Rent, mortgage payments and protection from eviction during the Coronavirus (COVID-19) outbreak

07 Apr

Do tenants still have to pay rent during the outbreak?

 

The government’s guidance is that tenants should continue to make payments for rent. If you are a tenant and are unable to do so you should speak to your landlord at the earliest opportunity as the rent amounts in your tenancy agreement remain legally due.

 

You should speak to your local authority if you are concerned about immediate eviction. If you have financial difficulties due to a change of circumstances such as employment or earnings, you may qualify for Universal Credit. You can apply online for Universal credit by visiting https://www.gov.uk/apply-universal-credit or by dialling 0800 328 5644. For the next three months due to the outbreak there is no requirements to attend Jobcentre Plus or medical assessments.

 

Protection for tenants

 

Most residential tenancies are assured tenancies under section 1 of the Housing Act 1988 or assured shorthold tenancies under section 19A HA1988, as amended by section 96 of the Housing Act 1996. (Discussion of tenancies under the Rent Act 1977 and the Housing Act 1985 is beyond the scope of this piece.) In most cases an assured shorthold tenancy is simply an assured tenancy that came into being on or after 28th February 1997, the date on which section 96 HA1996 came into force, although an assured shorthold tenancy can come in to being under section 5 HA1988 (again, beyond the scope of this piece).

 

Landlords can currently get possession of properties let on assured shorthold tenancies under the no fault eviction route by serving a valid notice under section 21 HA1988 when the tenancy has come to an end (and provided that no further assured tenancy on the property has come in to being). Alternatively, under section 7 HA1988, landlords can get possession of any assured tenancy where a tenant is at fault, for example not paying rent or engaging in anti-social behaviour. Under section7 HA1988, landlords can get possession by first serving a valid notice under section 8 HA1988, and then establishing at Court one of the grounds for possession set out in schedule 2 to HA1988. The grounds most likely to affect tenants during the Covid-19 outbreak, are grounds 8, 10 and 11, which relate to the non-payment of rent.

 

Tenants under assured tenancies now have a degree of extra protection under section 81 of the Coronavirus Act 2020. Section 81 – with reference to schedule 29 CA2020 – extends statutory notice periods relating to assured and assured shorthold tenancies to no less than three months. This has important implications for landlords seeking possession under either section 7 or section 21 of the Housing Act 1988: until 30 September 2020, all section 8 and section 21 notices served must not expire within a three-month period. This means that once a landlord has served a section 8 or section 21 notice on a tenant, the landlord cannot then start proceedings to obtain an order for possession less than 3 months after the date of service.


Is there any help for homeowners?

 

Mortgage lenders offer payment holidays of up to three months where this is needed due to Coronavirus-related hardship. This also includes buy-to-let mortgages. However, the sum owed remains and mortgages continue to accrue interest during this period

 

Procedural delays

 

The social distancing measures put in place to combat the Covid-19 outbreak have also created procedural delays in all possession hearings. Practice Direction PD51Z of the Civil Procedure Rules suspended all possession proceedings under CPR Part 55 for 90 days from 27th March 2020. The suspension also applies to possession cases brought by mortgagees against homeowners, and to possession cases brought by landlords against leaseholders (forfeiture).

 

Conclusion

 

Whilst the CA2020 is good news for tenants, landlords should be mindful of it when drafting notices under 8 and section 21 HA1988: until 30 September 2020, they will not be able to start possession proceedings unless they have given three-months’ notice; at the expiry of the three-month notice landlords must seek a Court order for possession as normal. Likewise, landlords should be aware that paragraph 13 of schedule 29 to CA2020 allows the Government to amend the three -month notice period to six months, if that is deemed necessary, and that, amendments aside, Practice Direction PD51Z will result in significant delays at Court.


Article by Amani Mohammed (pupil) – Nothing in this article is intended to be legal advice. Readers may contact clerks@stourchambers.co.uk should they wish formal legal advice on their particular circumstances.

This set comes recommended for its members' expertise in children and matrimonial finance matters. The children cases range across both public and private law work, and include those concerning non-accidental injury, sexual abuse and fabricated illness. On the financial side, the set's barristers demonstrate the ability to act in substantial financial remedies cases as well as Schedule 1 and TOLATA matters.

~ Chambers UK Bar Guide 2020

Stour Chambers has 'a range of barristers at different levels suited for different cases'. Members continue to be instructed in complex multi-day cases in the public law space, where it provides 'expert counsel' across Kent and further afield involving non-accidental injury, sexual abuse and extreme neglect. On the family finance front, Elizabeth Spence is a go-to barrister for high-value cases with issues of minority shareholdings and opponents deploying hostile litigation tactics.

~ Legal 500 Bar Guide 2021

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