A tiny part of the Renters’ Rights Act 2025 has significantly changed the status of Shared Ownership Leases with implications for how landlords deal with arrears and other breaches. This blog sets out the changes made and what landlords now need to do when taking enforcement action. 

Before the Renters’ Rights Act 2025 came into force, Shared Ownership Leases were treated as assured tenancies (unless/until the shared owners had fully staircased to 100%). This meant that if there were arrears or other breaches of tenancy, the landlord would serve a section 8 notice of seeking possession based on one of the grounds for possession and pursue possession through the courts as you would for an assured tenant. 

Now, Section 31 of the Renters’ Rights Act 2025 has amended the legal definition of an assured tenancy to exclude leases of seven or more years. This provision came into force on 27 December 2025. This means that Shared Ownership Leases can no longer be considered assured tenancies. For enforcement purposes, they are now to be treated in the same way as long leases.

There are some transitional arrangements in section 31 (5). If a possession claim relying on a section 8 Notice of Seeking Possession (NOSP) was issued on or before 26 December 2025, those proceedings continue until concluded. Alternatively, if an NOSP was served on or before 26 December 2025, the lease remains an assured tenancy and the NOSP can be relied on until the usual 12-month time expiry date and/or possession proceedings are issued and concluded. 

Otherwise, it is too late now to serve NOSPs on a shared owner. This significantly changes how landlords can recover possession or a shared ownership lease. Landlords now have to pursue forfeiture of the lease instead. So, what does this entail?

Forfeiture of shared ownership leases

Firstly, any rent arrears that a landlord wants to rely on to recover possession must be over £350 in value or over three years old.

Secondly, for rent arrears, no action can be taken unless a Notice of Rent Due (also referred to as a s.166 notice) has been served. The notice period for this is between 30 to 60 days. This is likely to be an additional step for many landlords to weave into their usual arrears process. Some landlords have already been doing this as a matter of course, following the case of Sovereign Network Homes – see our previous blog. Service of a s166 notice is now definitely required, however, now that shared ownership leases are treated the same as long leases. 

If the only breach of lease is rent arrears and the above conditions are satisfied, and it is clear that there is no one in occupation, there may be the opportunity for a landlord to forfeit the lease by peaceful re-entry, i.e. go in and change the locks. There are some strict legal requirements for this. We recommend seeking legal advice first.  

Where the property is occupied, court proceedings must be used. 

If possession action is required only for rent arrears, then a possession claim can be issued once the s.166 notice has been served and the notice period come to an end. 

The situation is different if you want to rely on arrears of service charge or other charges (administration, management, insurance, etc.) that are not ‘pure rent’ and for any other breach of tenancy, such as unauthorised works, subletting or antisocial behaviour. In all cases other than arrears of pure rent, you cannot take any action towards forfeiture until you have either:

• a written admission of breach from the shared owner (a rare thing indeed!); or
• a determination by the First-tier Tribunal (Property Chamber) or a court (e.g. a money judgment or a finding of a breach of tenancy or injunction in the County Court).

Only then can you serve a s.146 forfeiture notice. There are some strict legal requirements in relation to these notices. Once the s.146 notice period has expired, you can issue your possession claim.

What if there is a mortgage lender?

Before the Renters’ Right Act, the interaction between a Landlord/freeholder and any mortgage lender was governed by the Joint Shared Ownership Guidance, along with any direct contractual agreement between the parties. This, at the very least, required landlords to give a lender 28 days’ notice before they served an NOSP on ground 8. As yet, the guidance has not been updated and there is no indication of when this will be done.  It may just fall away. We recommend that you keep the lender notified of the proposed steps you are taking and serve them with all money judgment or notices. 

The lender needs to be served with the possession claim paperwork. It’s likely a lender will seek to intervene to protect its security because if the lease is forfeited, they lose their security. A lender can also seek relief from forfeiture, as above and see further below. 

Beware! 

Waiver danger – with forfeiture of a lease, the freeholder needs to be aware of the risk of waiving the breach and therefore not being able to forfeit the lease in reliance of it. Take legal advice about the steps you can or cannot take. 

Relief from forfeiture – a shared owner can defend a forfeiture possession claim by disputing the facts (including for example e.g. challenging service charges to challenge the level of arrears), claiming waiver or seeking relief from forfeiture. However, a shared owner will only be granted relief if they have remedied the breach e.g. paid off any arrears, put right any other breach. Relief from forfeiture can be made conditional and can also be granted to a third party, such as a lender.

Action required 

Social landlords with a shared ownership portfolio need to review and update their policy and procedure for enforcement action against shared owners to reflect these significant changes. 

Please contact Rebecca Sembuuze or Helen Tucker for assistance or advice.