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The Renters’ Rights Bill is about to revolutionise residential landlord and tenant law like never before. In our article, “The Renters’ Rights Bill: the What, When and Why,” we dive deep into the game-changing reforms this Bill brings to the private rented sector. Here, we shift our focus to uncover how these changes will impact lenders and receivers appointed in respect of tenanted properties.

Abolition of No-Fault Evictions and New Eviction Process

The Renters’ Rights Bill abolishes Section 21 “no-fault” notices and ends fixed-term ASTs, converting all tenancies into rolling periodic tenancies. Landlords (and thus fixed-charge receivers acting as landlords) must now obtain possession only on specific Section 8 grounds. Receivers cannot simply evict a paying tenant on two months’ notice; they must prove a valid ground (e.g. rent arrears, landlord sale, owner-occupation, renovation) in court.

The Bill expands mandatory grounds – for example a new ground allows possession for a planned sale or landlord move-in – but imposes higher notice requirements (typically four months) and tenant protections (see below).

Happily, for lenders and receivers the existing ‘Ground 2’ (sale by mortgagee) has been simplified. This allows for a landlord/receiver to serve a section 8 notice where the mortgagee wants to sell the property with vacant possession.  It will no longer be a requirement that the mortgage was granted before the start of the tenancy and there is no longer a requirement for the tenant to have been given notice that this ground might be relied upon before the tenancy was granted.

There will also be a new specific ground to allow a landlord/receiver to serve a section 8 notice where it is unlawful for them to maintain the tenancy due to enforcement action e.g. overcrowding or the revocation or refusal of an HMO licence (a situation we often see on properties where lenders have had to appoint a receiver).  Receivers need to be wary, however, as the court can grant the tenant compensation which a lender would likely need to fund; but this may be better than financial penalties for breaching the legal requirements.

In practice, the abolition of no-fault evictions means eviction proceedings will be more complex and often longer. For a receiver this entails:

• No more Section 21: Receivers must rely on Section 8. This raises the bar for eviction. A borrower’s tenant who is paying rent and not breaching other terms may be immune from eviction, tying the property up as an ongoing let.

• Expanded Section 8 grounds: New mandatory grounds (e.g. Property Sale, Landlord/Family Occupation, Major Renovation) allow sale-based evictions, but only after notice (generally 2–4 months) and only after an initial protected period (below).

• Higher notice and proof requirements: Many mandatory grounds now require four months’ notice and proof at a court hearing. For example, the mandatory arrears ground now requires at least 3 months’ unpaid rent (up from 2 months) and 4 weeks’ notice. This slows down repossession: processes that took 8–10 weeks will likely take many months.

These changes substantially increase legal risk for receivers and lenders. Failing to identify and prove a correct ground (and serve the proper notice) will delay eviction or invalidate proceedings. Receivers must now gather robust evidence (e.g. formal sale marketing, notice of owner’s intent) for any Section 8 claim and plan for longer court timetables.

Gas Safety Certificate, Deposits and EPCs

Another practical advantage that the Renters Reform Bill brings for receivers is that landlords will not be required to have supplied a tenant with a Gas Safety Certificate (GSC) or an Energy Performance Certificate (EPC) in order to serve a valid Section 8 notice for possession. This marks a significant departure from the current prerequisites for issuing a Section 21 “no-fault” eviction notice, which the new legislation will abolish.

While the new legislation will carry over some existing landlord obligations into the updated Section 8 process, the requirements concerning GSCs and EPCs will not be among them. Currently, a landlord cannot issue a valid Section 21 notice if they have not provided the tenant with these crucial safety and energy efficiency documents.  This can make it very difficult for receivers appointed over properties that have been poorly managed by the borrower and don’t have these documents in place.  Similarly, at present a section 21 notice cannot be served where the landlord is in breach of HMO requirements, which can potentially put a receiver in a “catch-22” situation; the new section 8 grounds will specifically allow for eviction where it is unlawful for the tenancy to continue (such as because an HMO has been revoked or refused).

However, the requirement for landlords to protect a tenant’s deposit in a government-approved scheme will be retained as a prerequisite for serving a valid Section 8 notice under the new rules.  As will the requirement for landlords to join the new Digital Private Rented Sector Database.

