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Big Changes for Landlords and Tenants from 1 June13th May 2021 Commercial Litigation
The Parliamentary CLG Select Committee recently asked that the MHCLG set out its plans for unwinding the various measures put in place to protect tenants during the pandemic. Yesterday they did just that.
The stay on bailiff and HCEO evictions ends completely on 1 June and so landlords will now be able to enforce the various court orders they have obtained. Landlords could in principle apply for warrants now for action after 1 June but I am not sure that the Bailiff’s offices will allow this. There are suggestions of a massive burst of evictions as a result of this but I doubt that will occur. The reality is that the county court bailiffs simply do not have the capacity to do much more than they were doing pre-Covid and so I do not expect them to be doing that many more evictions than they were before the pandemic. The MHLCG press release suggests that there will be priority given to ASB and fraud cases but doubtless there will also be an element of first come, first served. The removal of the stay will also mean that all protections given to tenancies that fall outside one of the statutory regimes (non-Housing Act tenancies) and residential licences will lose all their protection from 1 June.
Also from 1 June there will be the start of a taper in relation to section 8 and 21 notice periods, which have been extended for the pandemic and the regulations to do this have already been laid. The first stage of the taper will last until the end of September.
Section 21 notices will have their notice period reduced from the current six month notice to a, more modest, four months. Still twice as long as the pre-pandemic two months. Landlords who have served a section 21 notice during May will probably want to serve it again after 1 June to benefit from a reduced notice period while landlords who were planning to serve a notice now may want to wait a couple of weeks. The use it or lose it time period will also drop in consequence of this change to ten months from the date of service to preserve the position of having six months from expiry to take action.
Section 8 notices are a little more complex. In general all notice grounds which required six months’ notice now only require four months’ notice. Notice grounds which had already had their notice periods shortened to their original pre-Covid timings are unchanged. So, notices citing 14 for anti-social behaviour will still expire as soon as they are served. Therefore, notices citing ground 12 for general tenancy breach, as an example, will have a reduced notice period of four months. For rent arrears using grounds 8, 10 or 11 the notice period will drop further to two months. However, if there are rent arrears which exceed the equivalent of four months’ rent at the time the notice is served then the notice period will drop to four weeks. This will apply even if the tenant reduces the arrears after the notice has been served. This represents a considerable step forward for landlords with arrears and landlords who have served section 8 notices for rent arrears should consider them carefully after 1 June to see if a fresh notice with shorter notice periods would be beneficial to them. Tenants who are in arrears will also start to see their protections evaporate and should now seek to reduce their arrears as much as possible.
The new notices have also already been made available and landlords and agents will want to look to update their documents.
There are transitional arrangements in the regulations which mean that the new shorter notice periods will not apply to notices served before 1 June but there is, of course, nothing to stop a landlord serving a fresh notice after that date.
In Wales, the end of the stay on evictions will also take effect but notice periods are a matter for the Welsh government who will do their own thing. The new ways of court working with the use of review and substantive hearings and the requirement to serve notices setting out what is known about the effects of Covid on the Defendant will remain in effect until the end of July. They will be reviewed at that point but my understanding is that there will continue to be some form of altered working arrangements well into the autumn as the courts seek to recover from their backlogs.
Landlords will no doubt be pleased about these upcoming changes, especially those who have court orders they have been unable to enforce. However, the whole sector will also benefit from a return to more normal ways of working. Hopefully the MHCLG will also see that giving more warning of changes is beneficial and will take this lesson to heart going forward.