On 08.03.20 the government announced a “radical package of measures to protect renters and landlords affected by coronavirus.” The package is to include emergency legislation to suspend new evictions.
The announcement says that there would be no new possession proceedings started during the crisis, or for at least 3 months. At the end of 3 months (or whatever longer period) a new pre-action protocol will apply to possession claims that will expect landlords and tenants to work together and arrange an “affordable payment plan.”
The guidance mentions widening the existing eviction pre-action protocol that applies to social landlords, to include private landlords. These, possibly permanent changes, will involve additional tasks and delay for landlords before eviction proceedings can be progressed.
There will also be guidance asking landlords to show compassion to defaulting tenants before seeking to evict.
The announcement includes a mortgage payment holiday for landlords.
What’s Happening with Eviction Claims?
The Coronavirus Bill was published on 19.03.20 and there was no mention of measures to protect landlords and tenants. These measures were added to the bill later.
It now appears that landlords can still give notice on fault grounds (s.8 HA 1988) or notice only (s. 21 HA 1988). However, in all cases and for all grounds the notice period is 3 months.
There is no prohibition on issuing possession proceedings. In any event, the reason for the eviction at this stage will not be related to corona virus. It is expected that the court will issue the claim. However, currently different courts are taking different approaches, and the claim may not be listed for hearing for many months.
The situation with the courts is changing hourly.
The 3-month notice period is not in force at the time of writing but is expected to pass into law very quickly.
This may well all be academic. The courts have been receiving a certain amount of criticism for remaining in operation as normal. However, a rapidly increasing number of courts are adjourning or cancelling eviction (and other) hearings now. Advocates are returning briefs as they are self-isolating. This is only going to get worse as more people isolate themselves and possession matters are not going to be a priority.
Current Issues with Possession Claims and Evictions
The proposals in the bill are deeply unjust to landlords. If as a society, we decide that certain people need financial support, it is up to us as a society to provide that support. It is surely immoral to enforce one private individual to support another, completely unrelated individual. That is the effect of suspending possession claims and evictions.
Not being able to evict defaulting tenants will obviously increase arrears. In many, if not most cases, landlords will never recover those arrears.
Whilst, it’s true that mortgage lenders are to offer 3 month payment holidays, and this will include some buy to let mortgages, the fact is that mortgage lenders will recover every penny they are owed, including any costs and fees, when the property is re-mortgaged or sold; landlords will not. Furthermore, not all landlords have mortgages and not all mortgage lenders are offering relief to buy to let borrowers.
Protection from eviction for people who lose income as a result of the current crises could be a good thing, but this protection is open to abuse to the benefit of bad tenants who should be evicted for reasons unconnected with corona virus. For example, those whose arrears are long standing, or who are being evicted for anti-social behaviour or other reasons. Surely that’s also fundamentally wrong.
The reality is that it is probably academic. Some courts are already adjourning possession claims for several months. The adjournments may be extended if the situation doesn’t improve. This means that possession orders will be unobtainable, and consequently, defaulting or otherwise misbehaving tenants will not be evicted. Even if you did obtain a possession order, it seems unlikely that it will be enforced in the foreseeable future. Bailiffs may not be available and being evicted is likely to bring tenants into contact with a significant number of people so courts will be reluctant to enforce possession orders and evict tenants.
Can Landlords Progress Eviction Cases?
Landlords can still give notice on fault grounds (s.8 HA 1988) or notice only (s. 21 HA 1988). However, in all cases and for all grounds the notice period is 3 months. Bear in mind that s. 21 notices in England only last 6 months from when they are served, and the new bill envisages the possibility of extending the notice period to 6 months. This would invalidate the notice unless additional provisions are made. Section 8 notices last a year. Hopefully we will be back to some sort of normality by then.
It’s probably inevitable that there will be no evictions for the foreseeable. Possession lists at court are a series of very short hearings blocked together. This clearly involves a number of strangers coming together in a confined space, which obviously isn’t what we want to be doing at the moment.
Most tenants are unrepresented, at least until they arrive at court for a possession hearing, and many will not be able to deal with a hearing by Skype or similar. There is therefore an inherent unfairness to proceeding with possession claims. Some tenants will be unable to take part in proceedings that could have very serious consequences for them. Possession orders would be highly susceptible to applications to set them aside. Applications to set aside or suspend possession orders cause additional cost and delay to landlords, and will be an unwelcome additional burden on the a court service already struggling.
It looks as though the courts will have little option but to adjourn possession claims; and so, landlords will be greatly financially prejudiced. A mortgage payment holiday will not benefit all landlords and in any event is only a deferral of payments. Much of the inevitably unpaid rent will crystallise into a permanent loss.
So, it’s tough luck on landlords. The last few years have been an increasingly difficult to time to be a landlord, and the outlook for landlords remains stormy. However, particularly where possession claims are not caused by corona virus, it would seem sensible to progress any possession claims as far as possible, issue eviction notices where you can and issue possession proceedings where you can.
Simon J Vollans & Co
25.03.20
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