Simon Painter (pictured), partner at BDB Pitmans
Balancing the interests of landlords and tenants is no easy task, but the pandemic has thrown these tensions into stark relief. It is clear that the government is wary of the potential levels of homelessness that may result from the pandemic, but many landlords also find themselves in difficult circumstances. The legislative approach taken in this area has evolved rapidly over the last six months.
Where we are now
The Coronavirus Act 2020 introduced measures to put in place a stay of residential possession proceedings. The stay came to an end on 20 September, having been extended by four weeks. Claims for possession could still be brought before 20 September, but they were automatically stayed.
Notice periods have also been extended. When serving a section 21 notice, the legal notice that landlords must serve to bring an assured shorthold tenancy to an end, a minimum of six months’ notice is now required.
Crucially, in claims for possession on the grounds that the tenant is in rent arrears, the landlord will now be required to give six months’ notice, unless the rent arrears are more than six months old in which case four weeks’ notice is required.
The new notice periods will remain in force until 31 March 2021.
These new provisions are not retrospective, meaning that if a notice was served before 29 August 2020 (when the changes were introduced) they will still be subject to the shorter notice periods.
In terms of practical steps that a landlord could take with the current measures in place, it is still possible to begin a claim for possession, but it will simply be placed ‘on hold’ until the stay is lifted. Even once the stay is lifted, the courts will be working through a considerable backlog of claims, and as a result there will be inevitable delays.
A tenant who remains in occupation is still obliged to make rent payments in accordance with the tenancy agreement, and so one option open to landlords is to pursue any unpaid rent as a debt claim in the courts. It should be noted that this will not ultimately result in the landlord being able to regain possession of a property. Another alternative would be to serve the tenant with a statutory demand, provided the tenant is an individual and there is no dispute as to the arrears. A statutory demand is a pre cursor to the issue of a bankruptcy petition and gives the debtor 21 days to pay.
What happens next
Once the stay of possession actions is lifted, possession claims will be free to proceed, albeit in a slightly different manner. For claims brought on or before 3 August 2020, a party must file a reactivation notice in order to have proceedings resumed, and in all claims the Court will require claimants to set out what knowledge they have as to the effect of the coronavirus on the defendant and any dependents. It is not clear what weight will be given to this information by the courts.
Whilst the current plan is for the stay to come to an end on 20 September 2020, it is possible that it might be extended. When justifying the previous extension, the government said that one of its key goals was to provide support to renters over the winter months.