A summary of the recent changes to the procedures for possession of residential property.
The Coronavirus Act 2020 (CVA) which came into force on 26 March 2020 changed the possession procedures for assured shorthold tenancies as follows:
- From 26th March 2020, the notice period for Section 21 and Section 8 notices seeking possession is extended to 3 months, until 30th September 2020.
- From 27th March 2020, all possession proceedings are suspended for 90 days, as are all proceedings to enforce possession orders by writ or warrant of possession.
- Landlords are going to be expected to follow the possession of pre-action protocols that already exist for social landlords.
Section 8 Notices
Section 8 notices under the Housing Act 1988 are most commonly used for claims on grounds of rent arrears but are also used for other grounds under Schedule 2 of the Housing Act 1998. Previously the notice period for Section 8 notices on rent arrears grounds was only two weeks. Now landlords will have to wait 3 months before the notice expires and they can start possession proceedings.
The prescribed form of notice has been changed by the government to reflect the new notice period.
Section 21 Notices
Section 21 notices seeking possession under the Housing Act 1988 do not rely on any reason (ground) for possession. As long as the required time has passed since the start of the tenancy, and provided the notice does not expire before the end of the fixed term of the tenancy, (and subject to other legal requirements being met) a landlord may serve a Section 21 notice requiring possession of their property. Previously, the notice period was two months. The CVA has extended it to three months.
As with Section 8 notices, a new Section 21 notice (form 6A) has been published to reflect the increased notice period and should now be used until further notice.
The CVA also gives the power to extend the new three-month notice period to six months in future.
What about notices already served and proceedings already started?
The CVA suspends any possession proceedings already started before 27th March 2020.
If you’re a landlord that served a Section 8 or 21 notice before the CVA came into force, it is still valid. In theory, at least, you can rely on it to start possession proceedings. It is likely that the court would issue your possession claim, but then because of the CVA suspending all possession proceedings for at least 90 days, it would probably immediately be suspended, so would go nowhere at all until at least the end of June 2020. It is questionable whether it is worth paying the court fee and issuing the claim at this time; there may be something gained from “getting in the queue” ready for when the courts resume to something more like normality.
What is the Pre-Action Protocol for Possession Claims?
It can be found here on the Justice.gov.uk website. https://www.justice.gov.uk/courts/procedure-rules/civil/protocol/pre-action-protocol-for-possession-claims-by-social-landlords
It is a set of steps which encourages pre-action contact between landlords and tenants in order to avoid the need for court proceedings. The requirement to follow the protocol for private tenancies has not yet come into force, but as it applies to conduct at the time of serving notices, it is recommended to start following it for any new notices being served going forward. Check the link above for the full detail of the protocol or seek our advice. In brief, it includes steps such as providing rent statements, making contact with the tenant, assisting with benefits claims, trying to get benefits paid directly to the landlord, and encouraging the tenant to get independent advice and help. Before serving a Section 8 notice on mandatory rent arrears grounds or a Section 21 notice, the landlord has to write to the occupants explaining why they intend to seek possession and give them a specific timeframe to make representations about their personal circumstances or other matters they wish the landlord to take into account. The landlord may send this as a letter together with the section 21 or section 8 notice. The landlord should consider any representations the tenants makes, and if they still intend to go ahead with possession, explain why. Once possession proceedings have started, there is additional information that the landlord must include with the court papers, and provide to the tenant, including details confirming that the protocol has been followed.
What are the effects?
Clearly these are measures designed to protect tenants from eviction, to allow them to isolate in their homes, and to prevent increased homelessness being added to the burdens already placed on stretched services due to the pandemic. It cannot be denied that it puts a burden on landlords to some extent, who will be unable to do anything about getting possession from problem tenants for a far longer time than previously. This could cause a real issue for landlords that have anti-social or criminal tenants causing problems for neighbours because even the grounds relating to these issues have been extended to three months. On these urgent grounds, they will have to turn instead to local authorities and the Police for assistance (if any is available) until they can get possession. In terms of rent arrears, it must be remembered that the CVA does not give tenants a rent holiday, or in any way release them from their obligation to pay rent. If tenants are employed and have been furloughed, they should be receiving 80% of their usual salary, so they should be in a position to negotiate a temporary reduction in rent rather than failing to pay any rent, with an agreement to catch up with the payments at a later date. This could be over the lifetime of the tenancy or over a set agreed period. We can help if you have come to an agreement with a tenant and would like to record the agreement in writing, which is recommended. The key is to have a dialogue with tenants and try to encourage at least some payment. For less fortunate tenants that have lost their jobs, or who are self-employed but without income at the moment, it is likely to take some time for their benefit payments to start due to the overwhelming demand and landlords could find themselves with little hope of receiving rent for some time.
Landlords who rely on the rental income to cover mortgages may be reassured by the fact that mortgage possession claims, including for buy-to-let mortgages are also suspended by the courts. They might find they are covered by insurance for the unpaid rent (although they might have to serve a notice seeking possession in order to trigger the insurance claim, check the specific policy wording) and they might be able to arrange a mortgage payment holiday with their lender.
For advice on residential or commercial property matters, contact Sarah Coates-Madden.