The impact of COVID-19 on residential tenancies
Residential tenants already benefit from quite favourable statutory protection. However, given the current circumstances with many tenants struggling more than ever with meeting their monthly rental commitments, COVID-19 has resulted in an unprecedented set of changes to better protect residential tenants in a time where Government and the court service has prioritised ensuring that tenants remain secure in their homes. Nevertheless, what has changed, and what are the practical considerations for landlords if faced with a non-payment of rent situation?
The Coronavirus Act 2020 was given Royal Assent on 25 March 2020 and came into force on 26 March 2020, providing some clarity on when and how a landlord can recover possession of their property.
The Coronavirus Act 2020 itself alters the period of notice required to be served for assured shorthold tenancies to three months. In general, all new notices seeking possession must be for a minimum period of three months. The notice period will be three months whatever the grounds or reasons for seeking possession are. However, the act does not invalidate notices served before the legislation came into force.Once the notice does expire, and if served correctly, there is no actual bar to issuing possession proceedings. However, the Master of the Rolls, with the Lord Chancellor’s agreement, has suspended all ongoing housing possession action. This means that neither cases currently in, or any about to begin, possession proceedings can progress to the stage where the landlord recovers possession. The suspension of housing possessions action will initially last for 90 days. But this can be extended, if required.
In essence, a landlord can continue to serve a notice and issue court proceedings for possession at court. However, the process to obtain a possession order from a court will be longer than usual. This may be frustrating for landlords but ultimately is designed to ensure that tenants can proceed to abide by any social distancing and self-isolation measures imposed by government. Landlords may need to consider potential mortgage payment holidays, which now extend to buy-to-let mortgages. Nevertheless, under a payment holiday, the money is still owed and interest continues to accrue, so if landlords can afford to pay something in terms of their mortgage commitments, they may want to consider other options with their lender or financial advisor that allow them to do this.
It is now more important than ever for landlords to understand their rights and obligations. As such, if you are faced with a difficult tenant, please do approach us for further advice.
If you have any queries on anything covered in this article, please contact us on 01633 603178 or email Adrienne.Brigden@rdplaw.co.uk.
Visit our Dispute Resolution page for more information on our services.