Coronavirus implications for landlords and tenants
The Coronavirus Act (2020) (‘Act’) passed in March 2020 has affected the rights and remedies of landlords and tenants, including for instance changes to possession proceedings and the forfeiture of leases. This article describes updates in connection with the Act.
Forfeiture of commercial leases
To protect commercial tenants from the forfeiture of their lease, sections 82 and 83 of the Act provided for a moratorium on such forfeitures, which currently ends on 31 March 2021. Accordingly, before that moratorium ends, landlords will not be able to forfeit such leases for non-payment of rent, service charges and insurance.
The Act has also increased the threshold before landlords can exercise their rights under the Commercial Rent Arrears Recovery (CRAR) to enter premises and recover the value of unpaid rent. As of 25 December 2020, the minimum amount of unpaid rent must equal 366 days before the landlord’s entry rights can be triggered, an increase from the previous 276 days.
Residential tenancies
With regards to residential tenancies, Section 81 of the Act provides for extended notice periods for evictions.
For assured tenancies, notices for terminating the tenancy pursuant to section 21 of the Housing Act 1988 were extended to six months as from 29 August 2020. Prior to this, the notice period as from 26 March 2020 was three months, a one month extension to the usual two month notice period under section 21. Landlords can commence possession proceedings four months after the notice period ends.
Landlords seeking to terminate tenancies pursuant to section 8 of the Housing Act 1988 also need to observe new notice periods, which are similar to the notice periods under section 21. Thus, from 29 August 2020, the notice period increased to six months from the three month period in place since 26 March 2020.
Up to 25 March 2020, the notice period under section 8 was a maximum of two months with such period depending on the specific ground on which the tenancy was being terminated. Likewise now, the notice period under section 8 can be shorter than six months if the grounds for termination relate to issues concerning domestic abuse, anti-social behavior or where the rent arrears exceed six months. For instance, where the rent arrears exceed six months a landlord is required to give a notice of four weeks.
These notice periods are in place until March 2021 but may yet be amended further depending on the Government’s assessment of the social effects of the pandemic.
Possession proceedings
Possession proceedings were stayed beginning from 27 March 2020 until 20 September 2020. Such proceedings can now resume, but for possession claims brought before 3 August 2020, landlords are required to serve a reactivation notice for their stayed claim to proceed to a hearing. Such a notice will require the landlord to notify the court of any further impact the current pandemic may have had on their tenant.
Eviction Ban
Whilst the wide-ranging stay on bringing possession proceedings lifted in September 2020, on 17 November 2020 the Government introduced a ban on the execution of writs/warrants of possession and the delivery of notices of eviction lasting until 11 January 2021.
Today, Robert Jenrick MP has announced that the eviction ban will be extended until at least 21 February 2021. Given the likelihood of the nationwide lockdown extending beyond that date, it is probable that this date will be subject to further review.
Formal amendment of the Public Health (Coronavirus) (Protection from Eviction and Taking Control of Goods) (England) Regulations 2020/1290, which introduced the eviction ban, has not yet been implemented, but will follow today’s announcement and come into force prior to the current ban expiring.
Practitioners are reminded that there are important exceptions to the eviction ban, including:
- Trespass claims under CPR Part 55.6 (regulation 2(2)(a))
- Possession claims based on anti-social behaviour and domestic abuse grounds (regulation 2(2)(b) – (d))