The Government has announced its plans for emergency legislation protecting tenants from eviction during the coronavirus outbreak.
Under this legislation, landlords of both social and private accommodation will not be able to start possession proceedings for three months - the idea being to prevent tenants losing their homes during the outbreak.
Landlords could therefore be faced with substantial arrears of rent, but unable to recover possession of their properties and re-let. Some comfort is offered by the Government’s previous announcement that a three month mortgage payment holiday will be extended to buy-to-let mortgages for landlords whose tenants are experiencing financial difficulties due to the virus. However those landlords who rely on rental income could face severe financial difficulties.
After the three month stay, there is an expectation that the landlord and tenant will try and agree a repayment plan for the arrears that have accrued. Only time will tell as to whether any arrears will ever be recouped.
There is a current pre-action protocol on possession proceedings applying to mortgage repossessions; the Government intends to widen this protocol to include private renters. Under the protocol lenders must provide their borrowers with certain information and encourage engagement, consider reasonable requests from their borrower to an instalment plan, and are prevented from issuing possession proceedings if certain steps are taken by its borrower, such as marketing the property. Possession proceedings should not be started unless all other reasonable attempts to resolve the situation have failed.
The Government is encouraging all landlords to show compassion and use possession proceedings only as a last resort.
Housing Secretary Robert Jenrick MP said: “These are extraordinary times and renters and landlords 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”.
As far as we are aware, such legislation will apply only to new evictions, and not those where possession proceedings have already started. We could see a rush by landlords to now issue possession proceedings before the legalisation comes in to effect. However, the County Courts are severely under-resourced with significant delays already in claims being issued, and any claim for possession sent to a County Court now may not be issued in time. That could raise serious questions for those proceedings which must be issued within a legal timeframe.
Landlords need to consider carefully whether the cost of serving eviction notices on their tenants now, or rushing to start proceedings, will be wasted.
We can only hope the new legislation is well drafted, so that its remit is clear. However that may be too much to ask when speed is the priority.