Using the New Sale of Property Ground: What Landlords Need to Know

On 01 May 2026, the Renters Rights Act 2025 will introduce the most significant change to residential possession law in a generation. 

While the Act abolishes section 21 notices, it also establishes a new framework of statutory grounds for possession. Amongst these additions is the new ‘Sale of Property’ ground (Ground 1A1) which allows landlords to seek possession where they intend to sell their interest in the property. 

Under the new rules, landlords will be required to demonstrate a genuine intention to sell in order to rely on Ground 1A. Although the Act does not prescribe the form this evidence must take, landlords should expect that some indication of a real and settled decision to sell may be expected. There is no requirement for the sale to complete; the statutory test concerns the landlord’s genuine intention at the time the notice is served.

Before serving notice, landlords must also ensure that the tenancy has run for at least one year2. In addition, any deposit taken from the tenant must be correctly protected in a government approved scheme and the relevant prescribed information served3. 

Once these requirements are met, a section 8 notice must be served, followed by a possession claim if the tenant does not vacate.

Financial Penalties and Misuse 

One of the fundamental risks to using the new Sale of Property ground is the severe penalties that may be ordered against landlords in the event of misuse of the new grounds. 

There are several requirements for these penalties to apply. The landlord has, within twelve months of the date of service of the notice, let the property to another for a term of less than 21 years, licenced or re-marketed the property4. The penalty will only be issued if the tenant has moved out of their own accord within four months of the notice being served5 and no possession order has been granted6. 

If a landlord is found to have misused the grounds for possession, and the tenant has vacated as a result of the misuse, the local authority may issue a financial penalty in the maximum sum of £7,000.007.

What does this mean for you?

The penalties for misuse mean that landlords should not serve notice unless they have a genuine intention to sell. Any later decision to re-let or re-market the property may expose the landlord to enforcement action and financial penalties.

In practice, this means landlords will need to plan ahead, ensure their compliance position is sound, and take care when preparing and serving notices. The new regime is more complex than the previous no-fault system. Professional advice is therefore essential to ensure that notices are valid, risks are managed, and the possession process is handled correctly from the outset.

With the abolition of section 21 and the introduction of a more regulated possession system, landlords will need to adapt quickly. The Landlord Group can help landlords assess their position, manage risk, and ensure they are fully prepared for the new requirements.

Bibliography

1 Renters Rights Act 2025, Schedule 1, Section 3, Ground 1A

2 ibid

3  Renters Rights Act 2025, Section 26

4 Renters Rights Act 2025, Section 13

5 Renters Rights Act 2025, Section 15

6 ibid

7 ibid