In the residential property sector, a number of tenants will now find themselves unable to keep up with rent as a result of being out of work. On the other hand, landlords may experience a significant hit to their income stream given some of their tenants cannot keep up with rent payments. Consequently, keeping up with mortgages or other securities charged over their properties will become increasingly difficult.
These are difficult times. Already, we are hearing tenants are now refusing to pay rent, or landlords are evicting tenants on little to no notice, in clear breach of tenancy agreements and the relevant legislation.
The provisions of the Act relevant to possession proceedings came into effect on 26 March 2020 and, as of 30 March 2020 are set to last until 30 September 2020. The period from 26 March to 30 September 2020 is referred to as the ‘relevant period’ in the legislation.
Within the Act, the Government have extended the notice a landlord must give before commencing possession proceedings. 3 months is now the requisite period of notice should a landlord decide to reclaim possession of their property. This applies to the following types of tenancies:
- protected tenancies;
- statutory tenancies;
- secure tenancies;
- flexible tenancies;
- assured tenancies;
- assured shorthold tenancies;
- introductory tenancies; and
- demoted tenancies.
Prior to 27 March 2020, it appeared possession proceedings could still be issued, and tenants subsequently evicted. However, following a decision by the Master of the Rolls, to which the Lord Chancellor agreed, the court service is set to suspend all ongoing housing possession actions. (A useful summary of this and other updates can be found on the Government website).
These measures came into effect on 27 March 2020, following pressure on the Government to offer greater protection to those renting in the residential property sector. The Government’s announcement is said to apply to cases already in the process or those about to be initiated. As a result, no case can progress to the stage where an individual could be evicted. This suspension is initially set to last for 90 days but can be extended if so required.
In the meantime, Government advice is that tenants should still continue to pay their rent. If they are not able to do so, landlords and tenants are encouraged to work together and negotiate a temporary rent payment scheme for instance.
Evidently, landlords will see a prolonged delay to their attempts to reclaim possession of their properties. Although recent legislation and guidance in this area has clarified matters somewhat, the suspension of ongoing possession claims will undoubtedly lead to a backlog of cases in the court system in the long term. Consequently, it is likely we will continue to see significant delays to possession proceedings, even after the relevant period of the Act has expired and a suspension on evictions has been lifted.
Hanne & Co would strongly advise the Government guidance in this area is followed. It is in both parties’ interests to try and negotiate an amicable solution and we would implore both landlords and tenants alike to cooperate as far as possible in light of the current climate. However, where this cannot be achieved, Hanne & Co’s Property Litigation and Dispute Resolution Team are here to assist with any disputes that may arise.
Should you have an issue relating to the above, or have a more general property litigation or dispute resolution enquiry, please do get in touch with the team here at Hanne & Co on 020 7228 0017.
Jack Glover is a Trainee Solicitor in Hanne & Co’s Property Litigation & Dispute Resolution Team