The Ministry of Housing, Communities and Local Government has announced a series of changes and restrictions on landlords regaining possession of their property during the Coronavirus pandemic (COVID-19). The new regime is intended to be temporary and the motivation behind them is to ensure that tenants are not made homeless during this challenging time.
Below we have summarised important changes that we consider to be vital for every residential property landlord to know about the COVID-19 emergency legislation.
What are the main changes landlords need to be aware of regarding possession of Property?
Emergency legislation has suspended new evictions of both private and social rented accommodation from taking place whilst this national emergency is taking place
In addition, no new possession proceedings can be issued with the court during this time of crisis. At present, this is expected to last at least three months.
Once the embargo is over, landlords will be expected to cooperate more fully with tenants before attempting to evict them, and will be required to comply with the pre-action protocol which is likely to be similar to that which currently binds social landlords (further information below).
If a tenant is not paying rent (as a result of COVID-19) and the Landlord is struggling financially to meet their mortgage obligations, the new legislation provides landlords with buy-to-let mortgages the ability to seek a three-month mortgage payment holiday from their lender. The three-month break will enable landlords to manage their liabilities and avoid defaulting on mortgage payments.
Does the suspension on repossessions apply to ongoing possession claims?
The Government have said “landlords will not be able to start proceedings to evict tenants.” Therefore, if a claim has been commenced prior to the emergency legislation coming into place (18 March 2020) it is likely to proceed. However, if the landlord is successful at the possession hearing, the date for vacant possession will not be before 18 June 2020 (which may change) and no bailiffs will be operating during that time.
Landlords should note that whilst the County Court intends to continue their essential business, there may be delays in receiving hearing dates.
In relation to the attendance at possession hearings, the Government have said “as long as you, or the people who have to come with you, do not have confirmed or possible coronavirus (COVID-19) infection or do not need to self-isolate in line with NHS advice, you should continue to attend courts and tribunals as planned.” However, the courts are likely to move to remote hearings wherever possible and an effort is being made to undertake as many hearings as possible remotely so as to minimise the risk of transmission of COVID 19.
Can landlords serve a notice seeking possession during this suspension?
The Government’s guidance does not specifically address whether a Landlord can serve a notice seeking possession during this suspension, it only refers to “starting proceedings”. It is theoretically possible to serve a notice seeking possession. However, once the notice has expired a claim for possession cannot be commenced until after the three-month embargo has lapsed. Guidance on this issue is rapidly evolving and landlords may consider holding off the service of a notice until further guidance on this issue is provided by the Government.
Can possession proceedings be commenced when the landlord is relying on a ground other than for rent arrears (for example, breach of the tenancy agreement)?
The Government guidance is silent on this point and Meaby are currently in talks with the Ministry of Housing, Communities and Local Government to obtain clarification on this. The Ministry informed our firm that the aim is to avoid making any tenant homeless during this crisis and therefore, based on the current information, landlords will not be able to commence possession proceedings, irrespective of the ground relied on. Further guidance on this point will follow.
What do landlords need to know about the Pre-Action Protocol?
Once the suspension on possession proceedings has been lifted, landlords will be expected to comply with a set of rules called the Pre-Action Protocol before commencing a possession claim. This is a significant reform to the current procedure and aims to encourage dialogue, exchange of information and engagement between landlords and tenants before commencing a possession claim.
The Government is working on widening the “Pre-Action Protocol for Possession Claims” which currently applies to social landlords to also include Private Rented Sector landlords. The Government has not indicated to what extent the currently drafted Pre-Action Protocol for Possession Claims which binds social landlords will be amended before being extended to Private Rented Sector Landlords, however, the general aims of the protocol are likely to be similar.
The general aim of the Pre-Action Protocol is to encourage landlords and tenants to avoid litigation by settling the matter if possible and to enable court time to be used more effectively if proceedings are necessary.
A greater focus is likely to be placed on landlords to take reasonable steps to ensure that their tenant understands any information given. The landlord is likely to be expected to demonstrate that reasonable steps have been taken to ensure that information has been appropriately communicated in ways that the tenant can understand.
What are the consequences if a landlord does not comply with the Pre-Action Protocol prior to commencing possession proceedings?
Where the landlord has unreasonably failed to comply with the Pre- Action Protocol the court may make an order for costs against the landlord, an order adjourning the claim or an order striking out or dismissing the claim.
More information about the emergency legislation impacting the Private Rented Sector will be published by the Government in the near future. The Property Litigation Team at Meaby are continually reviewing Government announcements and will provide further guidance and commentary in the coming weeks.
If you have any questions, we are currently offering 30-minute free consultations for landlords and tenants. Please get in touch today.
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