In an attempt to avoid – or at least delay – large scale evictions of tenants who cannot pay their rent due to losing their jobs or being placed on furlough at reduced pay, the government has implemented two measures to slow down the eviction process.
The first measure was to extend the amount of notice that landlords must give to tenants. The section 8 Housing Act 1988 procedure, most often used where a tenant has failed to pay rent but also available for other tenancy breaches, normally requires a notice period of just 2 weeks where there are rent arrears. The section 21 “no-fault” procedure normally requires 2 months’ notice. However, the government has extended the required notice under both sections to 3 months. That means that any notice served between 26 March and 30 September 2020 must expire no earlier than 3 months after the notice is served on the tenant.
Notices served before 26 March 2020 are unaffected by this measure, but are instead affected by the government’s second measure, a 90-day stay on possession proceedings which took effect on 27 March. This means that possession claims already in the court system will not progress, nor will court bailiffs be allowed to attend properties to enforce a possession order already in existence.
So if you are a tenant:
• You still have to pay rent in the usual amount on the day each month unless your landlord agrees otherwise.
• However, if you fall behind and your landlord serves you with notice, the notice cannot expire any earlier than 3 months from the date notice was served on you.
• If you were served with notice before 26 March or were already involved in possession proceedings, the court will not taking any action or making any orders until 25 June 2020 at the earliest.
• However, your landlord could still sue you for any unpaid rent as a debt as there is no stay of proceedings as yet for these types of claims.
And if you are a landlord:
• Remember that “you can’t get blood out of a stone” and so there is little use threatening legal proceedings against someone who can’t pay rather than won’t pay.
• Consider negotiating a deferral or reduction in rent, and don’t forget you may be able to apply to your mortgage lender for a 3-month payment holiday.
• You may wish to consider preserving your legal position by serving notice anyway in order save time if the tenant is unable to maintain any payment agreement and to be ready to issue proceedings when the stay on proceedings ends if you need to do so. A section 8 notice will only go “stale” 12 months from the date of service, after which time a fresh notice will need to be served. For a section 21 notice, that time limit is 6 months. If you do serve notice after having reached a payment agreement with your tenant, you might want to reassure them that you have done so merely to protect yourself and urge them to comply with the agreement as you will also do.
• If you intend to serve a section 21 notice, check that you have completed all the steps needed before you can do so. The technical guidance mentioned below has a very useful checklist of those necessary steps.
• There are now new court forms for bringing and defending possession claims based on a section 21 notice that go into substantial detail about prescribed information, protecting deposits, etc., and so we recommend that you review the claim form before you even serve a section 21 notice to ensure you can give complete and favourable answers if you have to start possession proceedings.
The government has published helpful guidance on the effects of these measures for both landlords and tenants along with technical guidance on notices that is more geared towards landlords.
To end with, a heads up to landlords that the government is planning to expand the pre-action protocol for possession claims by social landlords to private landlords. The protocol requires social landlords to inform tenants of why they are seeking possession, to discuss the tenant’s financial circumstances and why the tenant is in arrears, and to consider alternative dispute resolution. The protocol will be adapted for private tenancies but it’s not yet known how as nothing has been published, so keep an eye on the Meade King website for updates.
Contact Linda today for friendly expert advice and she will be happy to help.