Important legal notices update

The Coronavirus Act 2020 (“the Act”) received Royal Assent and came into force on Thursday 26 March 2020.

Section 81 and Schedule 29 are the operative parts which concern the law relating to Landlord and Tenants. The provisions apply from 26 March until 30 September 2020 (“the Relevant Period”). The relevant period may be extended (up to a maximum of 6 months) by the Government.

What changes does the Act make in relation to private landlord and tenant law?

• Despite the Government’s promise that there would be a complete ban on evictions, the legislation, in its current form, does not ban landlords from serving a notice seeking possession, nor does it prevent landlords from issuing possession proceedings within the Relevant Period.
• Despite the Lord Chief Justice announcing that landlord and tenants should be expected to work together to establish affordable payment plans, there remains no Pre-Action Protocol for private landlord and tenant proceedings.
• Any rent payable during the “Relevant Period” remains treated as rent legally due.
• The grounds for recovering possession under Schedule 2 of the Housing Act 1988 are unchanged. For instance, despite the notice period requirement being increased to 3 months, the requisite criteria for satisfaction of Ground 8 remains 2 months’ rent arrears at the time of serving notice and at the hearing.

What about notices already served and orders obtained?

• Notices served prior to 26 March 2020 are unaffected by the Act. Therefore, once they have expired, proceedings may be issued.
• Possession orders remain enforceable and are unaffected by the Act. Therefore, application for warrant of possession may be made, but many Courts are cancelling Bailiff appointments already listed and refusing to carry out evictions.

Criticism regarding the “unfulfilled promise”.

Prior to the new act being served, the Government promised that there would be a “Complete ban on evictions and additional protection for renters” in response to concerns that tenants would be made homeless as a result of financial implications arising from COVID-19. It was indicated that this would include:

• Emergency legislation to suspend new evictions from social or private rented accommodation while this national emergency is taking place, and
• No new possession proceedings through applications to the court to start during the crisis.

As part of his response to criticism regarding the unfulfilled promise of a complete ban on evictions, the Secretary of State for Housing, Communities and Local Government has stated that very clear guidance given to Judges and bailiffs means it is extremely unlikely that any possession proceedings will continue during the Relevant Period and if there is evidence that this is not the case, the position will be reviewed.

Whilst we have not seen the guidance provided to Judges, we are aware of some Courts clearing their lists of cases, adjourning all hearings until later dates and deciding not to allow any evictions which are currently scheduled.

In any event, the effect of this in practice is that whilst notices may be served and claims may continue to be issued, hearings are unlikely to be listed to take place in the near future. This is partly due to the administration of many Courts refusing to list claims and the need to relist the thousands of hearings which will have been adjourned in response to the COVID-19 Pandemic.

What to do going forward.

• We suggest that you operate business as usual in that if you would normally issue proceedings on an expired notice already served, then you should do so.
• Similarly, if you can issue a warrant request, continue to do so. This will ensure that your application is ‘in the queue’ and whilst it may not be actioned just yet, once the restrictions are lifted, we consider all applications will be dealt with in date order and will therefore be enforceable in due course.
• Whilst a Pre Action Protocol was suggested it is not yet law or even drafted to be considered. The current Social Housing PAP has been suggested but whilst it’s not really suited to the private sector it can be used as an indication of good practice.
• The suggestion that attempts should be made to negotiate settlement and not issue proceedings in order to avoid a Court fee, in our view, isn’t commercially viable as those attempts should have been exhausted before issue anyway. In addition, by not issuing when you are able to, you will be further down the list of applications when the Courts are back open for business and there will be a flood of backlogged cases to get through, which is likely to result in considerable delays for the foreseeable future.

A possibility of further amendment and changes to associated legislation?

In light of criticism it has received, the Government may introduce further amendments to the Act, or introduce subsequent changes to legislation which seeks to further deliver on the promises made and therefore the practical implication as it currently stands may change. As you will appreciate, guidance on likely or predicted changes is difficult and we wish to remind you that we are still in fast moving and unprecedented times but we shall provide further updates as and when appropriate.