The Coronavirus Act 2020 received Royal Assent and came into force today.
Section 81 and Schedule 29 are the parts which concern the law relating to Landlord and Tenants.
The provisions apply from 26 March until 30 September 2020, but this may be extended by up to 6 months by the Government.
The following information has been shared with us by our referencing and legal partner Let Alliance.
The Governments promise to renters stated that:
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 The government is clear – no renter who has lost income due to coronavirus will be forced out of their home, nor will any landlord face unmanageable debts.
Q1 – What changes does the Act make in relation to private landlord and tenant law?
All notices under Section 8 and Section 21 of the Housing Act 1988 served from (and included) today must provide a notice of not less than 3 months. This replaces the previous requirement of 2 weeks and 2 months respectively.
Q2 – What remains unchanged by the Act?
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 saying 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.
Q3 – 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.
Q4 – What does that mean for us moving 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.
Q5 – What about Company letting agreements?
The Act extends the required notice period of a Notice to Quit to three months in respect of Rent Act 1977 by amendment of Section 5 of the Protection from Eviction Act 1977.
Whilst there is no direct mention, or applicability to the position relating to company let agreements the Act does provides similar protections in respect of Business Tenancies under the Landlord and Tenant Act 1954.
Our view is therefore that it is the clear intention of Parliament that all tenants should be given 3 months’ notice of the landlord’s intention to recover possession of premises. It is the function of the Court to interpret the legislation and in our view it would be the most logical interpretation that the period of notice required for Company letting agreements is also to be extended to 3 months’ notice.
If less than 3 months’ notice were given for a company let agreement, we consider there is a risk that the Court would deem the Notice to Quit invalid and the action for possession would fail. Meaning it would be likely that a new Notice to Quit would need to be served, providing 3 months’ notice and delaying the recovery of possession considerably.
Q6 – A possibility of further amendment and changes to associated legislation?
It seems the Courts aren’t actively listing cases and may have been advised not to make possession orders just yet but there is currently no changes in law which alter the position of the Court when faced with an application for possession which satisfies the requirements for possession on mandatory grounds.
If an accelerated application is issued for instance, and dealt with by the Court on the papers, there is nothing at present to suggest that the Court is precluded from making a mandatory order for possession.
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.