The Renters Rights Act: A new landscape for lenders and insolvency officeholders

The Act abolishes the use of Section 21 “no-fault” eviction notices and ends the regime of fixed-term assured shorthold tenancies (ASTs). All existing and future ASTs will convert to periodic (rolling) tenancies. This means that, from 1 May 2026, landlords—including receivers, administrators, and liquidators acting as landlords—will only be able to recover possession of a property by relying on specific grounds set out in Section 8 of the Housing Act 1988, as amended by the Act.

Section 8 will become the sole statutory route for regaining possession. The Act expands and amends the grounds for possession, introducing new mandatory and discretionary grounds, and increasing notice periods for most grounds to four months. For lenders, receivers, administrators, and liquidators, this means:

• No more “no-fault” evictions: possession can only be sought where a specific ground applies (e.g. rent arrears, sale by mortgagee, owner occupation, major renovation, or unlawful tenancy).
• Higher evidential thresholds: the party seeking possession must provide robust evidence to the court to substantiate the ground relied upon.
• Longer notice periods: most grounds now require at least four months’ notice to be given to the tenant before proceedings can be issued, significantly extending the timeline for recovery.

The Act simplifies the existing “Ground 2” (sale by mortgagee) for possession. Under the new regime:

• The mortgagee (or receiver, administrator, or liquidator acting on their behalf) can serve a Section 8 notice to recover possession for the purpose of sale, regardless of whether the mortgage pre-dates the tenancy.
• There is no longer a requirement for the tenant to have been notified at the start of the tenancy that this ground might be relied upon.
• The notice period for this ground is four months, and court proceedings cannot be commenced until this period has expired.

While these changes remove some technical barriers, they do not accelerate the process. The abolition of Section 21 means that even mortgagees and their agents must now navigate the more complex and lengthier Section 8 process, with its attendant evidential and procedural requirements.

The Act introduces a new ground for possession where it is unlawful for the landlord to continue the tenancy, such as where a HMO licence has been revoked or refused, or where enforcement action has rendered the tenancy illegal (e.g. due to overcrowding). This is particularly relevant for receivers, administrators, and liquidators who may inherit properties with compliance issues and the resulting financial impacts of these. 

A major innovation under the Act is the introduction of the PRS Database—a digital register of private rental properties and landlords in England , expected to launch in late 2026. All relevant landlords will be legally required to register themselves and their properties. We note the following key points:

• There is a restriction on gaining possession where the landlord and property are not registered; the court may not make a possession order in such circumstances.
• IPs taking an appointment as a trustee in bankruptcy will need to exercise particular caution, as they will become the registrable landlord on appointment. It is not yet clear whether receivers or other insolvency officeholders will be required to register personally on the database once appointed.
• While in most cases the identity of the landlord will not change following the appointment of a receiver or officeholder, it remains to be seen how the secondary legislation bringing the database into effect will address this. At the very least, IPs and receivers will need to ensure contact details for the landlord are updated to ensure correspondence reaches the correct address.

Even if not required to register personally, receivers, administrators, and other insolvency practitioners where dealing with a company with residential properties at the very least will have to update contact details for the landlord company following their appointment to the Receiver's or office holder's address.

Receivers, administrators, and liquidators appointed over companies that are residential landlords must:

• Protect tenant deposits in a government-approved scheme.
• Ensure compliance with property safety standards, including gas safety, electrical safety, and energy performance.
• Act as the primary contact for repairs, maintenance, and rent collection.
• Provide tenants with required documentation and notifications, including notice of their appointment.

Failure to comply with these obligations may result in tenant defences, compensation claims, or regulatory penalties, and may delay or invalidate possession proceedings.

A significant change under the Act is that the absence of a Gas Safety Certificate (GSC) or Energy Performance Certificate (EPC) will no longer invalidate a Section 8 notice for possession. While these documents remain legal requirements, their absence will not prevent a valid Section 8 claim. However, non-compliance may still result in separate penalties, so receivers, administrators, and liquidators must still ensure all safety obligations are met.

All ASTs will convert to periodic tenancies, giving tenants the right to end the tenancy at any time with two months’ notice (aligned with rent payment dates). Importantly, for the first 12 months of a new tenancy, landlords cannot seek possession on the grounds of sale or owner occupation (except for the mortgagee possession ground). This creates a “protected period” during which receivers, administrators, and liquidators cannot obtain vacant possession for these reasons unless acting under the mortgagee ground.

The combined effect of these reforms is to lengthen the timeline for recovering possession and realising value from tenanted properties. Key impacts include:

• Slower evictions: Section 8 proceedings are more complex and time-consuming than the former Section 21 process, often involving court hearings, adjournments, and evidential disputes.
• Constraints on marketing: Properties may need to be marketed with tenants in situ, limiting the pool of potential buyers to investors willing to take on existing tenancies.
• Re-letting prohibition: Where possession is obtained on the grounds of sale or owner occupation, the property cannot be re-let for 12 months, potentially leaving it empty if a sale falls through.
• Tenant departure risk: Tenants can give two months’ notice at any time, creating uncertainty over rental income and cash flow during the recovery process.

For receivers, administrators and liquidators, these factors may complicate asset realisation strategies, impact valuations, and affect distributions to creditors.

The new regime places a premium on robust record-keeping and procedural compliance. Receivers, administrators, and liquidators must:

• Maintain detailed tenancy records, including start dates, rent payments, deposit status, and compliance with safety requirements.
• Gather and preserve evidence to support any Section 8 claim (e.g. formal marketing of the property for sale, evidence of owner’s intent, documentation of unlawful tenancy issues).
• Ensure all notices are correctly served and all statutory requirements are met to avoid delays or invalidation of proceedings.

The Act does not alter the statutory powers of fixed charge receivers under the Law of Property Act 1925, nor the powers of administrators and liquidators under the Insolvency Act 1986. However, it does mean that all such officeholders must exercise their powers in compliance with the enhanced tenant protection regime. There is no “grandfathering” or exemption for insolvency practitioners; they face the same hurdles as any landlord.

The reforms are expected to shift bargaining power towards tenants and may reduce the attractiveness of tenanted properties to investors. Practical implications include:

• Lower capital values: Properties sold with secure, long-term tenants in place may command lower prices than vacant properties, as buyers factor in the difficulty of regaining possession
• Reduced investor demand: Some buy-to-let investors may exit the market or avoid properties with sitting tenants, particularly where possession is likely to be protracted.
• Rental growth constraints: The move to periodic tenancies and restrictions on rent increases (limited to once per year and subject to tribunal challenge) may limit rental yield growth.
• Regulatory risk: The Act increases penalties for non-compliance with landlord obligations, and lenders or insolvency officeholders may be exposed to fines if their agents breach the new rules.

The Act marks a paradigm shift in the regulation of the private rented sector and all stakeholders should act now to review their processes, update their documentation and prepare for the new landscape in order to mitigate the risks and challenges posed by the Act. Get ahead of the curve by undertaking these 6 practical steps:

• Review and update enforcement protocols, mortgage deeds, and appointment documents to ensure alignment with the new legal framework.
• Conduct thorough due diligence on tenancy arrangements before and during enforcement or insolvency proceedings.
• Maintain comprehensive records of all tenancy-related matters, including compliance with deposit protection, safety certificates, and statutory notifications.
• Prepare for longer possession and sale timelines in cash flow and valuation models.
• Consider targeting buyers who are willing to acquire properties with tenants in situ or who can wait out notice periods.
• Seek specialist legal advice on complex or high-value cases to ensure compliance and minimise the risk of challenge.