Property Litigation FAQs
During this time of uncertainty, Barcan+Kirby’s Property Litigation solicitors continue to advise landlords, letting agents and tenants in all areas of property law.
Many of the questions our litigation team are being asked are from tenants who are struggling to pay their rent due to a change in their employment circumstances and from landlords whose tenants cannot pay their monthly amount and, in turn, are left without an income. Some of our frequently asked questions are below, and which our expert team have answered as best they can in this ever-changing climate.
What does The Coronavirus Act 2020 mean for residential landlords and tenants?
The coronavirus (Covid-19) outbreak has had significant implications for residential landlords and tenants. In response, the Government introduced a series of housing support measures, including extending the basic notice period for seeking possession of residential tenancies in England.
On 12th May 2021, the Government made further announcements partially easing some of the rules previously introduced for notice periods:
- From 1st June 2021, generally, landlords must give tenants four months’ notice when seeking possession (except in very few circumstances such as anti-social behaviour or rent arrears).
- Where there are rent arrears, the notice period will depend on the level of arrears:
- At present, less than four months’ rent arrears requires four months’ notice;
- From 1st August 2021, less than four months’ rent arrears requires two months’ notice; and
- Where the arrears are more than four months, currently, four weeks’ notice can be given, if relying on rent arrears only.
- The eviction ban ended on 31st May 2021. Bailiff appointments can therefore proceed but 14 days’ notice is required before an eviction can take place. Bailiffs have been asked not to carry out an eviction if anyone living in the property has Covid-19 symptoms or is self-isolating.
The above is the position until 30th September 2021.
The measures will ensure renters continue to be protected with longer notice periods for the coming months, while allowing landlords to access justice.
Can landlords go ahead with possession proceedings?
The suspension on procession proceedings expired on 20th September 2020. Therefore, possession proceedings are now continuing. For proceedings issued prior to 3rd August 2020, a re-activation notice was required by 30th April 2021. If a re-activation was not filed, the claim remains stayed.
All proceedings issued since 3rd August 2020 continue to proceed, however, some procedural changes are in place until 30th July, including the requirement to inform the court of the impact of coronavirus on the parties.
Renters’ Reform Bill
The Government has pledged to bring the Renters Reform Bill to Parliament in the Queen’s Speech. The Bill includes proposals for the abolition of Section 21 ‘no fault’ evictions to give tenants greater security.
The Government announced that a white paper will be published in the Autumn that will set out proposals to create a fairer private rented sector that works for both landlords and tenants.
What does The Coronavirus Act 2020 mean for commercial landlords and tenants?
As a result of the disruption to businesses, The Coronavirus Act 2020 introduced generous protection to tenants of commercial property, including a moratorium in respect of a landlord’s right to terminate a business tenancy due to rent arrears.
On 16th June 2021, the Government announced a further extension to the moratorium introduced by The Coronavirus Act 2020. Accordingly, the measures in place originally until 30th June 2021, which were then extended to 30th September 2020, then to 31st December 2020, then 31st March 2021, and then to 30th June 2021, have been extended further until 25th March 2022.
- Commercial landlords (of a relevant business tenancy) cannot enforce their right of re-entry or forfeiture due to non-payment of rent during the relevant period until 25th March 2022.
- Within current litigation relating to forfeiture for rent arrears, the tenant cannot be evicted during the relevant period.
Despite the above, forfeiture by peaceable re-entry is still available to commercial landlords where tenants are in breach and such breaches are unrelated to non-payment of rent or other sums due under their lease.
This seems to be a rent deferment for business tenants, however, the rent is still contractually payable. It is not a rent-free period. Landlords and tenants are encouraged to communicate.
Despite this, on 16th June 2021, the Government also announced their intention to introduce legislation to ring-fence the rent arrears which have accrued within specific periods during the pandemic and as a result of a businesses having to close. It is believed that landlords and tenants will have to agree a plan in respect of the ring-fenced arrears, such as a long-term repayment plan and/or the waiving of some of the arrears.
In the event an agreement cannot be reached, an arbitration process will follow; the outcome providing a binding agreement between the parties. We await further information.
Separately, the restriction on the use of Commercial Rent Arrears Recovery (CRAR) also continues until 25th March 2022. Therefore, a minimum net of 554 days rent arrears are required to use CRAR.