Selling a buy-to-let property: how can you remove your tenants?

Important note: This article was published on 27 June 2023, before full implementation of the Renters Rights Act 2025. The legal rules for landlord possession and tenant removal have since changed. For up-to-date advice, please contact our residential property solicitors.

Introduction

In the current economic climate, many buy-to-let landlords are struggling to profit from their rentals as interest rates continue to pressure the margins of mortgaged investors.

In the past few weeks, lenders have been pulling back hundreds of buy-to-let deals and readjusting their rates, with the average two-year fixed rate reaching over 6%. 

Those with large mortgages are the most likely to reassess their options, with some landlords now racing to sell. 

This article is part of our mortgage crisis series. If you are selling a buy-to-let property, our solicitors can help you understand the process - including handling the situation correctly with your tenants.

How can you remove your tenants?

To ensure compliance with the regulations established in the Housing Act 1988, landlords need to exercise caution when they require tenants to leave their properties.

In England and Wales, a landlord has two potential options for legally removing tenants living in their buy-to-let property under an Assured Shorthold Tenancy (AST). 

The two options depend on whether it is a no-fault (Section 21) or fault (Section 8) eviction. This article explores the rules and regulations as governed in the Housing Act alongside the proposed upcoming reforms by the government.

The Renters (Reform) Bill, presented by the government, aims to bring about significant changes in the rental market by introducing measures that protect tenants' rights and enhance the quality and affordability of rented accommodation.

The current process for eviction (Section 21 and Section 8)

Before serving a notice, landlords must ensure that they have complied with all legal requirements relating to the formation of a tenancy, such as properly protecting the deposit and complying with the Deregulation Act 2015.

The deposit

The Tenancy Deposit Scheme (TDS) is a government-backed initiative designed to protect tenants' deposits and ensure their proper handling by landlords or letting agents. Under the TDS regulations, landlords and agents are required to protect a tenant's deposit within 30 days of receiving it. 

The main reason for this requirement is to prevent the misuse or mishandling of tenants' money. By protecting the deposit promptly, the TDS aims to assure tenants that their funds are secure and will be returned to them appropriately at the end of their tenancy, subject to any legitimate deductions.

Failing to protect a tenant's deposit within 30 days can have legal consequences for landlords or letting agents in the UK. Firstly, landlords or agents who fail to comply with the deposit protection requirements may be liable to pay financial penalties. The penalty amount can be up to three times the original deposit value. The court determines the specific penalty amount. 

Moreover, if a landlord fails to protect the deposit within the prescribed timeframe, they may lose their ability to serve a Section 21 notice, which is a legal notice often used to regain possession of a property. This restriction may continue until the deposit is protected and certain prescribed information is provided to the tenant.

Tenants have the right to take legal action against landlords or agents who do not comply with deposit protection regulations. They can file a claim in court to seek the return of the deposit, potential financial penalties, and any additional compensation deemed appropriate by the court.

Relevant documents and the Deregulation Act 2015

The Deregulation Act 2015 introduced several requirements for landlords in the UK regarding serving relevant documents on tenants, namely:

1. Prescribed information: When a landlord protects a tenant's deposit in a tenancy deposit scheme, they must provide the tenant with prescribed information within 30 days of receiving the deposit. This information includes details about the scheme in which the deposit is protected, how to get the deposit back, and other relevant information. The tenant must also have been given a reasonable opportunity to review and sign the prescribed information.
    
2. Energy Performance Certificate (EPC): Landlords must provide a valid EPC to tenants before or at the start of a tenancy. The EPC provides information about the energy efficiency of the property.
    
3. Gas Safety Certificate: Landlords must provide tenants with an up-to-date Gas Safety Certificate before they move into the property. This certificate confirms that a qualified Gas Safe registered engineer has checked gas appliances and installations in the property. The landlord must then have a check carried out and produce a Gas Safety Certificate to the tenant every year to ensure the safety of the gas in the property.
    
4. How to Rent Guide: Landlords are required to provide tenants with the latest version of the "How to Rent: The Checklist for Renting in England" guide. This guide informs tenants about their rights and responsibilities throughout the tenancy.
    
5. HMO Licence: Certain HMOs require mandatory licensing from the local authority. The licensing requirements vary across different regions of the UK, so it's important to consult the specific regulations applicable to your area, usually governed by your local council. Generally, larger HMOs (typically with five or more occupants from two or more households) are more likely to require mandatory licensing.
    
6. Proof that all the above documents were served on the tenant: the landlord must be able to illustrate to the court that all of the necessary documents were provided to the tenant before serving the notice.

Section 21

The Section 21 process is a legal procedure that allows landlords to regain possession of their property from assured shorthold tenants. This process is typically used when the fixed term of a tenancy agreement has expired or during a periodic tenancy where no fixed term is in place and the landlord simply wants their property back – such as in a situation where they wish to sell their buy-to-let. The landlord has to overcome particular hurdles when successfully serving a section 21 notice.

Eligibility

To use the Section 21 process, the tenancy must be an AST, and the property should be located in England or Wales. Certain types of tenancies, such as social housing, lodgers, and company lets, are exempt from the Section 21 process.

Serving a valid notice

The next step is to serve a valid Section 21 Notice to the tenant. This notice must be in writing and clearly state the intention to regain possession of the property. It must provide at least two months' notice to the tenant, specifying the date by which they need to vacate the property.

