Renters’ Rights act 2025, Ground 1A: Charge of the Landlord Brigade – into the valley of decision?

Andrew Martin examines the Forthcoming Renters’ Rights Act 2025, which will abolish assured shorthold tenancies and section 21 notices, and introduce new and amended possession grounds.

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Renters’ Rights Act 2025

Chapter 1 of Part 1 of the Renters’ Rights Act 2025 (RRA 2025) is due to come into force on 1 May 2026. This will, among other changes, abolish assured shorthold tenancies, meaning that it will no longer be possible to end a tenancy by a section 21 notice, make all assured tenancies periodic tenancies with a period of no longer than one month, limit landlords’ ability to increase rent, and amend the notice periods and grounds for seeking possession. It is reported that many landlords are scrambling to serve section 21 and section 8 notices before these measures come into force. Many more will be carefully considering how they might recover their properties once 1 May passes.

The grounds for possession, which are and will still be found in Schedule 2 to the Housing Act 1988 (HA 1988), are amended by section 3(1) and Schedule 1 of the RRA 2025. Perhaps the most significant new ground of possession introduced by these provisions is Ground 1A.

Ground 1A

This will be a mandatory ground of possession and, in essence, provides a right of possession for private landlords who are intending to sell their properties. The wording of the ground in full is as follows:

“Ground 1A

The following conditions are met—

(a) the landlord who is seeking possession intends to sell a freehold or leasehold

interest in the dwelling-house or to grant a lease of the dwelling-house for a term

certain of more than 21 years which is not terminable before the end of that term

by notice given by or to the landlord;

(b) the assured tenancy on which the dwelling-house is let did not come into being

by virtue of any provision of Schedule 1 to the Rent Act 1977 or section 4 of the

Rent (Agriculture) Act 1976;

(c) either—

(i) the current tenancy began at least 1 year before the relevant date, or

(ii) at the relevant date, notice of a compulsory acquisition in relation to the

dwelling-house has been given, the landlord intends to sell their interest in the

dwelling-house to the acquiring authority and the acquiring authority intends to

acquire it;

(d) the landlord seeking possession is not—

(i) a non-profit registered provider of social housing,

(ii) a body registered as a social landlord in the register maintained under section 1 of the Housing Act 1996,

(iii) a body registered as a social landlord in the register kept under section 20(1) of the Housing (Scotland) Act 2010,

(iv) a housing trust, within the meaning of the Housing Associations Act 1985, which is a charity, or

(v) where the dwelling-house is social housing within the meaning of Part 2 of the Housing and Regeneration Act 2008, a profit-making registered provider of social housing.

In paragraph (c)(ii), “sell” includes transfer.

When calculating whether the current tenancy began at least 1 year before the

relevant date, both—

(a) the day when the current tenancy began, and

(b) the relevant date,

must be included in the calculation.”

It is considered that most of these conditions will be unlikely to give rise to serious or common disputes. The focus of a tenant’s challenge to this ground of possession is likely to be on the issue of the landlord’s intention.

Landlord’s intention: redevelopment 

The courts have given extensive consideration to the issue of intention in interpreting section 30(1)(f) of the Landlord and Tenant Act 1954 (LTA 1954), that is, the landlord’s ground of opposition to a new business tenancy on the basis that the landlord intends to demolish or reconstruct the premises. Three elements to intention under section 30(1)(f) emerge from the case law.

The first is that a firm and settled intention is required. In the oft-quoted words of Asquith LJ in Cunliffe v Goodman [1950] 2 K.B 237, the proposal must have “moved out of the zone of contemplation – out of the sphere of the tentative, the provisional and the exploratory – into the valley of decision”. This involves an assessment of the landlord’s subjective state of mind at the date of the hearing.

The second element is that the landlord must satisfy the court that there are realistic prospects of the landlord being able to implement the intended proposals. This is an objective test: it focusses on whether there is a reasonable prospect of the landlord overcoming any hurdles in the way of its intention.

Finally, a third element was recognised by the Supreme Court in S Franses Ltd v Cavendish Hotel (London) Ltd [2019] A.C. 249. The “acid test” set out by Lord Sumption in determining whether the landlord has the requisite intention is whether the landlord would intend to do the same works

if the tenant left voluntarily. The landlord’s intention must exist independently of the tenant’s statutory claim to a new tenancy; it cannot be conditional on whether the tenant choose to assert, and persist in, its claim to a new tenancy.

