Possession of Residential Property – 25/3/2020

The “Coronavirus Bill” is currently making its way through Parliament and is expected to be enacted in the coming days.

One of the functions of this emergency legislation is to prevent the eviction of tenants from social and privately rented accommodation during the Covid-19 outbreak by suspending evictions and preventing residential landlords from issuing any new Court proceedings for the possession of property.

The legislation is drafted to allow landlords to serve section 8 or section 21 notices on tenants in the usual way (please see our guide to obtaining possession for more information) but with changes to the statutory notice periods before possession proceedings can be brought. The usual notice periods that must be allowed before bringing possession proceedings in relation to such notices vary from two weeks to two months, depending on the grounds upon which the landlord relies for recovering possession. However, these are to be extended to three months for any and all section 8 or section 21 notices that are served from the day after the law is passed until at least 30 September 2020, irrespective of the reason for the notice.

It is not clear at this stage how the government intends to achieve its stated aim to suspend all evictions for three months, as the draft legislation does not appear to directly affect the enforceability of those notices that have already been served. However, a number of impending possession hearings have already been proactively adjourned by the Court until at least late June 2020, despite the proposed legislation not yet being in force, on the basis that the government has made its intentions clear.

Rent will continue to accrue and become due pursuant to the terms of the lease (or pursuant to a statutory periodic tenancy if the lease term ends but the tenant does not vacate the property) if the tenants remain in occupation after the relevant notice has been served. After the property has been returned to the landlord, or after the emergency legislation ceases to apply, landlords and tenants will be expected to co-operate to establish an affordable repayment plan in relation to any overdue rent.

In order to alleviate the impact this is likely to have on landlords, a three-month “mortgage payment holiday” is expected to be extended to buy-to-let mortgages. It is not clear whether this will be written into law or if lenders will be given non-binding “guidance”.

Further detail regarding this rapidly changing area of law will be provided as it becomes available.

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