Coronavirus Act 2020 - What it really means for residential tenants
31st March 2020
Get in touch today
Call 01435 897297
31st March 2020
The Coronavirus Act 2020 (“the Act”) received Royal Assent on Wednesday, 25 March 2020 and introduced a swath of new measures to handle the COVID-19 coronavirus pandemic.
This was intended to include the protections for residential tenants affected by coronavirus as pledged by the Ministry of Housing, Communities and Local Government (“MHCLG”) last week and covered in our previous Legal Update (see here).
Whilst the new provisions in the Act do not quite go as far as a “complete ban” on evictions as set out in the MHCLG Press Release last week, it was announced last night that the Master of the Rolls had decided, separate to the provisions in the Act, the Courts will suspend all ongoing possession actions as from today for an initial period of 90 days.
What does the Coronavirus Act 2020 say for renters?
The Act provides that, until 30 September 2020, any notices seeking possession in relation to Rent Act, assured or assured shorthold tenancies or those granted under the Housing Act 1985 (e.g. social tenancies of Local Authority or Housing Association tenants), must give a minimum notice period of three months before proceedings for possession can be issued. Power is made within the Act for the three month period to be extended, by further Regulations, to up to six months.
Therefore, until 30 September 2020, any new Section 21 or Section 8 notice served on assured shorthold tenants, must give a minimum notice period of three months.
This does not apply to any notices served prior to the Act coming into force, which will remain valid provided that the usual notice periods have been given (at least two months for Section 21 notices and, depending on the Grounds, usually two weeks or two months for Section 8 notices).
The Act makes no provision for other types of tenancies, such as residential tenancies at a high rent which are excluded from being an assured shorthold tenancy under the Housing Act 1988, or licences (e.g. lodgers). It appears, therefore, that no such protection is offered for those category of occupiers, who would be subject to the usual rules and procedures should their landlords require possession of their properties during this period.
The Act also fails to deal with the issue of rent arrears, which will no doubt accrue for some renters as a result of the financial impact of the coronavirus crisis and form the basis for a landlord’s decision to recover possession of their property. This is again despite the MHCLG’s commitment last week that “no renter who has lost income due to coronavirus will be forced out of their home”. The Act is clear that possession notices can still be served on grounds of rent arrears which have accumulated during this period, either directly or indirectly as a result of coronavirus, albeit a slightly longer notice period needs to be given.
Court suspension on possession claims
So, whilst the Act does not introduce a complete ban on possession claims or evictions, the effect of the decision by the Master of the Rolls last night does. With the Lord Chancellor’s agreement, the Master of the Rolls announced that the Court service will suspend all ongoing housing possession action from today for an initial period of 90 days.
This means that neither cases currently in the Court system or about to be issued can progress in the next 90 day period toward the stage where someone could be evicted.
The suspension will initially last for three months, but it can be extended if needed. The measure is intended to protect all private and social renters, as well as those with mortgages and those with licenses covered by the Protection from Eviction Act 1977.
The MHCLG have been clear that tenants are still liable for their rent and should pay as usual. If they face financial hardship and struggle to pay their rent, support is being made available. As explained in our previous Legal Update from last week, the MHCLG is also working with the Master of the Rolls to extend the remit of and strengthen the pre-action protocol in place for possession claims on grounds of rent arrears, with the aim of helping landlords and tenants agree reasonable repayment plans and avoid possession claims where rent arrears may have arisen.
Impact for landlords
The new announcements will have serious implications for landlords. Where the issue is one of rent arrears, landlords should engage with their tenants early on to try and agree acceptable repayment plans where possible. That may be by way of deferred payments or instalment payments. The terms agreed should be clear and set out exactly what is expected, and how long that agreement will remain in place. In some cases, that will not be possible, whether due to the landlord’s or the tenant’s financial circumstances, although the Government appears committed to provide financial support to landlords by way of mortgage breaks, which should ease the financial burden on landlords to some degree.
Where an agreement as to repayment is not possible, or the landlord simply requires the property back, sadly they will need to accept the reality that this is not going to happen any time soon. Landlords considering or having already started the process for possession of their properties should expect serious delays even beyond the initial 90 day Court suspension, whilst the Courts catch up with the swath of new cases which will do doubt be commenced once the suspension is lifted, in an already saturated Court system.
For that reason, and given that the Act still allows possession notices to be served during this difficult and uncertain period, a landlord considering recovering possession of their properties in the upcoming months would be well advised not to delay and proceed with a three month notice as soon as they consider appropriate, with the hope that their possession claim is at the top of the pile for the Court to process when it comes to it. If the initial 90 day Court suspension is extended, consideration would then need to be given as to whether those notices served would need to be re-served to avoid them lapsing, bearing in mind the six month limitation on commencing a possession claim with a Section 21 Notice.
Should you have any issues with your tenancies, or any new or existing possession notices or claims, please feel free to contact Faye Didcote for more information or assistance at Faye.Didcote@kdllaw.com or on 01435 897297.
This legal update is provided free of charge for information purposes only; it does not constitute legal advice and should not be relied on as such. No responsibility for the accuracy and/or correctness of the information and commentary set out in the article, or for any consequences of relying on it, is assumed or accepted by any member of KDL Law or by KDL Law as a whole.
If you have received this update in error or wish to unsubscribe from future updates then please email us at email@example.com.
Sign up to receive FREE regular Legal Updates by email