Given the similarity in the wording of the current Ground 6, it is has been decided in the County Court, although it has not yet been considered in the senior courts, that the cases under section 30(1)(f) are authority for matters to be decided under Ground 6 of Schedule 2 to the HA 1988 (Sugarwhite v Afridi [2002] C.L.Y. 3013). Ground 6 is not being materially amended for these purposes by the RRA 2025, and so it is thought that this will continue to be so.

The question, however, is how and in what way the law on intention in the redevelopment grounds might apply to the new Ground 1A.

Landlord’s intention: sale

In answering the question of how the law on intention might apply to new Ground 1A, it is worth considering the broader statutory context.

It is perhaps unsurprising that the courts have jealously policed landlords’ intentions under section 30(1)(f) of the LTA 1954. There is limited recourse for tenants in the event that landlords do not follow through on their intentions. Section 37A of the LTA 1954 gives a tenant the right to claim compensation from the landlord if the tenancy comes to an end (whether by order of the court or the tenant quitting the holding) by reason of the landlord’s misrepresentation or concealment of material facts. It can be seen that, even if the tenant does have the appetite to launch a claim once their tenancy has ended and they have had to move on, they must establish a case on misrepresentation or concealment. If the landlord has an honest and innocent change of mind, it seems that the claim will fail. Hence, Denning LJ in Fisher v Taylor’s Furnishing Stores [1956] 2 Q.B. 78 CA linked the lack of recourse for the tenant to the need for the courts to insist strictly on the landlord proving their intention:

“It must be remembered that if the landlord, having got possession, honestly changes his mind and does not do any work of reconstruction, the tenant has no remedy. Hence the necessity for a firm and settled intention.”

This is not the case under the RRA 2025. If the landlord changes their mind about selling the property, they cannot simply let the property out again. The new section 16E(2) and (3) provide that the landlord must not let the dwelling-house on a tenancy for a term of 21 years or less, or grant a licence for monetary consideration, or market the dwelling-house (or authorise someone to market it) for these purposes, within the “restricted period“. Under the new section 16M, the “restricted period” will generally begin on the date that the section 8 notice specifying Ground 1A is served and end twelve months after the day which was specified in the notice as the earliest date on which possession proceedings will begin. The notice period required for relying on Ground 1A is four months from the date of service of the notice, under the new section 8(4AA) of the HA 1988 (as inserted by section 3(3)(e), RRA 2025). That means that the landlord will generally be restricted from re-letting the dwelling-house for a minimum period of 16 months from the service of the section 8 notice. Contravening these provisions will be a criminal offence, making a landlord liable on summary conviction to a fine under the new section 16J, or alternatively, a local housing authority may impose a financial penalty on a landlord of no more than £40,000 if it is satisfied beyond reasonable doubt that a landlord is guilty of an offence under section 16J.

While it might well be possible for some landlords to evade detection by granting a lease or licence on an informal basis, the fact that this would be a criminal offence, and the threat of conviction, is likely to prove a powerful deterrent. It might be thought that a landlord proving their intention to sell is less important in light of this. Having said that, it may be that the prohibition in section 16E(2) and (3) ends up having little effect if the claim goes to trial. Currently in the County Court, it is easily possible for a year to elapse between the issuing of a claim and trial. By then, the restricted period would be at an end and there would be nothing stopping a landlord changing their mind and letting the property out again on an assured tenancy.

A further difference between the redevelopment grounds and Ground 1A that may be material to the approach of the courts is the nature of what is “intended”. The second element outlined above, namely whether there are reasonable prospects of the landlord implementing its proposals, has a significance for redevelopment grounds because of the various hurdles that a landlord will have to overcome to implement their intention, such as planning permission and financing. By contrast, one would have thought that, save for exceptional circumstances, most landlords would be able to sell their properties, even if not at the price or in the timeframe that they might like. If this is so, how far (if at all) are the courts going to require landlords to show that there is a realistic prospect of them selling? Will they need confirmation from an estate agent that the property is sellable, or will they have had to have marketed it, or had expressions of interest, or even an offer to buy? Will any of these be necessary to prove the landlord’s (subjective) firm and settled intention? If the courts follow the approach taken to redevelopment grounds, intention will have to be proved at the date of the hearing. While a landlord may have received an offer for the property, this may have been withdrawn if the claim goes to trial and many months have passed in the meantime. Requiring or expecting a landlord to have a sale lined up at the date of the hearing would surely not, then, be a reasonable test of intention.

