Shared ownership leases under the Renters' Rights Act

The implementation of the Renters' Rights Act (the Act) on 1 May 2026 brings a significant change to how landlords must treat properties let via shared ownership leases. 

Social landlords may not yet be familiar with the provisions of the Act as its implementation has been delayed for low cost rental accommodation. This includes accommodation let below market rent and made available to people whose needs aren't met by the commercial housing market.

However, properties let through shared ownership leases won’t benefit from this delay. Shared ownership schemes are classed as low cost home ownership rather than low cost rental accommodation as lessees own a proportion of the property either outright or with the assistance of a mortgage. This means that landlords must be aware from the outset of the changes that the Act makes to the Housing Act 1988 and how these apply to shared ownership leases. 

This article explains the changes in more detail, highlights some of the key pitfalls that landlords need to be aware of and suggests ways to avoid them.

Shared ownership leases excluded from assured tenancies

Section 31 of the Act introduces a new paragraph into Schedule 1 of the Housing Act 1988. As a result, the list of tenancies that can’t be assured tenancies now includes long leases. This is likely to capture properties let via social landlords’ shared ownership schemes. 

The practical effect is that landlords can no longer rely on Richardson v Midland Heart Ltd [2008] L.&T.R. 31 to pursue possession on Housing Act 1988 grounds or to treat a shared ownership lease as an assured tenancy. From 1 May 2026, the route to seeking possession is via forfeiture.

Forfeiture replaces possession and the rules are different

Different rules apply to forfeiture proceedings, particularly in relation to the grounds on which a landlord may seek possession. 

There are also significant differences when it comes to required processes before possession can be recovered that landlords must be aware of, including:

• Different notice requirements and notice periods under the section 8 regime.
• Different rules in relation to rent arrears and the amount of arrears that must be accrued.
• Whether anti-social behaviour or issues with the property condition can amount to grounds for forfeiture, which will depend on how covenants in the lease itself are drafted.
• Requirements to serve a notice on a leaseholder's mortgagee.
• Requirements to allow time for breaches of covenant to be remedied.

Key considerations for social landlords

Landlords should familiarise themselves with the forfeiture procedure for recovering possession of a property and consider the following:

1. The current drafting of leases and whether existing possession clauses are now incorrect or irrelevant.
2. Reviewing policies and procedures in readiness for pursuing forfeiture rather than possession proceedings, while continuing to comply with the Pre-Action Protocol for Possession by Social Landlords.
3. Updating template warning letters to reference the new procedures.
4. Understanding and complying with the various notice requirements associated with seeking forfeiture.
5. Implementing systems to prevent accidental waiver, including reviewing standard or automated correspondence.
6. Ethical considerations in relation to a potential windfall if forfeiture is used as a remedy.

Zoe Conroy is a Senior Associate at Brabners.