The Coronavirus Act 2020 was given Royal Assent overnight on 25 March 2020 and contains provisions to protect business tenants from forfeiture.
Coronavirus Act 2020
The Coronavirus Act 2020 (the “Act”) was given Royal Assent overnight on 25 March 2020 and contains over 300 pages of emergency legislation in relation to the impact of COVID-19. Section 81 and Schedule 29 of the Act deals with protection from eviction for residential tenants during the “relevant period”, being 26 March 2020 to 30 September 2020; although there is reserved power to extend the “relevant period” if required.
In short, during the “relevant period” landlords are required to give 3 months’ notice to all tenants who hold the following types of tenancies:
- Assured tenancies (S.8 Housing Act 1988 NOSPs);
- Assured shorthold tenancies (Section 21 notices);
- Secure tenancies (s.83 Housing Act 1985 NOSPs);
- Rent Act 1977 protected/statutory tenancies;
- Introductory tenancies;
- Demoted tenancies;
- Flexible tenancies.
The requirement to give 3 months’ notice will apply in all circumstances including (but not limited to) cases of anti-social behaviour (ASB) (on mandatory and discretionary grounds), rent arrears and Section 21 notices. Although, in very exceptional cases the Court may still be able to dispense with the statutory requirement of serving a notice. Landlords are best advised to consider whether it is appropriate to issue a notice during this period and be prepared to justify any such action.
It should be noted that the legislation makes provision for the 3 month notice period to be extended up to 6 months, if required. However, it remains to be seen whether in such circumstances notices already served with a 3 month notice period would continue to be valid.
The new notice provisions under the Act do not apply to agreements without security including, for example:
- Contractual tenancies;
- Tenancies granted in the course of employment.
Furthermore, landlords are not required to give 3 months’ notice to tenants who have lost their security of tenure (e.g. for failing to occupy the property as their only or principal home); Notices to Quit in these circumstances should be served with the usual notice periods.
Landlords should ensure that they continue to use the statutory prescribed forms when serving new notices from 26 March 2020.
The consequential modifications to the prescribed forms as set out in the Act can be found at paragraph 10 for secure tenancies and paragraphs 11 – 12 for assured tenancies of Schedule 29.
However, it should be clearly noted that the above ‘modifications’ to the prescribed forms are stated to “be read as” amendments and therefore do not change the relevant housing legislation.
Despite there being no statutory instrument changing the prescribed forms the Government website has been updated with a new Form 6A for Section 21 notices and new forms for secure and assured NOSPs.
It is our view that without a statutory instrument amending the prescribed forms landlords should not be using the new forms as currently set out on the Government website.
Instead, when serving new notices (on the statutory prescribed form) landlords are best advised to highlight to their tenants in the covering letter the changes to the notice periods as implemented by the Act.
All notices which have been validly served prior to 26 March 2020 can still be relied on.
The new PD51Z (as amended on 18 April 2020) confirms that all new possession proceedings can be issued by the County Court and will then be automatically stayed (put on hold) until 25 June 2020.
Please note that there is an exception for existing Rent Act 1977 notices. The new legislation does not allow new possession proceedings to be commenced during the “relevant period” (unless the Court considers it just and equitable to dispense with this requirement).
The Master of the Rolls and the Lord Chancellor signed Practice Direction 51Z which states that all possession proceedings brought under CPR 55 and all proceedings seeking to enforce an order for possession by a warrant or writ of possession are to be stayed from 27 March 2020 to 25 June 2020. PD51Z confirms that claims for injunctive relief are not subject to a stay of 90 days.
PD51Z was further amended on 18 April 2020 which clarifies that the stay in possession proceedings does not apply to claims against trespassers under CPR 55.6 (persons unknown) or the making of interim possession orders.
Furthermore, PD51ZA has also been introduced which provides some clarification regarding ongoing civil litigation and Court directions already in place. It is thought that PD51ZA does not apply to ongoing possession proceedings but states that parties are able to agree extensions of time on directions in other civil litigation up to a maximum of 56 days without reference to the Court provided that it does not affect any hearing date (as opposed to the usual 28 day rule under CPR 3.8). Any extension of time beyond 56 days will require the Court’s permission.
In relation to directions in ongoing possession proceedings, pursuant to PD51Z (as amended) parties are permitted to make applications to the Court for case management directions where such directions are agreed between the parties. The Court are permitted to consider such applications on the papers to avoid hearings in person and to ensure that possession proceedings are able to proceed effectively once the stay is lifted.
Practice Directions 51Z and 51ZA will cease to have effect on 30 October 2020.
Dealing with ASB cases
Social landlords are still entitled to apply for both without notice and on notice injunctions under Part 1 of the Anti-Social Behaviour Crime and Policing Act 2014. It is understood that the Court are seeking to list such injunction hearings via telephone and/or video conferencing where appropriate.
Furthermore, it is understood that the Court are treating breach hearings and committal proceedings as priority matters and arrangements are being made on a case by case basis for the safe hearing of such matters.
Landlords can also still work with other agencies including the Police to tackle ongoing ASB including applications for closure orders, community protection notices and public space protection orders.
Dealing with rent arrears
We are currently waiting for a new Pre-Action Protocol for Rent Arrears which should provide urgent guidance to landlords when dealing with rent arrears caused as a direct result of COVID-19.
In the meantime, landlords are encouraged to continue working with their tenants to make arrangements for re-payment of outstanding rent arrears and assist tenants with claims for benefits and other income support.
Landlords will still be expected to comply with their obligations under the Gas Safety (Installation and Use) Regulations 1998 including completing annual gas safety inspections. Of course, landlords should continue to act reasonably when attempting to gain access to its properties and keep good records of such reasonable attempts made.
Landlords should also ensure that they act in accordance with Government guidance regarding public health for the health and wellbeing of tenants and contractors alike.
If a landlord is unable to gain reasonable access to their property to complete the annual gas safety inspection an application to the County Court for an access injunction can still be applied for. Landlords do not have a contractual or statutory right to access their tenant’s gas meter and turn off their gas simply because the tenant has failed/refused to provide access for the annual gas safety inspection.
Any application to the Court by a landlord for access to complete a gas safety inspection should be dealt with in the normal way and the Court will give guidance on how each application will be dealt with on a case by case basis.
As above in relation to gas safety inspections, landlords are also expected to continue to comply with their obligations in relation to maintenance and repair of its properties and access injunctions can still be applied for.
Again, Government guidance in relation to public health should be followed to protect both tenants and contractors when completing works and good records should be kept of a landlord’s reasonable attempts to gain access to its properties.
In relation to ongoing disrepair claims, we understand that some surveyors are cancelling inspections for some weeks if not months. Therefore, if a landlord and tenant are currently in litigation for cases of disrepair, parties should attempt to agree a stay, extensions on directions and/or settlement where appropriate.
In such unprecedented circumstances it is likely to take some time for both landlords and tenants to adapt to the new “norm”. All legal proceedings will need to be dealt with on a case by case basis so please do not hesitate to contact us for further legal advice on individual matters.
Correct at time of re-publishing (21 April 2020)