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Guidance for residential landlords during the Covid-19 Outbreak
- AuthorMollie Leak
The last couple of weeks have been ones of change for individuals, businesses, landlords and tenants as we adjust to a new way of life in light of the Covid-19 pandemic. Guidance has been released from Government on how this impacts landlords and tenants, in particular with regard to evictions and payments. Mollie Leak, Solicitor in our Litigation and Dispute Resolution team, summarises the guidance and answers some of the key questions we are being asked at this turbulent time.
Can I evict my tenant using the Possession Proceedings Process?
For residential landlords, under normal circumstances, you are unable to evict your tenants without obtaining an Order of Possession from the Courts. To obtain such an order, you need to serve notice on your tenant, letting them know that if they do not move out after a certain date you will issue a claim against them.
There would then be a Court hearing, during which a Judge will decide whether to grant you an Order of Possession. If they do, they will give your tenant a date as to when they have to move out by and if they fail to do so you can instruct bailiffs.
However, in light of the Covid-19 outbreak the Government has decided that there need to be some changes made to this procedure during this time of national crisis.
Can I still serve notice on my tenants?
Section 81 and Schedule 29 of the Coronavirus Act 2020 has stipulated that all notices on tenants will be extended to 3 months. The notices that are used for an Assured Shorthold Tenancy (AST) are the Section 8 and Section 21 Notices.
A Section 8 Notice is used when your tenant is in breach of their tenancy agreement. One of the common grounds used when using a Section 8 is as a result of unpaid rent. You are only able to serve a Section 8 on the grounds of unpaid rent if your tenant is more than 2 months in rent arrears. You would usually provide your tenant with 2 weeks notice; however this has been extended to 3 months notice under new guidance. This law is applicable from now until 30 September 2020.
A Section 21 Notice is usually a “no fault” notice that is served on your tenant and is used when the fixed term of the tenancy is coming to an end or it has already ended. Most landlords use this notice if they wish to sell their property, usually providing their tenant with 2 months notice. However, this has been extended to 3 months notice and again, under Coronavirus Act 2020, this is applicable until 30 September 2020.
I served notice on my tenants before the outbreak; am I still able to issue proceedings against them?
The Coronavirus Act 2020 only applies to Notices that are served on or after 26 March 2020 until 30 September 2020. Therefore, if you served Notice on your tenant before then, as long as you followed the relevant guidance, your notice will still be valid.
However, the Ministry of Justice has issued guidelines (known as a Practice Direction) that must be followed. As of 27 March 2020, all possession proceedings including newly issued proceedings, ongoing matters or enforcement of any possessions proceedings are stayed (suspended) for a period of 90 days. The Government is strongly advising against issuing any new possession proceeding claims. Therefore, if your notice expires on 30 April 2020, for example, you should not issue proceedings until the end of June 2020 and even if you do issue proceedings your matter will be stayed for 90 days.
You should be mindful of this 90 day period as you only have a limited amount of time to issue proceedings once the notice has expired. If you have served a Section 21 Notice, you have 6 months after the expiry date. If you served a Section 8 Notice, you have 12 months to issue a claim after the expiry date. Therefore if you are running out of time to issue a claim with that notice, then the advice would be to issue the claim now.
I have an Order from the Court, can I evict my tenants?
In light of the current situation, you are not able to do this. The Ministry of Justice have said that they will not be granting any warrant of possessions for 90 days. Therefore, if you have an Order that says your tenant should move out on 30 March 2020, you are unable to enforce this until the end of June 2020.
My tenant is unable to pay their rent, what can I do?
The best solution might be to discuss matters with your tenant and come up with a short term arrangement for the rent payments with them. It may be that your tenant can pay only part of their rent now and would be willing to pay the rest of the rent in monthly instalments after the pandemic. It is important to remember that at the moment, you will find it difficult to find a new tenant and if they have been a good tenant so far, it makes sense for you to agree to a reduced rent.
If you are agreeing to a reduced rent then you should make a written agreement with your tenant that stipulates:
- what the rent is;
- how much will actually be paid by your tenant;
- for how long will you accept reduced payments; and
- whether you expect the difference to be paid and, if so, how.
If your tenant has been unable to pay rent during the Covid-19 outbreak and you want to evict them, you still have to wait until they are 2 months in arrears and serve a 3 month notice on them. It is unlikely that the Court will use its mandatory powers to evict a tenant who is in rent arrears. Instead it would appear that the Court is likely to suggest that the rent payments are delayed and will allow your tenant to continue living at the property.
If you are a landlord with questions about how you can proceed over the coming weeks and months during the Covid-19 pandemic, you can contact Mollie on 023 8071 7487 or email email@example.com. While we are not taking appointments at our offices, we are still open for business with our teams working from home, and are able to support you during this time of need.
This is for information purposes only and is no substitute for, and should not be interpreted as, legal advice. All content was correct at the time of publishing and we cannot be held responsible for any changes that may invalidate this article.