Boris Johnson’s latest announcement in the war against the Coronavirus is that the Conservative government will seek to bring forward legislation designed to protect private renters from no fault evictions. Speaking at his daily coronavirus briefing the Prime Minister said: “It would not be right for people to be penalised as a direct result of following government advice.”
A number of landlord clients are receiving requests from their tenants for rents to be deferred, particularly in the hospitality/restaurant/bar sector. Landlords appreciate the difficulty that their tenants are facing in the current climate and want to assist their tenants wherever possible. We are working with our landlord clients to advise on how best to document any rent concessions, whilst seeking to mitigate any further impact.
“No fault” evictions are currently addressed under Section 21 of the Housing Act 1988. This legislation is designed so that, at the end of an assured short hold tenancy, a landlord may serve on their tenant a Section 21 notice giving their tenant two months’ notice to vacate the property, without having to prove the tenant is in breach of the tenancy agreement.
If this legislation were to be repealed, it would mean that in order to take back possession of their property, a landlord would need to prove one of the 17 grounds listed in Schedule II of the Housing Act 1988. For example, the landlord will need to demonstrate that the tenant is in at least two months’ rent arrears, the tenant is an illegal immigrant or the landlord intends to demolish the property in mortgage arrears (this is not an exhaustive list, however, this can be found here. Some of the grounds are mandatory, meaning that the court must grant an order for possession if the landlord can demonstrate the ground. Other grounds are discretionary, meaning if the landlord can demonstrate the ground the court may grant an order for possession if it considers it reasonable to do so. Proving a ground for possession can be an extremely difficult task and if a landlord cannot satisfy a ground for possession, they will not be able to take back possession of their own property.
Housing Secretary Robert Jenrick MP said: “The government is clear – no renter who has lost income due to coronavirus will be forced out of their home, nor will any landlord face unmanageable debts. These are extraordinary times and renters and landlords alike 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”.
An additional complication is that following the outbreak of the coronavirus, the Courts are prioritising cases and are understandably reluctant to list hearings unnecessarily. Given the Housing Secretary’s recommendation, it is extremely unlikely that the Courts will be listing possession hearings. There are an estimated 11 million people renting housing in the UK, amounting to one in five households. Most of those landlords will be feeling extremely nervous that they will be unable to take back possession of their properties during this time, even if they are not receiving rent from their tenant and are unable to pay their mortgage as a consequence.
Landlords who are concerned about their tenants ability to pay, or who are currently in the possession process (whether they have simply served notice or have issued court proceedings) are urged to get in touch with one of our Property Litigation specialists who can advise on appropriate strategy going forward depending on the facts of their case.