Government extends commercial possession moratorium
A useful overview of the current position for commercial landlords following the extension of the restrictions on commercial forfeiture proceedings.Read more
Prior to the COVID-19 pandemic, obtaining possession of residential let property was a relatively straightforward process involving a notice procedure and ensuring compliance with the Deregulation Act 2015 and other legislation such as the Tenant Fees Act 2019.
At the outset of the pandemic, the Government introduced the Coronavirus Act 2020 which had the effect of more or less halting all action that residential landlords could take to evict a tenant. There have been numerous amendments to the Coronavirus Act 2020 since March 2020 which have gradually reintroduced the ability for landlords to evict tenants. Following the Government’s announcement on 12 May 2021, which confirmed the latest legislative update to Coronavirus Act 2020, we now have a clearer picture as to what is going to be required for residential possession as we ease out of the COVID-19 pandemic.
This article recaps the routes available for a landlord to obtain possession of residential property, the issues faced in light of the pandemic and finally, what we now know about the way forward.
There are two main routes to obtaining possession of residential let property. Firstly, a notice under Section 21 of the Housing Act 1988 can be served where there has been no breach of the tenancy agreement by the tenant, or the landlord does not wish to rely on that breach as a reason for claiming possession (or claim rent arrears). This is commonly referred to as the ‘non-fault’ route for possession. Following expiry of the notice, proceedings can be issued at court using the “Accelerated” route, meaning that in most cases no hearing is necessary, and the matter can be dealt with by the Judge on the papers and without the landlord needing to attend court.
The second route, where the tenant has committed a breach of the tenancy agreement or another defined circumstance, requires service of a notice under Section 8 of the Housing Act 1988 and for the landlord to prove a ‘ground’ for possession as defined in the Housing Act 1988. The court will then decide whether the breach or ground in question should lead to a possession order being made. Certain grounds are mandatory which means that the court has no option but to order possession, whilst others leave the court with discretion to strike a fair balance between the parties depending on the severity of the breach.
Prior to March 2020, a Section 21 notice required a minimum notice period of 2 months, and a Section 8 notice (where served for a breach of rent arrears) required a notice period of 14 days. Where the breach was other than rent arrears, the notice period could be up to 2 months depending on the ground relied on.
In March 2020, restrictions were imposed on residential possession due to the COVID-19 pandemic following the introduction of the Coronavirus Act 2020. It has been a difficult time for residential landlords and tenants alike as many tenants will simply have been unable to afford to pay their rent but the landlord has been unable to take any immediate action to mitigate their losses due to the restrictions. This has also led to some tenants taking advantage of the restrictions and deliberately not making payment of rent knowing that the landlord could not take action or would be delayed in doing so.
As of 26 March 2020, to serve a Section 8 notice for rent arrears (and most other breaches) the notice period was extended to a minimum of 3 months and in respect of Section 21 notices, this was extended from 2 months to 3 months. There was also a stay in all court proceedings which lasted until 19 September 2020.
As of 29 August 2020, notice periods were extended again and this remains the current position until 31 May 2021. To serve a Section 8 notice, in most cases, the minimum notice period required is 6 months, save for matters such as serious antisocial behaviour, death of the tenant, and serious arrears of rent. Where there are over 6 months of rent arrears the notice period is currently 4 weeks. Further information can be found here: https://www.gov.uk/government/publications/covid-19-and-renting-guidance-for-landlords-tenants-and-local-authorities/technical-guidance-on-eviction-notices
On 19 September 2020, the court introduced further stages to be completed once court proceedings are issued. This included the addition of a “review hearing” which takes place before the first possession hearing but does not require parties attendance at court. The landlord is also required to provide the court with evidence of their knowledge of the effect of the pandemic on the tenant, and file and serve an additional bundle of documents prior to the review hearing.