Finally, it is unclear whether the “acid test” from S Franses would neatly apply to Ground 1A. Ground 1A does not specify that the landlord must be intending to sell for a particular reason. It may well be the case that the very reason why a landlord wishes to sell their property is because they no longer wish to be a landlord. Their intention to sell, then, may well be conditional on whether or not the tenant leaves or stays. If the tenant were to leave voluntarily, they may no longer have the same settled intention to sell, or at least not straightaway. Put another way, if the choice is between keeping their property but the tenancy subsisting, and getting possession but having to sell, they would choose the latter, but given a free choice they might end the tenancy but keep the property. The “acid test” from S Franses may therefore be considered to be inapt. In response it might be said that, unlike extensive redevelopment of a property, it is possible to sell an interest in a dwelling-house subject to an assured tenancy. Ground 1A, however, has been provided for landlords so that they have the opportunity to sell their properties in what are considered more favourable circumstances, that is, with vacant possession. On this basis, landlords should only be able to avail themselves of Ground 1A if, come what may (including the tenant leaving voluntarily), they intend to sell.

So, drawing the above points together, what is the test for intention that the courts might apply under Ground 1A?

It seems likely that the first two elements found in the section 30(1)(f) test will also be applied for Ground 1A. Notwithstanding the prohibition on re-letting in the restricted period, a landlord can expect to be required to prove the existence of a firm and settled intention. Absent this, Ground 1A could simply become a rubber-stamping exercise for landlords wanting to obtain possession, which runs counter to the purpose of the RRA 2025.

Further, as rare as it may be that a dwelling-house is unsellable or a landlord is unable (for whatever reason) to sell it, one would think that the courts would want to be satisfied that selling the property is objectively realistic, albeit that this part of the test will not carry as much significance as it does for the redevelopment grounds.

What of the “acid test” from S Franses? It may be that this test is simply unnecessary in this statutory context. Whereas a landlord of a business tenancy may use the redevelopment ground cynically to gain possession, a landlord of an assured tenancy under the new regime in the RRA 2025 has little to gain. If they do not genuinely intend to sell, they will be unable to generate any rental or licence income from it lawfully. In those circumstances, it seems likely that the courts will not police the motive and purpose behind the landlord’s stated intention so closely.

When will the “current tenancy” be taken to have begun?

When will we see this put to the test in the courts, then?

One of the conditions for relying on Ground 1A – condition (c)(i) – is that “the current tenancy began at least 1 year before the relevant date”. The “relevant date” will generally mean the date specified in the section 8 notice (see new Part 5, Paragraph 12, Schedule 2, HA 1988).

Landlords may be wondering when “the current tenancy began” in respect of tenancies that subsist at the date that Chapter 1 of Part 1 comes into force. Put another way, will a new section 4A assured tenancy arise upon this Chapter coming into force, which will replace the tenancy then existing, or will that existing tenancy continue, but on new terms? The answer appears to be the latter. Under section 146(1) of the RRA 2025:

“The commencement of Chapter 1 of Part 1 (which, in particular, has the effect that, on the commencement date, an existing tenancy becomes a section 4A assured tenancy) does not affect the continuation of an existing tenancy on and after the commencement date (as a section 4A assured tenancy that is subject to the other provisions of that Chapter)”.

In this section, an “existing tenancy” means “an assured tenancy which is entered into before the commencement date” (section 146(3)). The explanatory notes to the RRA 2025 confirm this too. At paragraph 918, they state that this subsection has been included to prevent any interpretation that the transition of an existing tenancy into a section 4A assured tenancy is such a significant change so as to end the tenancy. Further, for the purposes of Chapter 1 of Part 1 and section 146, a fixed term assured tenancy and a statutory periodic tenancy that arises upon expiry of the fixed term are to be treated as a single assured tenancy which was entered into when the fixed term tenancy was granted (section 147(1)-(2)). Taking these together, it appears that the “current tenancy”, for the purposes of Ground 1A, began when the tenancy was first granted, whether as a fixed term tenancy that later became periodic, or as a periodic tenancy. On this basis, there should be nothing stopping landlords serving section 8 notices relying on Ground 1A as soon as it comes into force, in respect of tenancies which were initially granted more than a year before the relevant date (which must, of course, be at least four months after the service of the section 8 notice).

This article was first published in the Practical Law’s Property Litigation Column here.