Shared owners may be exempt from 12-month no re-let rule

The government has introduced new guidance that may exempt shared owners from the 12-month no re-let restriction under the Renters’ Rights Act. This development provides clarity on subletting permissions and selling grounds for shared ownership properties, affecting landlords, agents, and shared owners alike.

Exemptions for Shared Owners on the No Re-let Rule

Under the Renters’ Rights Act, landlords who regain possession of a property using the selling ground (Ground 1A) are typically subject to a 12-month “no re-let” period, during which they cannot market or re-let the property. However, new government guidance published recently reveals that shared owners may qualify for an exemption from this restriction.

Shared ownership involves individuals owning a share of a property through a shared ownership scheme and renting out all or part of their home, usually with permission from the housing provider or under lease terms. The exemption recognises the unique position of shared owners within the framework of the Renters’ Rights Act.

Notice Requirements for Ending Subletting Permissions

The guidance also introduces a requirement for landlords to provide at least six months’ notice before ending permission to sublet. This applies to permissions that start on or after 1 May 2026, as well as existing permissions set to end on or after 1 December 2026. This extended notice period aims to provide shared owners and tenants with greater certainty and time to make alternative arrangements.

Should court action become necessary to recover possession, shared owners are advised to maintain communication with their landlord. The guidance suggests that permission to sublet should be extended until the legal process concludes, ensuring that tenants are not unfairly displaced during proceedings.

Criteria to Qualify for the Exemption

To benefit from the exemption from the 12-month no re-let rule, shared owners must meet specific conditions outlined in the guidance. They are required to inform prospective tenants in writing, prior to agreeing a tenancy, that they are shared owners and that the 12-month restriction may not apply.

Additionally, shared owners must notify their shared ownership provider in writing before the end of the possession notice period of their intention to sell. Before marketing or re-letting the property, they must either obtain a valuation from the Royal Institution of Chartered Surveyors (RICS) or advertise the property for sale, for example, through an estate agent.

These steps ensure transparency and compliance with the Renters’ Rights Act while facilitating the sale or re-letting of shared ownership properties.

What this means for landlords

For landlords and agents managing shared ownership properties, the new guidance clarifies the legal landscape around subletting and possession. The six-month notice period for ending subletting permissions provides a clear timeframe to plan for tenant transitions, reducing potential disputes.

Moreover, understanding the exemption criteria for the 12-month no re-let rule is crucial when dealing with shared owners who intend to sell or re-let their properties. This knowledge allows landlords and agents to advise shared owners accurately, ensuring compliance and smoother management of shared ownership tenancies.

Overall, these changes reflect a more flexible approach to shared ownership within the Renters’ Rights Act, balancing the rights of tenants with the practicalities faced by shared owners and their landlords.

Source: Based on reporting from Property118

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