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All bets are off for obtaining possession against all occupiers of residential properties - for now - but landlords may still enforce their rights in other ways30th March 2020 Commercial Litigation
In my previous article I talked about the possible ways in which the government might prevent landlords from obtaining possession from existing tenants of residential property during the coronavirus lockdown period and the way the law might be changed.
The government has now provided amendments to existing legislation in the Coronavirus Act 2020 ("the Act"), section 81. This provides for schedule 29 to have effect and effectively extends notices to be given to obtain possession of various tenancies (assured shorthold, shorthold, introductory, demoted, secure and other protected and statutory tenancies under the Rent Act 1977), all for a period of three months in place of the existing shorter periods that could otherwise be specified. Thus, rather than focus on enforcement of possession orders at that end of the process as I had anticipated in my previous article, the government has instead focused on the start of the process in terms of the length of relevant notices that need to be served before possession claims can be brought in the court.
Going back to my previous article, the court's discretionary powers have therefore not altered towards the end of the process. The relevant period during which the extended notice provisions operate currently ends on 30 September 2020 (contrasted with the position with business premises of 30 June 2020) but may subsequently be extended. Therefore it is unlikely the court's exercise of its discretion would need to be altered because the time by when it would consider this would be after the end of the relevant period.
No alteration has been made to the notice period to be given for any common law tenancies (defined in paragraph 1 of my earlier article) which are either periodic or of a fixed term (where no notice need be served at all before commencing a possession claim). Similarly, licences to occupy are unaffected as they too are not governed by the Rent Act 1977. However, for practical purposes where the fixed term has ended or a valid notice to quit has been served and the term has ended, under the Protection From Eviction Act 1977 if any person is lawfully residing in the property, a possession claim must still be brought and this is far more likely during the relevant period, where an occupier is unlikely to have left their property even where it has been sub-let, say from a company, under a common law tenancy. Trespasser claims would still be unaffected.
However, on 26 March 2020, the government gave guidance that from 27 March 2020 the Court Service would suspend all ongoing housing possession actions, which would include cases currently proceeding or about to proceed in the system and so would include all kinds of residential occupiers.
Since then a Court Practice Direction (51Z) has been issued on 27 March 2020, in summary providing for a stay (temporary halt) of all possession proceedings or enforcement of possession orders already made in possession proceedings for a period of 90 days from then (which would expire on 25 June 2020 and which could be extended subsequently, although it is to cease to have effect on 30 October 2020).
Consequently, in reality, for existing and future possession proceedings, there will be a substantial delay in landlords being able to use these processes to recover their properties. This has the much wider effect than the Act envisaged of applying to common law tenancies, licences and trespassers. It also includes possession proceedings brought by mortgagees. However, firstly, this does not prevent claims from being issued in reliance on any entitlement to possession that has arisen, whether or not after service of a notice of the correct duration, but they will be stayed on issue and unlikely to be served.
Secondly, this does not provide for tenants any rent "holiday" and nor can they fail to comply with other obligations under their tenancies during the relevant period and not have anything to worry about. Thus:
- in relation to non-payment of rent, a landlord may still pursue a tenant for rent arrears (not already the subject of existing proceedings), obtain a money judgment and enforce that; and
- in relation to any other breaches, the landlord may seek an appropriate order by way of an injunction and enforce it (which the practice direction has confirmed is still an available remedy).
A landlord will therefore be well advised to remind any tenant who has not been or it is feared might not comply with his obligations under the tenancy of the continuing need to do so and the consequences for failure, even where the consequence of obtaining possession cannot presently be sought. Further, where a landlord is entitled to have a possession claim issued, he should do so anyway and inform the tenant of that step being taken, send him a copy of the filed proceedings and explain that they will be served soon after the relevant period has expired. (Where a notice might expire, such as one served under section 21 Housing Act 1988 or there is a limitation period that is due to expire, then a landlord will have to bring a claim regardless of the stay.) For a tenant, he should appreciate the need to comply with his obligations as well and appreciate the consequences of not doing so, including ultimately losing his home at some point after the end of the relevant period. Complying with his obligations in the meantime will make it far more likely that a landlord will not seek possession later on.