Stamp Duty Land Tax – Mixed Use update
Jack Keats | 28.10.2019
29.10.2019 Anita Symington
The Government has issued a Consultation Paper entitled “A New Deal for Renting”, seeking views on how to implement its decision to abolish Section 21 of the Housing Act 1988 and to improve the implementation of Section 8, grounds for repossession. It concentrates specifically on the circumstances in which landlords should be able to regain possession of residential properties once Section 21 has been abolished and the assured shorthold regime has ended.
Since assured shorthold tenancies became the default position under the Housing Act 1988, most private-sector residential tenancies became Assured Shorthold Tenancies (ASTs). The ability for landlords to serve a section 21 notice outside of an original fixed term left tenants with limited options to challenge the notice to leave, and gave landlords, both urban and rural, great flexibility in regaining possession of a property, even in the absence of fault on the part of a tenant. Under the proposed new regime, the ability to serve a Section 21 notice would be abolished and new discretionary grounds would be added to the current list of grounds in Schedule 2 of the Housing Act 1988. These would include the need for a member of the landlord’s family to live in the property and for the landlord to sell the property. These rights would only be available after two years of a fixed term, however, and there would be no ground permitting a landlord to gain possession if they wanted to develop the properties. Other grounds for possession might also cover rent arrears, antisocial behaviour and domestic abuse.
The reforms are not proposed to be retrospective so there would be a transitional period where Section 21 could be used to end existing ASTs.
In the context of agricultural tenancies, there could be issues where tenant farmers have sublet farm cottages (often surplus to requirements and with the consent of the head landlord) particularly where there is a possibility of the head agricultural tenancy coming to an end in the future, either by notice to quit from the landlord or by the tenant surrendering his or her holding. The Report considers the latter by asking if there should be a mandatory ground for possession where the tenant surrenders the head tenancy but does not cover the situation where the landlord serves a notice to quit on the head tenant. In this situation the AST could become a head tenancy. Landlords will therefore need to consider very carefully, in future, provisions in Farm Business Tenancies and succession tenancies under the Agricultural Holdings Act 1986 permitting tenants to sublet surplus cottages.
Moore Blatch has responded fully to the Consultation paper to Government