Social Housing Speed Read – Notice periods and rent arrears

In this speed read we outline the new regulations and detail how they will impact landlords seeking possession. We also take a look at the recent research commissioned by the National Residential Landlords Association regarding rent arrears.

Notice periods

The regulations were published on 28 August 2020 and came into force on 29 August 2020. This means that the following notice periods will apply to notices served on (or after) 29 August 2020 but do not apply to notices served prior to this date.

Housing Act 1985 (Secure Tenancies)

• Ground 1: if the tenant is in rent arrears for at least 6 months and no other grounds are relied upon by the landlord (other than grounds 2ZA, 2A or 5), 4 weeks’ notice must be provided.
• Ground 2: if the landlord proposes to rely on ground 2 (which typically regards nuisance, annoyance and using the dwelling for illegal purposes) there is no notice period.
• Grounds 2ZA, 2A and 5: respectively, these grounds relate to indictable offences which take place at a riot, domestic violence and false statements made in relation to a tenancy. In these circumstances, the landlord is required to provide 4 weeks’ notice.
• Other Grounds: if the landlord proposes to rely on any other ground (and in the case of flexible tenancies), the landlord must provide 6 months’ notice.

Housing Act 1988 (Assured and Assured Shorthold Tenancies)

• Section 21: the landlord must provide a minimum of 6 months’ notice. We note that the period in which possession proceedings may be brought has been extended to 10 months from the date of service.
• Section 8: subject to the exceptions (outlined below), the landlord must provide 6 months’ notice. The exceptions are outlined as follows:
  • Grounds 8, 10 or 11: if the rent arrears are less than 6 months, the landlord must provide 6 months’ notice.
  • Grounds 8, 10 or 11: if the rent arrears are not less than 6 months (and no other ground is relied upon), the landlord must provide 4 weeks’ notice.
  • Ground 7: in the event that the previous tenant has died and the current tenant has inherited the tenancy, the landlord must provide 3 months’ notice.
  • Ground 7A: if legal action has been taken against the tenant for anti-social behaviour, the landlord must provide 4 weeks’ notice for a weekly tenancy or if the tenancy is monthly, one month notice is required.
  • Ground 7B: if the tenant does not have the right to rent, the landlord must provide 3 months’ notice.
  • Ground 14: the landlord is not required to provide a notice period.
  • Grounds 14A, 14ZA and 17: the landlord is required to provide 2 weeks’ notice, provided that no other grounds are relied upon.

Introductory and demoted tenancies

• If the landlord proposes to seek possession by reason of anti-social behaviour, the landlord is required to provide 4 weeks’ notice.
• For any other reason, 6 months’ notice is required.

Whilst clarity regarding the new notice periods is welcome, the legal framework is changing on a weekly, if not daily, basis and as such, the notice periods outlined above may be further amended. It is also possible that the Government may announce a further extension to the current stay on possession proceedings, which is currently due to expire on 20 September 2020.

Rent arrears

The extension of the stay of possession proceedings and the new notice periods (outlined above) will, inevitably, impact landlords; particularly those who have a number of tenants who have fallen into rent arrears. As the Coronavirus Job Retention Scheme is also due to end in October; we are likely to see a new wave of redundancies and financial hardship.

The National Residential Landlords Association (“NRLA”) recently commissioned a survey regarding the number of tenants who have fallen into rent arrears as a result of the Covid-19 pandemic. Whilst the research considers private tenants, rather than those occupying social housing, the research provides an interesting insight into the impact of Covid-19.

The research found that 87% of tenants, who participated in the survey, have paid their rent as usual throughout the pandemic. A further 8% of tenants had made arrangements with their landlord regarding their rent, such arrangements included agreeing to pay a reduced rent or obtaining a rent-free period.

The research demonstrates that, within the private rental market, the large majority of tenants are continuing to pay their rent as usual or alternatively, are constructively engaging with their landlords in order to reach a suitable compromise.

If you have any questions on the above and how it will affect social housing providers, or any other questions as a social housing provider, please do not hesitate to contact John Murray or a member of our expert Social Housing Team.