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Convicted Arsonist - breach of conditions?

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My excellent tenant of four years (AST, now periodic) now has a permanent guest who has served time for arson.
My Landlord insurance renewal asks whether the residents have criminal records.
Is the insurance now invalidated?
We are very worried about this but my solicitor advises that Section 8 / ground 12 (breach of tenancy agreement) is unlikely to hold up and and we should serve the Section 21 instead. This would mean the guest will stay longer.
I just feel such a serious breach must allow a grant of early possession?

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