings. These will vary depending on the ground relied upon, with a particularly significant change being introduced relating to serious rent arrears. Once the law changes, a landlord whose tenant does not pay the rent, will be unable to rely upon the mandatory ground for seeking possession, until the tenant has fallen the equivalent of three full months’ behind with the rent (in place of two months under the existing rules). In addition, the landlord will at that point have to serve a notice giving not less than four weeks’ notice of an intention to issue proceedings to seek possession (in place of two weeks under the existing rules). 

The cumulative effect of this is that a landlord will be unable to start a court claim seeking possession until the tenant is four months in arrears of rent. Faced with such a scenario, there may be landlords who are unable to sustain such pressures on their cash flow and who will fall behind on their buy to let mortgage. Whilst the changes appear to assist tenants in the short term, there are risks for them too. So-called rogue landlords may take the law into their own hands, rather than follow due process. Other landlords may in fact seek possession (in a lawful manner) using discretionary grounds far earlier than they would have done under the existing rules, as they may conclude that there is little to be gained from waiting until a tenant is three months’ in arrears before beginning the process. 

Landlords and their agents need to understand the new and expanded grounds for possession. They will also need to adopt a more strategic approach to regaining possession in light of section 21 no longer being a fail-safe that is available. It seems likely that there will be greater reliance on documentation and correspondence to support claims for possession where discretionary grounds are the only option. Landlords and agents who keep detailed records will be better equipped to take action under the new regime than those who have a less disciplined approach. 

Landlords need to be prepared for claims seeking possession to take longer due to more substantive court hearings and trials being necessary. As a consequence, they need to ensure they are not financially stretched so that they can withstand the delays and increased costs that are coming if they have to engage with the new system for recovery of possession. 

Well-advised landlords will keep an open mind to compromise and negotiation. More often than at present, where possession is required, it will be commercially sensible to reach an agreement with a tenant that leads to a mutually acceptable outcome.  

These reforms elevate the importance of planning and early legal advice. In the new regime, preparation will be critical to successful possession claims.

Partner Stephen Small is in the property litigation team, acting for both landlords and tenants and advising on all aspects of commercial, residential and mixed use property related disputes.