These changes and considering the growing number of cases being issued (in addition to the existing backlog of claims) means that where previously a landlord could have expected the case to be heard within 6-8 weeks of the claim being issued, it is now more likely to be 3-6 months or longer in some courts. The standard timeframe for vacant possession to be provided under a possession order is 14 days, but this could be up to 56 days if the tenant can demonstrate exceptional hardship.
Once the possession order is made and the tenant does not vacate in accordance with the possession order, a warrant of possession still needs to be obtained. However, currently, there is a restriction on residential evictions until 31 May 2021, which means that whilst a landlord can still apply for a writ of possession or possession warrant, unless the court is satisfied that there are significant rent arrears in excess of 6 months (or another of the exemptions applies), the bailiff will not be able to book an eviction date.
Furthermore, where a tenant who is due to be evicted has symptoms of COVID-19 and is required to self isolate, the eviction can be delayed without any application by the tenant to suspend the warrant and can be further delayed if the tenant subsequently has a positive test result, again without any requirement for a formal application.
The current restriction on evictions and the legislation relating to the extended notice periods required under the Housing Act 1988 is due to come to an end on 31 May 2021.
The Housing Minister announced on 12 May 2021 that tenants of residential property will continue to be supported with longer notice periods to continue until at least October 2021. There will, however, be a phased approach to returning to the previous position with the next change coming into effect on 01 June 2021. The full announcement can be accessed here: https://www.gov.uk/government/news/support-for-renters-continues-with-longer-notice-periods
The current restriction on evictions will end on 31 May 2021. There is a requirement for the Bailiff to provide 14 days’ notice of the eviction date which means that it is unlikely for evictions to take place before the middle of June 2021. However, even once an eviction date is given, Bailiffs will not be able to evict anyone who is self-isolating whether by way of symptoms or positive tests, therefore as above, evictions are likely to still be easily delayed.
In light of the length of the current restrictions which have been in place, there will be a considerable number of warrants of possession that have been obtained but not yet actioned by the Bailiffs. Accordingly, it can be expected that there will be some lengthy delays in eviction dates being provided and for the Bailiff’s diaries to be relatively full, with the most serious cases being prioritised.
From 01 June 2021, the notice periods for both Section 21 and Section 8 notices will reduce from 6 months to 4 months. In addition, the following carve-outs will apply;
From 01 August 2021, the notice period for a Section 8 notice on rent arrears grounds will reduce from 4 months to 2 months for accumulated rent arrears of under 4 months. For accumulated rent arrears over 4 months, the carve-out above will continue to apply.
In addition, from 04 May 2021, the Assured Tenancies and Agricultural Occupancies (Forms) (Moratorium Debt) (Consequential Amendment) (England) Regulations 2021 came into effect which provides for a new prescribed form of Section 8 notice. This is required to be used to deal with the new Breathing Space regulations (The Debt Respite Scheme).
The effect of the Breathing Space regulations is that a Section 8 notice cannot be served in respect of rent arrears which form part of a breathing space plan. Further information on The Debt Respite Scheme can be accessed below:
In order to ensure that possession can be effective, great care should be taken to guarantee that the notice period provided for in any notice served is correct in accordance with the appropriate legislation in force at the time.
Even when the restrictions are lifted, The Debt Respite Scheme could provide tenants with a further means of delaying possession action where they are in rent arrears.
It has been suggested that from 01 October 2021 there will be a full return to normal pre-pandemic notice periods. However, this cannot be guaranteed until nearer the time. The Government is planning to publish a White Paper to set out new proposals for a fairer private rented sector which may involve the abolition of Section 21 entirely, such plans were due to be put in place before COVID-19. Therefore, it remains to be seen what further changes there will be in the next few coming months or years and how the Government believe they can achieve a fair balance between the rights of both the landlord and tenant.
The easing of the restrictions and lessening of the notice periods, albeit only slightly, is a positive move for landlords in their attempt to regain some control over their residential properties. However, there is still quite a long way to go before there will be a full return to pre-pandemic notice periods and possession proceedings generally.
For more information and support with tenant evictions, call us on 01332 227 591 or complete the form below.
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