Covid-19

On 26 March 2020 the Coronavirus Act 2020 (“Act”) came into force. As you may be aware, this followed a good deal of media coverage on Government proposals to impose a blanket ‘ban on evictions’ and allow tenants ‘rent holidays’ for at least 3 months. These proposals do not, however, actually feature in the new legislation. As the situation continues to change, we are regularly reviewing the advice we give to our clients. Below is a summary of guidance for landlords under the current legislation:

Can I still serve notice on my tenant(s)?

Yes. The Act simply states that from 26 March 2020 all notices seeking possession (this applies to both section 8 and section 21 notices) must give tenants at least 3 months’ notice. Landlords can therefore still serve notice on their tenants provided the usual criteria for doing so are met. Landlords can also still issue claims for possession once those notices expire if the tenants have failed to leave.

What about demanding rent from my tenant(s)?

Tenants will remain liable for any rent falling due during this current crisis, although landlords have been advised to negotiate with their tenants on a case-by-case basis to ideally reach a repayment plan of some sort. In practice, we appreciate that many landlords have a difficult relationship with their tenants at the best of times and of course there is no guarantee that any such agreements will be honoured. The grounds for serving a section 8 notice due to rent arrears have not changed. If your tenant owes at least 2 months/8 weeks rent, and an informal repayment plan is not feasible, we therefore recommend serving a section 8 notice.

My possession notice has expired, can I issue a claim?

Additional guidance on the eviction process has since been published by the Ministry of Housing and the Ministry of Justice. In summary, whilst landlords are legally able to commence eviction action against their tenants, there are procedural and logistic issues to consider when doing so. For instance, many courts have either closed or are operating on a skeleton staff and no bailiff appointments are currently being carried out due to the public health risk.

From 27 March 2020, following a decision by the Master of the Rolls, the court service have confirmed that they will suspend all ongoing housing possession actions for 90 days. The government guidelines state that a claim will not progress to the stage where “someone could be evicted”. It is now becoming clear that this stay will apply to new claims (which are currently still being issued) and as well as on-going matters. Clearly this stay of claims is also relevant to the execution of warrants/bailiff appointments.

We are therefore advising clients to take this time to progress their claims so far as possible by issuing them with the court. This is in order to mitigate the backlog that will most likely be experienced once the courts fully re-open.

Is the notice I served on my tenant(s) before 26 March 2020 still valid?

Yes, provided all the usual criteria for serving that notice were met beforehand. There is no need to serve a new notice simply to comply with the new 3 months’ notice rule.

What will happen to my claim that is already with the court?

Your claim will stay with the court but delays are to be expected. The extent of those delays will naturally vary between courts due to differences in caseload and size. Claims may still be sent to the court and any claims already with the court will be progressed once the courts are able to operate at greater capacity again. Any possession orders already granted are still valid but enforcement action (such as bailiff appointments) will face similar delay.

Are there any protections for landlords?

Landlords are still entitled to demand rent from their tenants and also to progress eviction action even where there are no arrears (section 21). There has previously been some suggestion from the Government about abolishing section 21, however there has been no further noise on this point as yet.

Many landlords nevertheless still face the worrying prospect of tenants failing to pay any rent and there are clear concerns over how long this situation could go on for. “Mortgage holidays” are available in relation to buy-to-let mortgages. We strongly advise any landlords with concerns over their rented property’s mortgage payments to contact their mortgage provider as a matter of urgency and discuss applying for a “mortgage holiday”. Mortgage providers are under instruction to act in a fair, reasonable and compassionate way to any mortgagor struggling with repayments.

Are further changes to my position likely?

Any suspension on court action will likely be reviewed towards the end of June. In the meantime, the courts will continue to implement procedural guidance to their staff as appropriate.

As for legislation, the Act itself is required to be reviewed by Parliament every 6 months. There has already been some prominent criticism of the Government’s approach to private rented housing. It is therefore possible that further amendments will be enacted to address these concerns. It is also possible, however, that any changes will simply be made as part of general advice or practice directions.

We will update this guidance following any further directions or Acts of Parliament as they come through.