The end of the moratorium for commercial landlords, and the start of a new one
New legislation is now in force to provide welcome relief for landlords, who have been prevented from taking action for a significant period of time.Read more
Since the introduction of the Coronavirus Act 2020, the law in relation to serving notice on tenants and obtaining possession, has changed several times. The legislation provides a high level of protection for tenants, whilst adding additional steps for landlords to complete in order to progress a claim for possession and recover their property.
The Government remains steadfast in its approach that landlords should exercise compassion and flexibility, and wherever possible, try to agree some sort of settlement or payment plan with a tenant, with court action to obtain possession of the property being seen as very much a last resort. Detailed Government guidance can be found here.
Prior to the pandemic, various notice periods ranged between immediately (for a section 8 notice) and two months (for a section 21 notice). However in March 2020, with the stay at home order issued by the Prime Minister and a vast number of people suffering financial hardship either from job losses or reduction in income due to the furlough scheme, this was extended to a minimum of three months’ notice between 20 March 2020 and 28 August 2020. In respect of a section 21 notice, this was later further extended to six months’ minimum notice for any notice served from 29 August 2020 to 31 March 2021. Section 8 notices have also been extended to six months’ notice from 29 August 2020 to 31 March 2021 unless they fall within one of the exceptions listed below:
The content and form of the notices are also updated regularly, therefore it is important to check that the most up-to-date version is used.
In a situation where there are four or five months’ rent arrears, it may actually be quicker to wait for six months arrears to accrue in order to serve a section 8 notice with a four week notice period, rather than serving notice immediately and having to wait for the six month notice period to expire. There is, of course, no guarantee that notice periods will not change again, but presently, after March 2021, notice periods should revert to pre-COVID timescales.
All possession proceedings in court were stayed between 27 March 2020 and 20 September 2020. However, that stay has now been lifted and claims are now being heard. Delays are to be expected as not only will there be a considerable backlog of cases that were subject to the stay in proceedings, but court staff including the judiciary are often required to self-isolate and entire departments are out of action in some areas.
Stayed claims will not be listed, relisted, heard or referred to a judge under rule 55.15 of the Civil Procedure Rules until either party has filed and served a written notice, called a reactivation notice, confirming that they wish for any of these actions to take place.
A reactivation notice must confirm the party filing it wishes for the case to be listed, relisted, heard or referred; and (except for appeals) set out what knowledge that party has as to the effect of the coronavirus pandemic on the defendant and any dependants. A template of the reactivation notice can be found on the Government’s website here.
Where a reactivation notice is filed and served by the claimant and the claim is based on rent arrears, the claimant will be required to provide an updated rent account for the previous two years with the notice.
If neither party file nor serve a reactivation notice by 16:00 on 29 January 2021, the claim will be automatically stayed. This stay will not be classed as a sanction for a breach and a mere application to lift the stay will be required rather than an application for relief from sanction.
These claims do not require a reactivation notice, but landlords still need to provide the court with any information known about the defendant’s circumstances. For claims already issued prior to the stay being lifted, this needs to be provided to the court and two copies brought to any listed hearing.
For claims issued following the stay being lifted, this information is required to be provided to the court at the time of the claim being issued.
After the issue of proceedings, the case will be referred to a district judge who will then set a date to review the court file. The landlord will need to ensure that they are available for contact on the review date and will need to file and serve all relevant claim documents 14 days in advance of the review. The landlord should get 21 days’ notice of the review.
In existing claims where directions have already been set, dependent on the date of issue, the landlord may still need to provide a reactivation notice and a statement that the directions and any existing hearing date can be met.
At the review date, the judge will decide what, if any, further directions are required to progress the case towards trial and will list the substantive hearing, this should take place within 28 days.
In the event that either the landlord or tenant has suffered financial hardship as a result of the pandemic, it is possible that either can have a case marked as a COVID-19 case. This will assist the court in processing the claim, for example, by prioritising hearing dates or exercising any necessary discretion. Where a tenant marks the claim as a COVID-19 case, the Government is urging landlords to consider whether there is an alternative way to resolve the matter.
Although claims have not been suspended, no enforcement action will take place during the second lockdown by either County Court bailiffs or a High Court Enforcement Officer. This is being referred to as a ‘winter truce’ and will remain in place until 11 January 2021, apart from in exceptional circumstances such as illegal occupation or fraud.
The Lord Chancellor & Secretary of State for Justice had previously indicated that there would be an exception for extreme pre-COVID rent arrears. Further details are now available and there is a provision for an exception where there are substantial rent arrears of more than nine months prior to 23 March 2020. However, any rent arrears after this date are disregarded (for this purpose).
A landlord seeking to evict a residential tenant (particularly for rent arrears) should first make every effort to contact the tenant to ascertain their position, the reason for the arrears, and to see if the problem can be resolved amicably. All attempts at contact should be fully documented together with any response or lack of response.
The process of obtaining possession of residential property can be difficult and laborious. Any landlord unsure of their position should take legal advice. Obtaining possession of residential property was not a straightforward matter prior to the pandemic, but with constantly changing notice periods, more detailed claim forms and additional requirements, the burden does now appear to be against a landlord.
If you would like any further information regarding the eviction of a residential tenant, call 01332 226 150, or fill in the form below.
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