A new year and a new lockdown. Unfortunately, the 4 Tier system could not halt the growing infection rate, meaning we are all subject to the latest set of restrictions. Yet again, the government has tweaked the rules and regulations of the lockdown, meaning that it is not exactly the same as its predecessors.
Residential landlords can be forgiven for feeling somewhat confused as to what this means for regaining possession of their properties, given all the changes to the system since March 2020. Thankfully, at Pardoes we have once again dissected the rules and set out below what the impact of Lockdown 3.0 is for residential landlords, including some positive news for landlords.
Before diving in, it is helpful to remind ourselves of what the procedure is. To give a basic overview, there is essentially 3 stages to regaining possession of a residential property:
Stage 1: Serve a notice to quit on the tenant. This will be in the form of either a Section 8 or Section 21 Notice
Stage 2: If the tenant does not vacate the property when the notice expires, it will be necessary to start court proceedings and bring a claim for possession.
Stage 3: If the claim is successful, the court will make an order for possession, giving the tenant a fixed date whereby they must vacate the property. If the tenant does not vacate by this date, the landlord can apply to the court for a writ of possession. This is the ‘eviction’ stage and will enable certified bailiffs and High Court enforcement officers to physically evict the tenant from the property.
As detailed in the November 2020 edition of our Property Insight, since the stay on possession proceedings was lifted in September 2020, there have been changes to the notices required to be given in Stage 1 of the process. Landlords must now give 6 months’ notice for both Section 8 and Section 21 notices, before they can proceed with Stage 2 and commence proceedings. There are some exceptions for the most serious of cases: extreme rent arrears, domestic violence and anti-social behaviour.
The extended notice periods are due to stay in place until 31 March 2021. However, Secretary of State for Housing, Robert Jenrick, has confirmed that the measures will be reviewed regularly. Given that the period when extended notice is applicable was last extended in August 2020, it would not be surprising if it is again extended past 31 March 2021, especially when considering that there have been 2 national lockdowns since then. This is a branch of the law which heavily favours the tenant.
Once the relevant notice period has expired, landlords may commence with Stage 2. Thankfully, the claim procedure and hearing procedure is largely the same as it was prior to the COVID-19 outbreak. There are however some notable changes in that landlords must provide the court with information on the effect of the pandemic on the tenant, and there is now a review hearing conducted by the judge in private, prior to the hearing where a possession order will be made.
Once the court has made a possession order, landlords will be at Stage 3. It is at this stage where Lockdown 3.0 has a say on matters. If the tenant has not vacated the property by the date fixed in the possession order, then the landlord must apply for a writ of possession, enabling a bailiff or High Court enforcement officer to evict the tenant.
Landlords will recall from our previous Property Insight that there was a restriction on evictions from 11 December 2020 to 11 January 2021 (the affectionally-named “Christmas Truce”). No doubt many landlords were eagerly anticipating the expiry of these restrictions, however on 8 January 2021, the government announced that the ban on evictions would continue until 21 February 2021 (when the government hopes to lift the national restrictions). This announcement was given legal standing by virtue of The Public Health (Coronavirus) (Protection from Eviction) (England) Regulations 2021 (SI 2021/15) (New Regulations).
As promised, there is at least some positive news for landlords. There are exceptions to the ban on evictions where the writ of possession relates to an order for possession made:
These are the same exceptions as the Regulations which the New Regulations replace, with 1 crucial difference. The definition of substantial rent arrears has now been expanded. Substantial rent arrears now means 6 months rent arrears, rather than 9 months rent arrears. Importantly, rent arrears accrued since the first lockdown in March 2020 can now be counted towards the total amount owed. In the explanatory note released with the New Regulations, the government has stated that the exemption has been widened to balance the impact of the extension on residential landlords. We will leave it open to your interpretation as to whether this does indeed ‘balance’ the impact.
Finally, a word on the ‘Breathing Space Scheme’. This is scheme which is going to be introduced in May 2021 to help people who cannot or are unlikely to be able to pay their debts, formerly known as the Debt Respite Scheme. Residential landlords need to be aware of this scheme because rent arrears are a qualifying debt, amongst others. The scheme is only accessible through an approved debt advisor registered with the Financial Conduct Authority or a local authority.
On successful application by a debtor, the scheme will freeze creditor action, including landlords making claims for rent arrears. This means that landlords must stop all action to recover the debt until the ‘breathing space’ period has expired.
The length of the breathing space period will depend on the type of relief applicable. There are two types of relief:
Residential landlords also need to be aware that interest and other charges will not accrue whilst the breathing space period is active. For further information on the breathing space scheme, please see our blog: https://www.pardoes.co.uk/blog-entry/2021/01/19/breathing-space-scheme-to-be-introduced-to-help-millions-in-debt/368/
Despite the ban on evictions, we encourage residential landords to get their house in order now and start the process, before tenants can apply to the breathing space scheme and because it is increasingly likely the extended notice periods will continue past 31 March 2021 but there is now an end in sight with the introduction of the vaccines.
If you would like to discuss your matter further with one of the residential landlord & tentant experts at Pardoes, then please contact Jack Manning (jack.manning@pardoes.co.uk) or Sasha Loveridge (sasha.loveridge@pardoes.co.uk) or telephoning 01935 382680.
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