Renters’ Rights Act - MHCLG Response

On behalf of our members we contacted the MHCLG regarding the Renters' Rights Act, and we will continue to liaise especially with regard to the ability of tenants to operate break options.

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In the meantime - this is the response received:

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Thank you for your correspondence of 13 April regarding the Renters’ Rights Act.

I appreciate how important this matter is to you and I am grateful to you for taking the time to write.I have asked my officials to address your concerns in the letter appended.

Please be assured that I am conscious of the matters you have raised, and I appreciate the insight your correspondence provides.

I hope the attached response suitably addresses your enquiry. If that is not the case, please do not hesitate to let me know.

Best wishes,

MATTHEW PENNYCOOK MP

Minister of State for Housing and Planning

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Thank you for your letter setting out the views of Lush and the Property Managers Association on
the interaction between the Renters’ Rights Act reforms and mixed-use commercial properties. I
appreciate you taking the time to raise these issues.

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The Government recognises the importance of mixed-use buildings in supporting town centres and
understands the complexity of arrangements where residential tenancies sit beneath superior
commercial leases. In designing the Renters’ Rights Act, we have sought to balance greater security
for renters with the need for landlords to regain possession where there is a clear and justified
reason to do so.

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Where an intermediate landlord’s superior lease comes to an end, in many cases the tenancy will
revert to the superior landlord, who then becomes the landlord of the assured tenant. In those
circumstances, the superior landlord will be able to rely on the possession grounds that apply to
their situation, for example where they wish to sell the property or undertake redevelopment.
Ground 1A applies where a landlord is seeking possession in order to sell the property or grant a
long lease of it; it does not apply simply because an intermediate landlord’s superior lease is coming
to an end. In such cases, where the tenancy reverts, it is the superior landlord who may rely on the
possession grounds available to them.

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The Act also includes specific superior landlord possession grounds, but these are deliberately
restricted to parts of the sector where they are most needed. This approach ensures that vital
sectors operating under superior letting arrangements can continue to function without breaching
vacant possession requirements, while preventing misuse by landlords seeking to create false or
artificial leasing structures to circumvent the new tenancy system. We do not believe tenant security
of tenure should be undermined through wider or more permissive use of such grounds.

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More broadly, the Act removes section 21 and replaces it with a clearer, more structured set of
possession grounds, ensuring landlords can regain possession where there is a compelling reason, such as selling or redevelopment, while providing tenants with longer notice periods and greater
certainty where they are not at fault.

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In addition, Paragraph 28 of Schedule 6 of the Act ensures that where a lessee has sublet a
property, the sublease has become a relevant assured tenancy by virtue of Part 2 of Schedule 6,
and the lessee is unable to return the dwelling-house to the lessor at the end of the lease free of the
relevant assured tenancy, this will not constitute a breach of the lease.

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We recognise that some arrangements will require careful management as the new system beds in.
The Department will continue to monitor how the reforms operate in practice and to engage with
stakeholders across the sector to ensure the legislation works as intended.
Thank you for taking the time to write.

Yours sincerely,
ROSS MCINNES

Deputy Director, Private Rented Sector

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