COVID-19 protection for tenants

Property litigation specialist Ben Jones, Senior Associate, Litigation & Disputes, at award-winning Dorset law firm Blanchards Bailey LLP has welcomed Government action to protect both private tenants and landlords during the Covid-19 emergency. New legislation means that UK residential tenants who miss rent payments due to the impact of the coronavirus pandemic are to be protected from eviction for at least three months. The emergency legislation will stop new evictions from social or private rented accommodation during the crisis, as well as halting new possession proceedings. Landlords will also be protected with the three-month mortgage payment holiday extended to buy to let mortgages by lenders. 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.” The Coronavirus Act 2020 means that until 30th September 2020 most landlords will not be able to start possession proceedings unless they have given their tenants three months’ notice. Landlords can choose to give more than this three months’ notice. Additionally, the Master of the Rolls, with agreement from the Lord Chancellor, has suspended housing possession cases in the courts – affecting new or existing claims for possession for a 90-day period from 27th March. Landlords have been strongly advised not to serve new notices seeking possession during this challenging time without a very good reason to do so. Landlords and tenants have also been urged to adopt a pragmatic, common sense approach to issues that may arise in the current circumstances and that properties are kept in good repair and free from hazards. Ben, who is based at Blanchard Bailey’s Blandford head office, said that tenants should continue to pay rent and abide by all other terms of their tenancy agreement to the best of their ability, with a strong government package of financial support available. Any tenant whose ability to pay will be affected should have an early conversation with their landlord as rent payments agreed in tenancy agreement remain legally due. However, actions can include reaching a temporary agreement not to seek possession action for a period of time and instead accept a lower level of rent, or agree a plan to pay off arrears at a later date. Any landlord who does choose to serve notice seeking possession for rent arrears or has done so already will find the notice period and any further action will be affected by legislation lengthening the notice period and/or the suspension of possession claims. The three-month mortgage holiday being offered by lenders in favour of landlords is clearly aimed to incentivise landlords to delay the commencement of proceedings for longer as it ameliorates any losses they might ordinarily suffer through non-payment of rent. The suspension of court action on housing possession cases during the coronavirus outbreak applies for 90 days to all housing possessions proceedings in the rented, leasehold and home ownership sectors. This action is in line with public health advice, which has advised against non-essential movement in response to coronavirus. What this actually means in the private or social rented sectors is that landlords will not be able to take court action against any tenant already served with notice of a landlord’s intention to seek possession of the property. It should be borne in mind though that the reference to ‘mortgage holidays’ means that mortgage arrears must ultimately be repaid to lenders and so landlords are unlikely therefore to overlook non-payment of rent by tenants in the long term; rent arrears will likely need to be repaid. Effectively, landlords and mortgage lenders will be encouraged and required to communicate and work together to agree a revised payment plan. Judges are already empowered to impose payment plans on parties to litigation. Ben added that a three-month notice period before possession proceedings and a three-month mortgage holiday would provide peace of mind to residential tenants and landlords alike. Tenants or landlords with questions or concerns relating to this issue can contact a member of the Blanchards Bailey team. Eighty-strong Blanchards Bailey is a Legal 500 firm – making it one of the top firms in the South West – and is based in Blandford with offices in Poundbury, Shaftesbury and Weymouth.