We are in unprecedented times given the COVID-19 pandemic and the Court and Court system has had to adapt accordingly in order to deal with the balancing of both landlords’ and tenants’ rights.
As such, the Coronavirus Act 2020 (“the Act”) came into force on 25 March 2020 and includes a number of measures to protect both landlords and tenants who have been affected by Covid-19.
Section 81 of the Act makes provision for new notice periods in relation to residential properties subject to residential tenancies (not licences) and cross-references the reader to Schedule 29 of the Act.
Schedule 29 paragraph 7 sets out that that any notices given during the relevant period have to provide for 3 months’ notice to the recipient.
Schedule 29 paragraph 1 defines the relevant period as:-
- Beginning with the day after the day on which the Act has passed, and;
- Ending with 30 September 2020.
In essence, this means that any notice served between 26 March 2020 and 30 September 2020 has to comply with the notice requirements. This only applies in respect of new notices that are issued within the relevant period.
New standard notices to take into account these changes have been drafted and, to ensure that landlords are serving notice in the prescribed form, should be used in all cases up to 30 September 2020 until further guidance is issued by the Government.
As a result of the Act coming into force, the Court responded with the introduction of the new Practice Direction 51(Z) which represented the 117th Practice Direction update to the Civil Procedural Rules. In summary, it implements what was included within the 2020 and is effective from 27 March 2020. The main changes are listed as follows:-
- All proceedings for possession brought under CPR Part 55 and all proceedings seeking to enforce an Order for Possession by a Warrant or Writ of Possession are stayed for a period of 90 days from 27 March 2020;
- Claims for injunctive relief are not subject to the stay;
- The Practice Direction ceases to have effect on 30 October 2020, although it can be extended if necessary.
Many landlords rely on rental income as a contingent to pay their own buy to let mortgages. As a balancing exercise in anticipation of the effect on landlords in not receiving rental income, the Act provides for landlords to benefit from a three month mortgage holiday. Any landlords facing difficulties with paying their own mortgage should therefore immediately contact their mortgage lender in order to make arrangements for this holiday to commence.
It is also encouraged that parties liaise with each other to see if possession can be avoided, such as through repayment plans for any arrears that accrue. Inevitably, there will be an administrative backlog within the Court which, upon confirmation that possession hearings can be listed again will also be dealing with the re-listing all of the other civil and family matters that have been adjourned and postponed during the relevant period. As such, landlords can potentially mitigate their losses by negotiating with their tenants.
Notices issued prior to the relevant period remain valid for the purposes of issuing future possession proceedings to recover possession of a property. However, it has been determined that such proceedings cannot be issued until the end of June 2020 at the earliest and, subject to the current situation as it develops, provision has been made for this to be extended as is necessary in order to assist with the curtailing of the outbreak.
The Dispute Resolution team will continue to monitor the position so that our clients can be provided with the most up to date information. In the meantime, both landlords and tenants remain liable for their obligations under the tenancy agreement. The Act does not permit tenants to stop paying their rent and does not permit landlords to disregard repairing obligations, the latter of which should be conducted following the Government guidance on social distancing to protect the health and safety of occupants, landlords and contractors.
As such, whilst we may be unable to progress possession proceedings at this point, this does not mean that the position needs to stagnate. The Dispute Resolution team is still able to answer any questions, prepare compliant notices in accordance with the Act provisions and assist with the negotiation and formal drafting of repayment agreements between parties.