Suspension of Possession Proceedings Announced by the Government
The Government has this week announced a complete ban on the issue of possession proceedings by landlords across the country. The announcement came after the Government faced increased pressure from tenants to mirror the financial reliefs already offered to homeowners, by way of a three month ‘mortgage holiday’.
Whilst the measures are aimed at protecting tenants from eviction if they are affected by the Coronavirus, the Government has also vowed to safeguard landlords by allowing a halt on interest payments to those who have received a government backed ‘Help to Buy’ loan, where their tenants struggle to make payments due to the Coronavirus. This is in addition to extending the residential ‘mortgage holiday’ to all landlords affected by the pandemic.
Housing Secretary, Robert Jenrick MP stated:
“The government is clear – no renter who has lost income due to coronavirus will be forced out of their home, nor will any landlord face unmanageable debts.
These are extraordinary times and renters and landlords alike are of course worried about paying their rent and mortgage. Which is why we are urgently introducing emergency legislation to protect tenants in social and private accommodation from an eviction process being started.
These changes will protect all renters and private landlords ensuring everyone gets the support they need at this very difficult time.”
It is therefore clear that the Government will be taking unprecedented measures to ensure possession proceedings are not commenced at this time by the introduction of emergency legislation. At this juncture, it is unclear what these measures will mean for landlords who are considering taking steps to evict tenants for reasons wholly unrelated to the pandemic. Further, it is unclear what these measures will mean to those landlords who have already taken steps to evict tenants through service of the relevant notice or to those landlords who are seeking to enforce an Order for Possession which has already been obtained.
Of course, our solicitors at Ellis Jones will continue to monitor the Government’s position and adhere to any guidance as and when it is released. It is worth noting that at this time, no draft legislation has been released; however, below we outline our preliminary advice for those landlords and tenants who are facing this unprecedented position:-
Can I Serve A New Section 8 or Section 21 Notice?
It is understood that the Government has worked closely with the Master of the Rolls to widen the Pre-Action Protocols applicable to possession proceedings, with the intention of encouraging engagement between landlords and tenants who face additional financial pressures due to the pandemic. There has, however, been no definitive guidance on whether landlords are able to serve their tenants with a Section 8 or Section 21 Notice during this time.
In these circumstances, there is no current legislation or guidance preventing a landlord from serving their tenant with a notice of eviction, especially where any grounds for eviction are wholly unrelated to the virus outbreak. However, it may be prudent to consider the potential difficulties which will be encountered in enforcing any such notice by way of possession proceedings, in light of the 3 month suspension, together with the reasonableness of doing so.
Notwithstanding the above, a landlord must commence possession proceedings within 6 months of serving their tenant with either a Section 8 or Section 21 Notice under the Housing Act 1988. As such, any landlord wishing to evict their tenant has the option of serving their tenant with Notice during the 3 month suspension, and choosing to commence possession proceedings once the suspension has been lifted. Should the Government choose to extend the suspension beyond the requisite 6 month deadline; landlords will be able to serve a further Notice, therefore providing a further 6 months in which to commence possession proceedings.
Can I Commence Possession Proceedings that are unrelated to the Coronavirus?
The current guidance issued by the Government does not specify whether there will be a blanket ban on all possession proceedings for 3 months, or whether the ban only applies to those tenants who have been adversely affected by the pandemic. In these circumstances, and until we have more definitive guidance from the Government, we advise that no landlords commence possession proceedings at this time.
Can I Enforce a Possession Order?
Again, there is no definitive guidance as to the enforcement of possession orders during the 3 month suspension. As such, we consider that landlords may continue to enforce possession orders through the courts unless and until the Government releases guidance as to the contrary. Of course, this position is subject to review and we encourage landlords to seek advice as to their specific circumstances.
Should I Agree a Reduced Rent with My Tenant?
During this time we advise that landlords should wait until they are approached by their tenants before agreeing to any variation in rent. Agreeing to a variation before a tenant has requested relief from payments may prejudice their position when it comes to requesting a ‘mortgage holiday’ from their Lender, when citing non-payment of rent.
It is also prudent to make clear to tenants that any shortfall in rent due to the Coronavirus is to be made up at the end of the
suspension period. The Government have advised that landlords and tenants are expected to work together to establish an affordable repayment plan once the measures have been lifted. We advise landlords to formalise these terms by way of a written agreement for any payment variation to avoid setting a precedent for future non-payment once the suspension has been lifted.
How can Ellis Jones help?
At Ellis Jones, our landlord and tenant solicitors are highly experienced in the field of Landlord and Tenant Law, including advice on evictions, possession proceedings and enforcement.
If you are a landlord or tenant and require advice, contact our Dispute Resolution Team by calling 01202 525333 or by emailing Clair.Phillips@ellisjones.co.uk to discuss your needs and how we may be able to assist you.