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Comment from the MHCLG Minister on Coronavirus5th May 2020 Commercial Litigation
Robert Jenrick, the Secretary of State for Housing, Communities, and Local Government, has been giving evidence to the Commons Housing, Communities and Local Government Select Committee on the Ministry’s Covid-19 response. While he discussed a range of topics but there was also extensive discussion of the private rented sector which gave some insight into the thinking of government at the moment.
Currently all possession hearings are automatically being stayed for three months. They can be issued but will then be immediately stayed and proceedings that are in process are similarly stayed and nothing significant can happen. This stay is created by Practice Direction 51Z and ends 90 days after it was made, being 25 June. Asked if this stay would be extended, possibly for another three months the Minister said that this was something that would be decided in the early part of June. He expressed the original stay as being for the period that the worst effects were expected to last so it seems clear that if the lockdown is being eased by early June then the stay is unlikely to be continued but if it is still in full force the stay is likely to carry on.
The Minister made clear that a pre-action protocol to require landlords to work with tenants would be introduced before the stay ended. This is presumably the Pre-Action Protocol for Possession Claims by Social Landlords which is expected to be applied to the private sector. The exact shape of this protocol as applied to the private sector is yet to be seen and I will look at it in more detail in a separate post.
The Minister was asked about preventing rent increases for tenants when the current period of crisis ends. While there is no evidence that landlords intend to increase rents at the moment or after lockdown ends it has been suggested that they will. Notably the Minister entirely avoided this question so it seems unlikely that there is any particular plan in the government’s mind on this issue at the moment.
The Minister was asked about protections for lodgers as well. As they are not tenants and can be evicted without court orders, lodgers are entirely unprotected by the changes in the law. The Minister talked about this but did not propose any further changes and simply said that landlords and tenants (presumably he meant licensors and lodgers) should work together. So it does not seem that lodgers will be offered any further protection at this stage.
Finally, there was questions around the position of students. There is a quite varied response in this area in that some universities have allowed students to vacate halls of residence and refunded their money, others are requiring students to see out their accommodation agreements (whether they are in residence or not), and students in private-sector accommodation (whether in larger private halls or with individual landlords) are generally being expected to pay. The Minister said that the Secretary of State of Education was working on this area and would be saying something on it soon. However, he seemed to suggest that this involved universities only so it does not seem that students in the private sector will see much change.
The reality is that the situation remains fluid and landlords and agents will need to keep a close eye on what the government is saying. It seems increasingly clear that any reduction in the lockdown will be staged, where court action by landlords and tenants sits within those stages is somewhat less certain.
Partner and Head of Department
Commercial Litigation/Corporate Recovery and Insolvency