Property Litigation FAQs
Barcan+Kirby’s property litigation solicitors continue to advise landlords, letting agents and tenants in all areas of property law.
During the coronavirus (Covid-19) pandemic, our litigation team was asked to assist both landlords and tenants affected by tenants unable to pay rent.
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 temporary provisions introduced under The Coronavirus Act 2020 expired on 25th March 2022.
The coronavirus 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 8th September 2021, the Government made further announcements easing some of the rules previously introduced for notice periods. Accordingly, from 1st October 2021 notice periods returned to pre-pandemic notice rules.
Can landlords go ahead with possession proceedings?
The suspension on procession proceedings expired on 20th September 2020. Therefore, possession proceedings are now continuing.
Renters’ Reform Bill
The Government pledged to bring the Renters Reform Bill to Parliament in the Queen’s Speech in May 2021. The Bill included proposals for the abolition of Section 21 ‘no fault’ evictions to give tenants greater security.
The Government announced that a white paper will soon be published, setting 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 temporarily 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 temporary provisions were originally in place until 30th June 2021 and were then extended a further five times, before expiring on 25th March 2022.
Separately, the restriction on the use of Commercial Rent Arrears Recovery (CRAR) also expired on 25th March 2022.
From 25th March 2022, property litigation for commercial landlords and tenants generally returned to the pre-pandemic status quo, subject to the introduction of The Commercial Rent (Coronavirus) Bill.
The Commercial Rent (Coronavirus) Bill
The Commercial Rent (Coronavirus) Bill came into law on 25th March 2022. The legislation covers protected rent arrears incurred by commercial tenants during the pandemic.
The Bill stops landlords from using any method (including making a debt claim in civil proceedings, using CRAR, using a tenant’s deposit, and enforcing a right of forfeiture), to recover protected rent arrears, other than arbitration.
This is in addition to the existing restrictions set out in the Commercial Rent Arrears Recovery (CRAR) procedure.
What are ‘protected’ rent arrears?
The rent arrears protected by the Commercial Rent Bill include rent, service charges, repairs and maintenance, management costs, insurance and interest on unpaid rent.
The criteria for this protection includes:
- Business tenancies
- Where the business and/or commercial premises were required to close under Coronavirus regulations, either fully or partially
- Rent arrears related to the ‘relevant period’, which begins as of 2pm on 21st March 2020 and ends at or before 11:55pm on 18th July 2021 (in England) or 6am on 7th August 2021 (in Wales).
The new legislation allows commercial tenants to ring-fence rent arrears which were accrued within specific periods during the pandemic as a result of their business having to close. Commercial landlords and tenants will have to agree on 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 of this will provide a binding agreement between the parties. The Bill is supported by a new Code of Practice which offers guidance on how parties should resolve their Covid-19 rent disputes.