The Ever-Moving Target: Changes to Notice Periods for Private Residential Tenancies

1st September 2020 Commercial Litigation

Yet again the government picked Friday evening, before a bank holiday weekend, to make changes to the possession process for residential property. This was the, widely expected, change to the notice periods for section 8 and 21 notices, which I am going to focus on as well as notice periods for other residential tenancy types which are mainly for the social sector. The change is made by regulations made under powers given in the Coronavirus Act 2020. These regulations were actually made on the Thursday, put before Parliament on Friday, and came into force on Saturday. So by the time you read this they are already in effect. This kind of, almost stealth, change is not really helpful or sensible and adds to an already high level of confusion in the sector as to what rights landlords and tenants have. It is also a complex set of changes to I am afraid this is a bit of a long read!

Unchanged Items

Let’s deal with things that have not changed first. Residential licences and tenancies that have no statutory protection (non-Housing Act tenancies, company lets etc) are totally unaffected by this. These occupancies never derived any protection from the Coronavirus Act and still do not. They were only ever protected by the court stay which is why the government had to scramble to get it into place initially. Therefore, these occupancies will remain protected by the stay until 20 September and their protection after that will depend on what the ongoing stay looks like. The other thing that does not change is existing notices. Anyone who had already issued a notice that was deemed served before Saturday falls under the regime that existed up until that point. So s21 notices in England served on Friday 28 August 2020 would be three month notices while those served on Saturday 29 August would be six month ones.

Changes to Section 21

So what does change? Well, as I indicated above s21 notices are now longer. These notices are normally two calendar months, that extended to three calendar months with the introduction of the Coronavirus Act 2020 and has now been extended to six calendar months. The six-month notice period for s21 no longer ends on 30 September and now extends until 31 March 2021 in England. Therefore s21 notices are now six month notices until next spring. The use it or lose it provision in relation to s21 notices which meant that proceedings had to be issued within six months of service of notice has also been amended so that proceedings must be issued within ten months of service of notice, restoring the four month time to take action after notice expiry.

This change brings up some interesting issues. First, Wales has a six month notice provision for s21 notices but that is due to end on 30 September. Presumably they will act quickly now to extend that until next March as well. Secondly, the use of the Coronavirus Act powers is a surprise. There was no clearly stated power in the Act to make a change to the s21 six month “use it or lose it provision” and so most people (including me) thought that this change would need to wait for primary legislation. Clearly the government felt otherwise. I assume that the government felt that the general power which allows it to make “supplementary, incidental [or] consequential” provisions allowed it to make this change as the movement to a six month notice was impossible otherwise. However, there is normally a great deal of reluctance to use secondary legislation to make these kind of changes without very explicit authority in the primary legislation. Certainly, my experience of the Theresa May government was that they would have been very unlikely to do this. I assume the argument from the government would be that Parliament must have always intended this as the Coronavirus Act explicitly allowed s21 notice periods to extend to six months and that could never have been done without an amendment to the “use it or lose it provision”. However, this was never discussed in Parliament and some Parliamentarians may feel that this is more power than they truly intended to give the executive. It may also give pause to Brexit watchers as it is indictive of a more aggressive approach to modifications to primary legislation through secondary legislation (so called Henry VIII powers) than would have been adopted by previous administrations.

Changes to Section 8

Section 8 notices are also subject to change. This is much more nuanced (and complicated!) as different grounds get different changes. Under the original provisions different grounds for possession had different notice periods, usually clustered around two weeks or two months but with a couple of notable exceptions. The Coronavirus Act made the notice period for any ground 3 months. We are now moving back to a position where notice periods vary for certain grounds, although the majority of grounds will now move to a six month notice period.

Where a landlord is relying on an Anti-Social Behaviour ground, that is grounds 7A or ground 14 the notice period will now be rest to the original Housing Act 1988 time periods. That is one month for ground 7A and no notice at all for ground 14. Ground 7A is a mandatory ground for possession but generally requires the tenant (or some other person residing in or visiting the property) to have been convicted of an anti-social behaviour offence or some other relatively serious disorder offence. Ground 14 is a discretionary ground and requires the tenant or an occupier to have caused a nuisance or annoyance to their neighbours, the landlord or the landlords agent. Ground 14 is more powerful than it used to be after amendments made by the Anti-social Behaviour, Crime and Policing Act 2014 and is effective where a tenant is obstructing the landlord or their agent unreasonably.

It is also worth noting that where ground 14 can be reasonably made out it shortens the notice period for other grounds that are on the same notice. So if a landlord was also seeking possession under ground 1 to live in the property again (normally two months’ notice, now increased to six months) and also could show that there was anti-social behaviour under ground 14 they could give an immediate notice (which is the new ground 14 notice period) and then go to court. This cannot be used where no evidence exists and it is a trick to avoid notice periods but it can be used where there is a case to answer, even if the court is not ultimately persuaded to make a possession order under ground 14.

For rent arrears the notice period depends on whether or not six months’ rent is unpaid at the time the notice is served. So if six months or more rent is unpaid then for grounds 8, 10 and 11 the notice period is just four weeks whereas if less than six month’s rent is unpaid then the notice period is six months. This will be a boost to some landlords who may feel that their tenants are unreasonably refusing to pay rent that they might actually be able to afford, at least in part. There is also a potential benefit in waiting a short period to let arrears accrue to greater than six months to allow for a shorter notice period. Notably, the decision point on notice periods is the date the notice is served, so if the rent arrears are then reduced the notice period does not get longer.

There are also a few other, less used, grounds that get shorter notice periods. Ground 7 for situations where a tenant has died and ground 7B where a notice has been served by the Home Office stating that the tenant has no right to rent stay at three months’ notice. Ground 14ZA for convictions during a riot and ground 17 for giving false references drop back to two weeks’ notice.

Other than the grounds specified above every other ground moves to six months’ notice.

So to summarise:

Ground                                                           Notice Period

1 to 6 inclusive                                                six months

7                                                                      three months

7A                                                                    one month

7B                                                                    three months

8 (less than 6 months arrears)                       six months

8 (more than 6 months arrears)                     4 weeks

9                                                                      six months

10 & 11 (less than 6 months arrears)             six months

10 & 11 (more than 6 months arrears)          4 weeks

12 & 13                                                            six months

14                                                                    no notice

14A                                                                  two weeks

14ZA                                                                two weeks

15 & 16                                                            six months

17                                                                    two weeks

The Stay

None of this alters the current court stay. So, court proceedings remain stayed until 20 September. It is completely unclear on what basis the stay will be lifted and there is no guarantee at all that the stay will be lifted in such a way as to match these changes. So, for example, just a week ago the government was indicating that it would partially lift the stay for rent arrears of over twelve months in September, but these notice changes are for rent arrears over six months which suggests that the stay might also be lifted for rent arrears over six months. Equally it might not be and landlord who have rushed to serve notices based on these changes might be disappointed.

Conclusions

This is the new position this week. Whether it is the position next week remains to be seen. I have largely given up making predictions at this stage as they all seem to be wrong or, at least, overtaken by changes in thinking in government. However, I have noted some suggestions among tenant advisors that the government might later say that the move to six months’ notice on s21 has worked so it can be kept on that basis. That is a possibility but it cannot happen under the Coronavirus Act which ultimately has sunset provisions included within it which will bring it an end in 2022 unless explicitly extended (and the government would need very good reasons). So, if there is to be a change in policy involving keeping s21 but with longer notice periods that will need some other primary legislation to make it happen.

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David Smith is a Partner located in Londonin our Commercial Litigation department

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Neli Borisova is a Solicitor located in Londonin our Commercial Litigation department

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