Calling all owners of mixed use commercial property – legal updates are on the horizon that may well affect the plans that you have for your property, so the time to act is now.
What changes will the legislation make?
As of 1 May 2026, “no fault” eviction notices (otherwise known as “Section 21 notices”, or “the Section 21 process”) will become a thing of the past, so if you own property subject to both commercial and residential uses, you need to be prepared.
Once The Renters’ Rights Act kicks in, renting in England will be transformed with a raft of major changes coming into effect that will benefit 11 million renters across England.
Other changes include it becoming illegal for landlords and letting agents to:
- increase rent prices more than once a year
- ask for more than one month’s rent payment in advance
- pit prospective tenants against one another through rental bidding wars
- discriminate against potential tenants, because they receive benefits or have children.
But how will this affect owners of mixed-use property?
The focus of the Act is very much on the residential renting sector, but that doesn’t mean that commercial property is treated totally in isolation. It is quite common to own mixed-use property, whereby there may be a shop or restaurant on the ground floor for example, with residential floors above rented out as flats.
If you own mixed use property, there are certainly some things to think about before the changes come into force:
- Are you looking at selling in the near future? Most mixed use properties are sold with sitting tenants as investments, but if you need to sell with vacant possession, you need to take steps now to ensure any existing assured shorthold tenancy (AST) is terminated correctly before 30 April 2026 before they automatically come assured periodic tenancies (APTs) with additional rights.
- If the residential part of your property is currently vacant, think ahead and decide whether putting in place an AST now could give you potential issues on a future sale. Get some advice from an agent/surveyor on their views re: marketability and property values.
- If an existing residential tenant is staying put post sale, then buyers will arguably want to know even more information about them than in the past, since it won’t be as easy to terminate their occupation post 1 May. Make sure all of your records are up to date, and if a tenant is being problematic, act on it sooner rather than later.
- Stay on top of your obligations, as landlords will need to serve an ‘information sheet’ (to be published in March) on their existing residential AST tenants before 31 May 2026, and any new APT will need to contain specific details which the Government are setting out in March. Keep your eyes peeled for further updates.
What are the timelines?
Private landlord possession claims using the Section 21 process that are going through the courts on the commencement date will proceed as normal.
After 1 May 2026, the courts will still be able to process Section 21 possessions that are ongoing, for example:
- if a private landlord served their tenant with a Section 21 notice before 1 May 2026, any court possession proceedings must be made in line with the usual rules and no later than 31 July 2026, when using the Section 21 court process.
- after this date (31 July 2026), the landlord will not be able to use the Section 21 process and must use the new grounds for possession.
Contact us
For specialist advice from experienced commercial property solicitors, please get in touch with Emma Chater on 07442 288 188 or email at emma.chater@mfgsolicitors.com.
We work closely with our Property Litigation team who can assist with the termination of ASTs, so please do get in touch, and we can chat through your options.
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