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Possession Stay Extends Until the End of August8th June 2020 Commercial Litigation
On Friday the Ministry of Housing, Communities and Local Government announced that the current stay on possession proceedings would be extended by a further two months, until the end of August 2020. This will apply to all possession proceedings including cases before the courts right now as well as any new case which is started.
This brings the end of the stay close to the end of the three month notice change created by the Coronavirus Act 2020 which runs until the end of September. The government says it is trying to avoid a surge of evictions at some stage but these actions seem calculated to ensure this occurs. This is not so much because landlords will start mass evicting tenants who are in arrears due to Coronavirus. In fact, some research suggests that over 90% of tenants are in paying their rent and others will have come to an agreement with their landlord. Rather, the backlog of eviction of other reasons- whether that is due to anti-social behaviour, moving back in, damage, or something else- will lead to a surge as all of these cases get brought before the court. There will also be the backlog of cases sitting before the court to be resolved. For landlords, this backlog will mean that possession cases are likely to take even longer than they already were and perfectly justified evictions will not take place. Tenants will suffer too as some landlords will leave the sector, reducing the supply of rental property, while others will be far more selective about who they choose to rent to in what is likely to remain a landlord’s market. Tenants are also likely to find their own legal cases backed up and so they will have as much difficulty obtaining justice as landlords.
So what can landlords do? For tenants who have no justifiable reason for being in arrears then landlords are perfectly entitled to issue claims for debt against them. These can be enforced while tenants remain in the property and will be effective in some cases where tenants can afford the rent but are taking advantage of the situation. Landlords who have expired notices and are determined to seek possession should probably issue proceedings now. They will be stayed but they will at least be in the queue as the courts re-open. As we head towards early September landlords will also want to think about notice timing. As my colleague, Neli Borisova, and I pointed out here, as we get close to the end of the notice period changes then there is a potential benefit to waiting and serving a much shorter period notice under the original regime. Finally, as always landlords should do everything they can to resolve situations amicably. It is better for both parties to do so.
As we move out of lockdown it is necessary to get things back to normal. It might have been better if the government had given more thought to a stay that moved this way rather than simply extending the current one. However, as things stand it seems that landlords will have to continue on until September.