Renters’ Rights Act 2025 – impact on shared ownership leases

The Renters’ Right Act 2025 has now received Royal Assent, with key provisions coming into force on 27 December 2025. One of the most significant changes is the reclassification of shared ownership leases, fundamentally altering how landlords can seek possession. 

The current position 

In accordance with the decision in Richardson v Midland Heart Ltd [2008] L & TR 31, shared owners who have not staircased to 100% ownership are treated as holding a fixed term assured tenancy under the Housing Act 1988. As a result, landlords can serve a section 8 notice of seeking possession under schedule 2 of the 1988 Act and issue possession proceedings in the event of a breach of the lease, such as rent arrears. Save that, if the security of the assured tenancy is lost, the landlord would need to follow a forfeiture process. 

What’s changing?

From 27th December 2025, the Housing Act 1988 will be amended so that any fixed term tenancy exceeding 21 years can no longer be an assured tenancy, and will instead be classified as a long lease. 

This will also apply to fixed term tenancies of 7 – 21 years granted before, or in the two months after, 27 October 2025.  

Impact on landlords – forfeiture replaces Section 8 

After 27 December 2025, landlords will no longer be able to serve a section 8 notice to seek possession, and instead will need to rely on forfeiture. Forfeiture allows a landlord to terminate a lease following a breach of covenant, but there are strict procedural requirements that must be met, and this can often be complex. It is therefore strongly recommended that legal advice is sought. 

In summary, landlords must:

• Ensure the lease contains a re-entry (forfeiture) clause.
• For non-rent arrears type breaches, landlords must obtain a determination from the First Tier Tribunal or County Court that a breach has occurred. Alternatively, a leaseholder can admit to a breach. 
• Serve a section 146 notice at least 14 days after the determination, allowing reasonable time for the breach to be remedied (if capable of remedy).
• If the breach is not remedied, commence forfeiture proceedings to seek a possession order. 

For rent arrears, a different process applies.

• The landlord must serve a notice, in the prescribed form, confirming the sums due.
• Once expired, a grace period will usually apply for a time period specified in the terms of the lease.
• Forfeiture proceedings can then be issued to seek a possession order.

Avoiding waiver of the breach

A key consideration for landlords when pursuing forfeiture is to ensure you avoid the risk of waiving the breach. Any action that may acknowledge the lease as continuing will invalidate the landlords right to forfeit. For example, accepting rent from the leaseholder, or sending rent demand correspondence requesting payment. 

It is also important to differentiate between the types of breaches. 

• Once and for all breaches (e.g. arrears, sub-letting, or refusal of access) cannot be relied upon once waived. 
• Continuing breaches (e.g. breach of repairing obligations or anti-social behaviour), arise fresh each day and therefore can survive any waiver defence. 

Alternatives to forfeiture 

In situations where possession is not the primary goal, or forfeiture is not an option, landlords can also consider alternative legal remedies.

• Money judgment claims for ground rent or service charge arrears. If successful and funds are still not received, enforcement options can include bankruptcy, attachment of earnings orders, or a charging order followed by an order for sale of the property.
• For breaches relating to anti-social behaviour, social landlords can utilise their powers to seek an injunction order in accordance with the Anti-Social Behaviour Crime and Policing Act 2014.
• Specific performance injunctions for covenant breaches such as failure to carry out repairs. Judges do have discretion to make an order and therefore there could be lengthy defended proceedings with no guarantee of an order being made and the potential for adverse costs. This process could also waive the breach if the breach is remedied.
• Other informal resolutions such as formal warnings, rent repayment agreements (ensuring these are carefully drafted), or damages claims for any financial losses incurred by the landlord as a result of the leaseholder’s breach. 

Transitional arrangements

For any existing possession proceedings against shared owners that are reliant on a section 8 notice already served, the lease will remain an assured tenancy until the conclusion of those proceedings. 

Any section 8 notices validly served prior to 27 December 2025, where possession claims have not yet been issued, can also be relied upon (as long as the NoSP remains within the 12-month validity period at the time of issue). 

Practical tips for landlords 

The Renters Rights Act represents a significant shift for shared ownership leases, and landlords should ensure that they are prepared for the changes by:

• Reviewing internal enforcement policies and procedures to reflect forfeiture procedures.
• Implement systems to prevent accidental waiver, including halting correspondence with the leaseholder. This should include ensuring any automatic correspondence is not sent, including arrears chasers and section 20 consultation letters.
• Update standard breach letters to reference enforcement by forfeiture rather than a section 8 notice. 
• For any current breaches, particularly rent arrears, act promptly and serve any section 8 notices before 27 December 2025 where appropriate. 

The upcoming changes mark a clear shift in how shared ownership is treated, bringing it closer aligned with home ownership rather than the rental sector. As a result, shared owners may feel better protected by the rules of forfeiture, and landlords must adapt to the impact of the changes which will include potentially lengthier, and more legally technical, routes of enforcement. Preparation will be key to navigating the changes effectively. Please contact our team if you need any support in managing these changes within your organisation.

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