This change means that while landlords will still be legally obligated to provide tenants with GSCs and EPCs at the start of a tenancy, a failure to do so will not, in itself, invalidate a subsequent Section 8 notice. Instead, such a failure would remain a breach of separate regulations, potentially leading to financial penalties for the landlord.

Receivers (and mortgagees in possession) must continue to comply with their legal obligations to provide GSCs and EPCs to avoid separate penalties, but they will not be a barrier to initiating eviction proceedings under the reformed Section 8 process. Tenants, in turn, will need to be aware that the absence of these certificates will not be a defence against a valid Section 8 notice.

Periodic Tenancies and Notice Requirements

All ASTs convert to periodic (rolling) tenancies overnight. Tenants gain new flexibility and security: they can end the tenancy at any time by giving two months’ notice (aligned with rent payment dates). Importantly, during the first 12 months of a new tenancy the landlord cannot evict on the sale or move-in grounds – this creates a protected period when receivers cannot force vacant possession to sell or occupy (although it does not apply to the mortgagee possession ground, so if it’s the mortgagee intending to sell that can work). After 12 months, these grounds become available (with notice) but any tenant evicted on these grounds cannot be re-let for at least another 12 months.  So if a property fails to sell then it could be left empty for a long period of time.

For receivers this means:

• Guaranteed initial term: In effect, every tenancy has a de facto 12-month minimum. A receiver cannot use the “sale” or “owner occupation” grounds during that year. If a property is re-tenanted within a year of appointment, the receiver must wait 12 months before regaining possession for sale or personal use.  But, note this does not apply to the sale by mortgagee ground.

• Tenant exit risk: Because tenants may give 2 months’ notice anytime (after as little as 6 months – the Bill does not impose a longer lock-in), a tenant could vacate unexpectedly. The Law Society notes landlords are concerned that tenants can “leave at a very early stage and the rental income … will cease”. If a receiver depends on rental income to service the loan, a sudden vacancy can hurt cash flow.

• No rent review shortcuts: All tenancies being periodic means rent can only be increased once a year by formal notice. Any previously negotiated rent-review clause or renewal is void. This limits flexibility in adjusting yields.

These tenancy reforms could slow down or complicate receivership. Properties will typically remain occupied (and hopefully generate rent) longer before a receiver can clear them. A receiver must track tenancy start-dates closely to know when each “protected period” ends and plan timing of Section 8 notices accordingly.

Authority and Duties of Fixed-Charge Receivers

The Bill does not alter the statutory power or standing of fixed charge receivers under the Law of Property Act 1925. A receiver still has the rights conferred by the mortgage deed (e.g. to collect rents and sell) and acts as agent of the borrower (mortgagor). Importantly, on appointment the receiver “automatically assume[s] the landlord’s legal duties to the tenant”. In other words, receivers are treated as the landlord for all tenancy purposes. In practice they must:

• Comply with landlord obligations: Just like any landlord, receivers must honour deposit protection rules, licensing, contractual repairs and upkeep, gas/EPC certificates, etc. (These duties were reinforced by the Deregulation Act 2015 and will continue.) If a receiver fails to meet these duties, a tenant could raise defences or claims that delay possession.

• Exercise possession rights via the mortgagor’s name: Legally, receivers exercise a power of sale or possession in the mortgagor’s name under LPA 1925 s.109(2). Courts have held that a properly appointed receiver with sufficient powers can obtain possession of a tenanted property. The Bill does not change that principle, but it removes one of the practical tools (Section 21 notices) that receivers previously used.

• Notify tenants of appointment: Although not specified in the Bill, good practice (and sometimes lender security documents) require notifying tenants of the receiver’s appointment. Tenants should be told to pay rent to the receiver. Compliance with formalities (e.g. sending notice to tenant’s address) remains important to avoid disputes over rightful landlord status.

In summary, receivers retain their general authority to manage or sell the charged property, but execution now requires strict compliance with the enhanced tenant-protection regime. There is no grandfathering advantage for receivers – they face the same eviction hurdles as any landlord under the new law.

