Renters’ Rights Bill: Proposed grounds for possession in a rural context

The Renters’ Rights Bill (Bill) gives greater rights and protections to those renting their homes. In September, we set out the key proposals from the Bill (see Renters’ Rights Bill: a new era for residential tenancies). Following the Bill’s second reading we now focus on the grounds for possession and consider whether these proposals will be sufficient for rural lettings.

Mandatory grounds

As with the previous Conservative Government’s Renters’ (Reform) Bill, there are a number of mandatory and discretionary grounds for possession that are set out in Section 8 of the Bill.

Mandatory grounds are those which, if met, must result in a judge awarding possession. With discretionary grounds, a judge will grant possession only if it is reasonable to do so. There are certain mandatory grounds which are likely to be of particular interest to agricultural landlords and tenants:

Superior lease: Grounds for possession available for agricultural landlords where the superior lease (such as the FBT or the AHA tenancy) ends, or where the superior landlord becomes the tenant’s direct landlord and seeks to take possession (Ground 2ZA and 2ZB). Four months’ notice to the tenant is required.

Agricultural worker: Ground for possession if the property is required for occupation by an agricultural worker (Ground 5A). The landlord must be directly employing the agricultural worker. Two months’ notice is required.

Employment: Ground for possession when an employment contract ends, if the dwelling was let out as a result of the tenant’s employment by the landlord and the employment has come to an end, or if the tenancy was not intended to last for the duration of the employment and the dwelling is required by a new employee (Ground 5C). Two months’ notice is required.

Notably, the above grounds for possession do not apply if the current occupier falls under an Assured Agricultural Occupancy (AAO).

Under the proposed Bill, there will be a mechanism to avoid creating an AAO (equivalent to the existing Form 9 notice). Landlords can serve an opt out notice in advance of the agricultural worker taking up occupation, and thereby avoid the risk of creating an AAO with security of tenure for the occupier.

Further notable mandatory grounds include:

Landlord’s family: Occupation by the landlord or the landlord’s family (Ground 1). This ground may only be used after the first 12 months of the tenancy and at least four months’ notice to the tenant is required.

Sale: Sale of the dwelling-house (Ground 1A). Again, this ground may only be used after the first 12 months of the tenancy and four months’ notice to the tenant is required.

Sale by mortgagee: Sale of the dwelling house that is subject to a mortgage, and the lender exercises their power of sale requiring vacant possession (Ground 2). Four months’ notice is required.

Redevelopment: The landlord wishes to demolish or substantially redevelop the property (Ground 6). The landlord must prove that the works cannot be done with the tenant in occupation. This ground may only be used after the first six months of the tenancy and four months’ notice is required.

Enforcement: The landlord is subject to enforcement action (such as by a Local Authority or the Firsttier Tribunal) and needs to regain possession to be compliant (Ground 6A). Four months’ notice is required.

Death of tenant: Death of the tenant (Ground 7). Possession proceedings must begin no later than 12 months after the date of death or the date that the landlord became aware of the death. Two months’ notice is required.

Rent arrears: The tenant has at least three months’ (or 13 weeks) rent arrears at the time the notice is served and at the time of the possession hearing (Ground 8). Four weeks’ notice is required.

Notable discretionary grounds for possession are:

Suitable alternative accommodation: This is available to the tenant (Ground 9). Two months’ notice is required.

Persistent rent arrears: The tenant is in any amount of rent arrears or persistently is late in paying their rent (Ground 10 and Ground 11). Four weeks’ notice is required.

Tenancy breach: The tenant has breached the terms of the tenancy agreement (not including a failure to pay rent) (Ground 12). Two weeks’ notice is required.

Deterioration to dwelling: The tenant has caused a deterioration in the condition of the property, or a deterioration in the furniture (Ground 13 and Ground 15). Two weeks’ notice is required.

Note: that the grounds detailed above are not an exhaustive list.

Under the new Bill, the courts will not be able to award possession under any Ground, except Grounds 7A and 14 (anti-social behaviour), unless the landlord has protected the tenant’s deposit.

Issues for rural businesses

There is concern that the proposed grounds under the Bill do not go far enough to meet the needs of rural landlords, many of whom need to supply accommodation to their employees. Organisations like the CLA are continuing to lobby the Government to widen the proposed grounds to better encompass the often-seasonal needs of rural businesses and to reflect the challenges that they can face. For example, they propose extending the new ground for incoming agricultural workers to a wider range of employees, such as those in hospitality.

The CLA are also lobbying for the inclusion of two further grounds to protect rural landlords adequately:

• “Persistent refusal by the tenant to allow the landlord (or their agents) access for statutory inspections (e.g. gas and electrical safety) and related compliance works”; and
• “The property is required to house an outgoing agricultural worker that the landlord has a statutory duty to house and who is being moved to suitable alternative accommodation”.

Moreover, although the agricultural worker ground is interesting, difficulties could arise where dwellings are not owned by the business employing the tenant. It is fairly common for different parts of a farm or estate to be held by different individuals or legal entities. We will have to see if this ground is widened to provide sufficient flexibility to allow for this.

The Bill is still in its infancy. It needs be approved by MPs and peers, who may propose further changes, before it becomes law. In its current draft, it is a good indication of the direction of travel for residential lettings, especially in view of the size of the Government’s majority in the House of Commons. For those affected by the Bill it’s a case of watch this space!