Whilst our previous article summarises the changes occasioned by the introduction of the Renters’ Rights Act 2025, of particular interest is the changes to the mandatory grounds for possession, including the new sales ground (Ground 1A).
Landlords can rely on Ground 1A if they wish to sell their property and the current tenancy began at least 1 year before the date upon which notice will be served. The ground does not specify that the landlord must be intending to sell for a particular reason.
Where the tenancy subsists at the time of the new legislation coming into force, the commencement date of the tenancy is the “original” start date, ie when the tenancy started as an Assured Shorthold Tenancy, not when it converted to an Assured Periodic Tenancy.
A landlord will need to serve a minimum of 4 months’ notice which should expire on or after the 12 month anniversary of the tenancy.
If the tenant does not vacate on expiry of the 4 months’ notice, then a landlord will need to apply to Court to obtain a possession order.
As this is a new ground, we have not yet seen what a judge will consider when deciding to make a possession order. However, we anticipate that a landlord will need to demonstrate a “real and settled intention” to sell the property which will include, at the very least, correspondence with estate agents, potentially entering into a contract with an estate agent, as well as putting the house on the market. Judges may want to see that the property is on the market but given the length of time that matters take to reach trial, there is a real risk that if a sale is agreed, a buyer may withdraw if they have to wait a significant time before a possession order is obtained.
If the landlord decides not to sell, and the tenant has vacated, they cannot simply re-let the property. They are prevented from re-letting the property for a period of 12 months commencing after the day which was specified in the Section 8 notice as the earliest date when possession proceedings can begin. This means that a landlord cannot relet the property for 16 months after the date of the Section 8 notice if they change their mind.
The cost of contravening the provisions of the Renters Rights Act 2025 are high. If a landlord re-lets a property in breach of these provisions, it is a criminal offence and a landlord can be fined up to £40,000.
If landlords wish to recover possession using Ground 1A, they are now able to, provided that it is more than 12 months since the tenancy commenced.
We shall wait with interest to see how judges decide these matters, and what evidence they are requiring, when they are heard in the County Court and will report on interesting judgments in future property litigation newsletters.
