In order to address this situation, the recently passed Coronavirus Act 2020 has temporary but significant implications on landlords’ abilities to evict their tenants during the coronavirus crisis. Furthermore, a new practice direction governing the way in which courts deal with civil claims, including possession proceedings, has meant landlords, agents and lawyers alike will need to pay careful attention to the changes to ensure that not only do landlords avoid potential claims for unlawful eviction but, more importantly, tenants’ rights are protected during such an uncertain and worrying time.
What has changed?
Section 81 of the Coronavirus Act 2020 extends statutory notice periods relating to almost all forms of tenancy agreements, (including Assured Tenancies, Assured Shorthold Tenancies and Rent Act 1977 Tenancies) to no less than three months. This means all section 21 notices, section 8 notices and notices to quit served on tenants on or after 26 March 2020 until 30 September 2020 must not expire within a three month period. Notably, this extended period applies to whichever ground under Section 8 a landlord relies upon, including rental arrears where normally the notice period can be two weeks.
Landlords and agents should also note that Schedule 29 of the Coronavirus Act 2020 allows the Government to amend the three month notice period to six months, should this be necessary to protect tenant’s rights.
This provision is mirrored in a recent update to the Part 55 of the Civil Procedure Rules (which relates to possession proceedings) that states that: “All proceedings for possession brought under CPR Part 55 and all proceedings seeking to enforce an order for possession by a warrant or writ of possession are stayed for a period of 90 days from today, 27 March 2020”. The effect being that all current possession proceedings will be effectively paused for 90 days, as will enforcement of possession orders. This measure is undoubtedly meant to avoid evictions during the peak of the crisis but also to enable the courts to deal with more pressing applications (such as emergency injunctions and family matters) safely by telephone.
The legislation brought in by the Coronavirus Act 2020 falls short of banning evictions outright, although makes it significantly harder for landlords to obtain vacant possession of their properties in the very immediate future. Landlords therefore need to think carefully about what steps they wish to take against their tenants, particularly as it is inevitable that there will be a significant delay for the courts in dealing with possession proceedings even after the peak of the crisis has passed as the courts endeavour to manage the backlog of already issued claims.
What if my tenant stops paying rent?
Given the financial uncertainty, it is understandable that landlords will be concerned about their tenants’ ability to pay the rent on time when now a minimum of three months’ notice will be required before possession proceedings can be instigated.
Tenants will remain liable for rent pursuant to their agreement notwithstanding their ability to actually pay however the Government has made the following pledges, to support tenants in paying their rent:
- We are working with the Master of Rolls to strengthen the pre-action protocol requirement and also extend this to the private rented sector. This will help landlords and tenants to agree reasonable repayment plans where rent arrears may have arisen.
- We have already made £500m available to fund households experiencing financial hardship.
- As part of the workers’ support package, the Chancellor announced the government will pay up to 80% of a worker’s wages, up to a total of £2,500 per month, where workers are placed on the Coronavirus Job Retention Scheme.
- Both Universal Credit and Housing Benefit will increase and from April, Local Housing Allowance rates will pay for at least 30% of market rents in each area.
The Government has also insisted that it is committed to supporting landlords and has announced that it has ensured that a three month mortgage payment holiday is available to landlords with Buy to Let mortgages with certain banks.
If you have any queries about matters mentioned in this article then please contact the author Naomi Baker or any other member of the Property Litigation Team who would be happy to provide additional advice relating to your specific circumstances.
The content of this article is for general information only. It is not, and should not be taken as, legal advice. If you require any further information in relation to this article please contact the author in the first instance. Law covered as at April 2020.