Serving Section 8 Notices: How Much Do the Arrears Need to Be?
In this week’s blog, we explore three different legal justifications that can be used for gaining possession of a property due to rental arrears. We also look at a proposed change in the Rental Reform Bill.
If a tenant falls into rent arrears, then a landlord may consider serving a Section 8 Notice to obtain possession of the property. Other grounds can also be included in the notice but if the landlord is seeking to recover possession on the grounds of rent arrears, then the following grounds would typically be used:
- Ground 8 – rent arrears of more than two months.
- Ground 10 – some rent is outstanding regardless of the amount.
- Ground 11 – persistently late rental payments.
Ground 8
This is a mandatory ground, which means if the arrears exceed two full months at the date of the hearing, then the judge must award a possession order. Schedule 2 of The Housing Act 1988 outlines the amount of rent that needs to be outstanding to satisfy ground 8:
At both the date of the service of the notice under section 8 of the act relating to the proceedings for possession and at the date of the hearing –
(a) if rent is payable weekly or fortnightly, at least eight weeks’ rent is unpaid;
(b) if rent is payable monthly, at least two months’ rent is unpaid;
(c) if rent is payable quarterly, at least one quarter’s rent is more than three months in arrears; and
(d) if rent is payable yearly, at least three months’ rent is more than three months in arrears; and for the purpose of this ground “rent” means rent lawfully due from the tenant.
Ground 10
If the arrears are less than two full months, then it is the judge’s discretion whether possession is granted. In practice, if a tenant clears the arrears before the hearing the judge will often give them an opportunity to remain in the property, especially if this was a one-time occurrence.
Ground 11
If the tenant has a poor payment history, then the judge may grant possession under Ground 11. Therefore, the landlord should provide evidence of the tenant’s payment history with a sufficiently detailed rent schedule.
The purpose of Ground 11 is to give landlords the ability to regain possession when a tenant consistently defaults on payments but manages to clear the arrears just before the hearing. Although this is a discretionary ground, if the tenant is a serial offender, then this holds more weight to persuade the judge to grant possession.
Proposed changes under the Renters Reform Bill
Among the proposed changes outlined in the Renters Reform Bill is the introduction of a new mandatory ground – Ground 8A – specifically addressing repeated rental arrears.
For this ground to apply, there must have been rental arrears exceeding two months (or eight weeks) on at least three separate occasions within a three-year period before the notice can be served.
Note: “Separate occasions” means three distinct instances where the arrears have gone below two months (or eight weeks) between each occurrence.
Whilst the three-year period seems to be quite excessive and could be perceived as fairly harsh as a mandatory ground, we will wait to see how the reforms change as they undergo further scrutiny through Parliament.
If you are a landlord and have any questions about possession, Woodstock Legal Services will be more than happy to help on contact@woodstocklegalservices.co.uk.
