Further to our previous article, ‘Covid-19 – Property and Possession’ which set out the consequences for possession proceedings introduced by Practice Direction 51Z (PD 51Z), which came into force on the 27 March 2020 and suspended possession proceedings issued pursuant to CPR Part 55 for a period of 90 days until 25 June 2020, an extension has been granted. As PD 51Z made provision for an extension, the fact that it has been granted is in itself not a surprising given the lasting nature of the pandemic; however, we set out below what this means for landlords.
On 10 June 2020; the 121st Practice Direction was issued providing for further amendments to be implemented into Part 55 CPR and to provide clarification that:
- During the stay, courts are not required to give any notice to parties
- Nor does time run (in relation to time limits) during the stay
- PD 51Z ceases to have effect on 25 June 2020, when the new rules (below) come into effect
Upon expiry of the current suspension under PD 51Z, it has been announced by the Housing Secretary that the Civil Procedure Amendment No.2 Coronavirus Rules 2020 (the 2020 Rules) will come into force on 25 June 2020. They will temporarily amend Part 55 of the Civil Procedure Rules tocontinue the suspension on possession proceedings for a further two months. This also includes a suspension on any enforcement proceedings issued by writ or warrant. The 2020 Rules have been introduced to:
- Avoid any gap in the operation of the suspension of proceedings
- Come into force on 25 June 2020 for eight weeks
- Expire on the 23 August 2020
Impact on Landlords and proceedings
The above amendments will be implemented as part of the Government’s commitment to ensuring that no tenant is evicted from their home this summer as a result of the financial difficulties caused by Covid-19.
Unfortunately, for many landlords, news of the extension will be far from welcome news and the fact remains that neither the Coronavirus Act 2020 nor the 2020 Rules provide for any exception to the extension in respect of tenants who were in arrears or in breach of their tenancy agreement prior to the pandemic. As explained in our previous article, many landlords rely on the income of their rental properties as a contingent to pay their own buy to let mortgages, or other utilities. Mortgage lenders are granting relief on payments, referred to as ‘payment holidays’, to help landlords balance these difficulties and mitigate the financial effects of Covid-19 and landlords are recommended to contact their lender immediately for confirmation that this will apply given the extension granted.
In the event that difficulties with rent arise, the government has urged landlords and tenants to exhaust all possible options, such as flexible payment plans, to ensure that cases only end up in court as an absolute last resort to prevent the inevitable backlog in cases which is set to follow. Although landlords will not be able to progress proceedings for the foreseeable future, other options for action remain available, such as active negotiations and the service of notices seeking possession, albeit in the amended formats.
The Dispute Resolution Team continues to monitor the position regarding possession proceedings, so that our clients can be provided with the most up to date information. In the meantime, none of the amendments introduced excuse either landlords or tenants from their contractual obligations under the tenancy agreement and applicable landlord and tenant statutes and certainly should not be viewed as an opportunity to evade liability for such obligations.