Impact on Receivership Proceedings and Sales Timelines

The combined effect of these reforms will typically lengthen possession and sale timelines in a receivership. Key impacts include:

• Slower evictions: Contested Section 8 proceedings take longer than the former “two-month paperwork” of a Section 21. Mandatory hearings, adjournments and evidence-gathering can add months. Receivers must allow for extended legal processes in their recovery timetable.

• Constraints on marketing: If a tenant remains in place, the receiver (and lender) may only market the property subject to the tenancy. Auction or sale brochures will note that any sale is likely to an investor who will need to honour the tenancy or wait out notice periods. In practice, many lenders try to achieve vacant possession before sale, so the new restrictions translate into longer hold periods.

• Re-letting prohibition: The Bill explicitly forbids landlords from re-letting the property for 12 months after serving a sale or owner-occupation notice. This means that if a receiver evicts a tenant on the ground of selling the property, the buyer cannot immediately re-let it. In effect, repossessed homes will often be sold either with no sitting tenant or to owner-occupier buyers. Investors accustomed to turning over a buy-to-let quickly may offer less or avoid these properties.

• Tenant departure risk: Because tenants can terminate on 2 months’ notice at any time, a receiver risks a sudden vacancy. This “downturn” risk can leave a mortgaged property empty, accelerating the need to sell at potentially low prices to stop carrying costs.

Professional commentary anticipates that many small-scale landlords may exit the market due to the increased complexity. For lenders, this suggests a tightening of investor demand for repossessed homes. Sales will likely take longer and achieve lower prices. Lenders and receivers should update their valuation models and cash-flow forecasts to account for: multi-month possession delays, empty-period carry costs, and possibly deeper discounts for assured tenancy-protected properties.

Investor Expectations and Market Impact

The reforms shift bargaining power toward tenants, which will affect buyers and investors of repossessed properties. Practical implications include:

• Lower capital values: Properties sold with secure, long-term tenants in place may command a lower price than comparable vacant properties. The inability to quickly regain possession makes portfolios of such homes less attractive. Lenders should expect tighter haircuts on loans secured by tenanted homes.

• Buyer pool shift: Many buy-to-let investors rely on assured shorthold tenancies with short notice. Under the new rules, some may focus on properties where tenants are likely to leave (e.g. student lets with known end dates) or consider alternative strategies (e.g. selling to holiday-let or commercial operators).

• Rental growth: Even if a sale to an investor proceeds, the ongoing restrictions (annual rent review, no bidding) could constrain rental growth. Buyers will be aware that annual rent increases are capped at market levels and tenants can challenge them at tribunal.

• Regulatory fines risk: Lenders who fail to ensure their appointed receiver adheres to the new ban on unfair practices (e.g. accepting above-asking bids, or unlawful fees) may face regulatory fines. The Bill doubles penalties for non-compliance, so seller disclosures and letting practices must be checked.

Industry reports (e.g. local government commentary) warn of housing supply impacts: fewer rentals may come to market and some landlords may quit altogether. This could further depress investment yields. Lenders should factor in these market sentiment changes when setting provisions and advising investors on risk.

Practical advice for lenders/receivers:

• Review mortgage deeds and receiver appointment documents to confirm that enforcement protocols align with the new law.

• On appointment, inventory tenant files: know the tenancy start-date, rent amount, deposit status, and compliance with requirements.  Ensuring proper and thorough due diligence is carried out on the tenancy arrangements in respect of the secured asset before the loan is entered into and that records are maintained throughout the life of the loan.

• If eviction is needed, prepare strong evidence for the chosen ground (e.g. formal sale listing if using the “Property Sale” ground).

• Maintain compliance with all landlord obligations (EPC, gas safety, deposit scheme) to avoid tenant-defences.

• When planning sales, consider targeting buyers who can carry the tenancy short-term or wait out notice periods.

Overall, the Bill does not strip receivers of their statutory powers but significantly alters the exercise of those powers. Lenders and receivers must adjust their legal strategies and timelines to mitigate the heightened eviction and tenancy risks introduced by these reforms.

For further information or assistance please contact Emma Wells, or a member of our Property Litigation team.

This update is for general purpose and guidance only and does not constitute legal advice. Specific legal advice should be taken before acting on any of the topics covered. No part of this update may be used, reproduced, stored or transmitted in any form, or by any means without the prior permission of Brecher LLP.