On expiry of the notice

The tenant should legally vacate the property on expiry of the notice. However, if the tenant fails to vacate the property by the specified date in the Section 21 notice, the landlord can apply to the court for a possession order. This involves completing the necessary court forms and paying the applicable fee. The court will then review the case and decide whether to grant the possession order.

If the court grants a possession order, it will specify a date by which the tenant must leave the property. The court may also grant a money judgment for any outstanding rent or other debts owed by the tenant. The possession order is typically enforceable by a county court bailiff, who can physically remove the tenant if necessary.

If there are no issues with the tenancy's formation or maintenance, then the accelerated procedure may allow a landlord to enforce a Section 21 notice without the need for a hearing. If the matter is not straightforward then it may be issued under, or transferred to the standard procedure which shall involve a court hearing.

Enforcement

If the tenant fails to comply with the possession order and vacate the property by the specified date, the landlord may need to request the assistance of a county court bailiff. The bailiff will attend the property and carry out the eviction, allowing the landlord to regain possession.

Section 8

A Section 8 notice is a different legal process from a Section 21 notice. While a Section 21 notice is used when a landlord wants to regain possession of a property without specifying a reason, a Section 8 notice is used when there are specific grounds for eviction. 'Fault' is set out in Schedule 2 of the Housing Act 1988 and the reason for eviction has to come under one of the 17 grounds available, which include:

• Being at least two months in arrears
• Persistently paying rent late
• Anti-social behaviour

Grounds for eviction

A Section 8 notice requires the landlord to provide valid grounds for eviction as specified in Schedule 2 of the Housing Act 1988. These grounds include reasons such as rent arrears, breach of tenancy agreement, anti-social behaviour, or other specific circumstances. The notice must state the grounds being relied upon for eviction.

Notice period

The notice periods for a Section 8 notice vary depending on the grounds being used. Some grounds require a longer notice period, while others may have shorter notice periods or no notice period at all. For example, if the ground for eviction is rent arrears of at least two months, the notice period is typically 14 days. However, for some grounds, such as serious anti-social behaviour, the notice may require immediate possession.

On expiry of the notice

If the tenant does not comply with a Section 8 notice and fails to vacate the property within the specified notice period, the landlord can apply to the court for a possession order. The court will assess the case based on the grounds specified in the notice and determine whether to grant possession to the landlord.

If the court grants a possession order, as with for a Section 21 notice, it will set a date for the tenant to vacate the property. The court may also grant a money judgment for any outstanding rent or other debts owed by the tenant. The possession order is enforceable by a county court bailiff, as explained above.

Upcoming changes to the law – The Renters (Reform) Bill

This article provides an overview of the key provisions outlined in the bill and the government's guidance, highlighting the potential impact on tenants and landlords. 

Ending "no-fault" evictions 

A significant aspect of the Renters (Reform) Bill is the abolition of Section 21 notices, commonly known as "no-fault" evictions. Under the new legislation, landlords will need to provide a legitimate reason to terminate a tenancy, such as rent arrears or breaches of the tenancy agreement. This change aims to provide greater security for tenants, preventing them from being evicted without a valid justification. 

Strengthening security of tenure 

The bill proposes introducing open-ended tenancies, also known as "lifetime tenancies." This means landlords will no longer be able to issue fixed-term contracts with automatic eviction clauses. Instead, tenants will have the right to stay in their rented property indefinitely as long as they comply with the terms of the tenancy agreement. This provision offers tenants greater stability and reduces the uncertainty associated with frequent relocations. 

Enhancing rent controls 

The Renters (Reform) Bill introduces new provisions to improve rent controls, offering more affordable options to tenants. The government's guidance suggests the implementation of three-year tenancy agreements with a cap on rent increases during this period. This measure aims to ensure that rent increases are reasonable and predictable, preventing excessive hikes that may place tenants under financial strain. 

Improving living conditions 

The bill places emphasis on improving the quality of rental accommodations. It introduces minimum property standards to ensure that rented homes meet basic safety and habitability requirements. Landlords will be legally obliged to maintain properties in a satisfactory condition, including addressing issues related to dampness, electrical safety, and overall maintenance. Tenants will have the right to take legal action if their landlords fail to meet these standards. 

Reducing upfront costs 

To alleviate the financial burden on tenants, the Renters (Reform) Bill proposes limitations on upfront costs. The government's guidance recommends capping security deposits and banning letting fees, providing relief for tenants during the initial stages of renting a property. These measures aim to make the rental market more accessible and affordable, especially for individuals and families with limited financial resources. 

The Renters (Reform) Bill signifies a significant shift in the rental market, prioritising the rights and well-being of tenants while seeking to establish a fair and balanced relationship between landlords and renters. By abolishing "no-fault" evictions, enhancing security of tenure, introducing rent controls, improving living conditions, and reducing upfront costs, the government aims to create a more equitable and sustainable rental sector.

As the bill progresses through Parliament, it will be essential to closely monitor its impact on various stakeholders. Balancing the interests of tenants and landlords is crucial to ensure the long-term success of these reforms and foster a healthy and thriving rental market that benefits all parties involved. 

Contact our property solicitors

Whether you're looking to sell a single flat or a portfolio of properties, our solicitors can help. Buy-to-let property sales can be complex, with unique challenges and risks.

Our solicitors and conveyancers are specialists in property law, and our litigation team is on hand for complicated landlord and tenant matters. 

We have offices in Brighton, East Sussex, London, and Cumbria and assist landlords locally and nationally.