Coronavirus (COVID-19) - further questions on residential eviction proceedings
The Government has tried to balance the worry facing many tenants that they might lose their home, against that of landlords, who are seeking possession of their property for entirely legitimate purposes during these unprecedented times. In our earlier article Coronavirus (COVID-19) and eviction proceedings – tips for residential landlords we explained the new restrictions introduced by the Coronavirus Act. Below are some FAQs in relation to possession proceedings under the new rules.
What are the new rules?
The new rules relating to possession proceedings are found in schedule 29 of the Coronavirus Act 2020 (the "Act"), and an amendment to the Court procedural rules. In essence they have done two things:
- increased the notice period that a landlord has to provide their tenant with, before they can issue possession proceedings - up to 3 months; and
- all possession proceedings are stayed (i.e. halted) for up to 90 days.
What tenancies do the new rules apply to?
They apply to tenancies in England and Wales that are protected under the following Acts:
- Rent Act 1977
- Housing Act 1985
- Housing Act 1988
- Housing Act 1996
These new rules in schedule 29 of the Act apply from 26 March 2020 and run until the 30 September 2020.
The stay of possession proceedings for up to 90 days, is set out in Court Practice Direction 51Z, and applies to all claims for the possession of land, including agricultural, commercial, and mortgage actions.
If the tenancy is an assured tenancy or an assured shorthold tenancy, can I still serve notice to quit?
Yes. As a landlord you can still serve a termination notice on your tenant. You will need to make sure that you are using the updated forms when you are serving a notice under section 8 or section 21 of the Housing Act 1988. This is because the notice given to tenants now has to be at least 3 months. Therefore, a landlord will need to wait until the 3 months are up before issuing possession proceedings.
Landlords should be aware that under the Coronavirus Act 2020 the 3-month notice period can be extended by up to 6 months.
I provided an employee with accommodation as a licensee. They have now left my employment, can I still require them to leave the accommodation?
The Prevention from Eviction Act 1977 still applies, so you will need a Court order to enforce possession, and the mandatory stay will delay you in obtaining one for at least 90 days.
What if I served a notice on my tenant before these provisions came into force?
If you are a landlord and have already served your tenant with a notice (before these provisions applied) you are still able to commence possession proceedings, once the period of notice has expired. The new rules are not retrospective.
Under the Civil Procedure Rules 2020 however, possession proceedings have all been stayed for a period of 90 days from the 25 March 2020, so the outcomes may not be that different.
The reality is that although you are able to commence proceedings and the Court may allow the claim to be started, it would then most likely be stayed for the required 90 days.
What will happen with rent arrears?
Tenants are not being afforded the same benefits as home owners and are not being given "rent holidays". Therefore, landlords may find that their tenants are in a position, in which they are unable to pay the rent.
Tenants should discuss any concerns regarding payment of rent with their landlord as soon as possible and any agreement between the parties should be recorded in writing. Landlords should bear in mind that if their tenant is unable to pay rent, they may be able to take advantage of a mortgage holiday to alleviate some of the financial burden that may come with this.
Landlords can still sue for the rent, even if they do not seek to terminate the lease. This may be a better alternative for a landlord given the current restrictions, as it will most likely not be possible to fill the property in the short term anyway.
However, many trade associations representing landlords have suggested caution, given that many tenants may not be in a position to pay arrears, even if a landlord successfully claims for them.
If the notice expires, should I continue to accept rent from the tenant?
If a notice has expired and the tenant remains in occupation, a landlord ought to be careful of accepting rent from them, as this could be construed as creating a new periodic tenancy.
It might be that after seeking advice, the landlord decides that they would prefer that there was a tenancy with a guaranteed rent. The landlord could agree with the tenant that the notice served is void. They could then either serve a further notice or attempt to agree a date for possession with the tenant later down the line, although the latter may not always be possible depending on the relationship with the tenant.
Alternatively, instead of accepting rent from the tenant the landlord may be able to claim a sum of money from the tenant termed as 'mesne profits' reflecting that the tenant has had use of the property in the meantime. The starting point is usually the same as the rent that the tenant was paying under their tenancy.
If you would like to discuss any of the issues raised in this article, or have other concerns about the impact of Coronavirus, please contact Hannah Drew in Michelmores' Agricultural Litigation team or Andrew Baines in our Property Litigation team.
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This article is for information purposes only and is not a substitute for legal advice and should not be relied upon as such. Please contact our specialist lawyers to discuss any issues you are facing.