Coronavirus Act 2020: Residential Lettings
March 31, 2020
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The Coronavirus Act came into force on 26 March 2020 and will have an impact on the following parties:
- Landlords wishing to forfeit or end a residential lease
- Parties wish to issue possession proceedings
- Parties part way through the possession proceedings process
- Parties holding unexecuted Possession Orders
The Government have now issued full guidance on the new measures that have been introduced and a full copy can be found here: https://www.gov.uk/government/publications/covid-19-and-renting-guidance-for-landlords-tenants-and-local-authorities. Answers to the key questions being asked by residential landlords are found below:
Should tenants stop paying rent?
Tenants remain liable for rent and should continue to make payments to the best of their ability. They should ensure that they are claiming all they are entitled to from the government’s package of financial support. Where tenants are unable to make payment of their rent, the onus is on them to talk to their landlord at the earliest opportunity.
Some tenants appear to be acting under the misapprehension that a 3 month rent holiday has been granted by the Government. This is not the case and it is recommended that Landlords reach out to their tenants to confirm rent remains payable but open the channel of communication for tenants to speak to them if they feel unable to meet their obligations.
Tenants need to be clear that the requirement to pay rent remains in place and, where possible they should be making such payments. Otherwise, at the end of September they may be facing significant arrears and find themselves being evicted from the property, unless they have made arrangements with their landlord for an amended repayment schedule.
What can be done about rent arrears?
Tenants remain liable for all payments under their lease. None of the measures brought in by the Government change that liability or put any obligation on landlords to waive any payments due. The Government have asked landlord to offer support and understanding to tenants who may see their income fluctuate over this period.
Where tenants are in trouble landlords are encouraged to agree that they might put off enforcement action and allow a lower level of rent to be paid in the short term, with a plan to pay off arrears put in place for the future. Landlords may also be struggling, so the expectation is to be reasonable and pragmatic.
Where a landlord decides to serve a notice of possession for rent arrears or has done so already, the timescales for these processes have been extended. This is detailed below. Landlords remain able to issue debt claims for rent arrears. However, this action is likely to be frowned upon if the arrears relate to difficulties caused by Covid-19 and the timescales for payment in any orders given are likely to reflect this.
Local authorities are now able to offer some support to help people stay in their homes. Tenants experiencing financial hardship may be able to access new funding through their local authority. The Government has allocated £500m for this purpose. There are also packages available for those who are employed, or self-employed and tenants are expected to have taken full advantage of these schemes to ensure they can keep making rent payments, where possible. These initiatives may take some time to pay out, which is why landlords are being asked to be flexible, where possible, on the timing of payments.
How much notice is needed to forfeit a lease?
All landlords who do issue notices seeking possession will not be able to progress any further before the expiry of the notice. All notices for both the private and social rented sector tenancies must allow a full 3 months. These requirements are currently in place until 30 September 2020.
Regardless of the legislation, where tenants have difficulty paying rent up to 30 September 2020, the Government has asked that landlords do not issue a notice seeking possession, particularly if the tenant may be sick or facing other hardship due to COVID-19.
What protections are there under the Coronavirus Act 2020 for tenants?
The Coronavirus Act came into force on 26 March 2020. Landlords must now give 3 months’ notice in respect of both s8 and s21 Notices. Landlord can choose to give a longer notice period, to 30 September 2020 perhaps, if they wish to do so. From 27 March 2020, any claims in the system or about to go into the system will be affected by a 90 day suspension of possession hearings and orders.
If a possession order has already been granted, then the tenant can apply to stay the warrant the enforce that order. These applications will be treated as a priority by the Court and it is likely that stays will be grated until 1 October 2020. To save unnecessary expense, property owners holding an unexecuted claim may wish to write to the occupier confirming that they will not enforce the order until 1 October 2020, but that they reserve their position in relation to seeking damages for the ongoing unauthorised use and occupation of the property.
Where proceedings have been issued or are about to be issued, the Government strongly advises landlords not to commence or continue eviction proceedings during this challenging time without a very good reason to do so. As of 27 March 2020 proceedings will all be suspended for the next 90 days.
What can I do about mortgage repayments?
Mortgage lenders have agreed to offer payment holidays of up to three months where this is needed due to Coronavirus-related hardship, including for buy-to-let mortgages. The sum owed remains and mortgages continue to accrue interest during this period. This means that landlords still need to make those payments, with interest, at a later date. So they are not benefitting from any savings that can be passed on to tenants. It is simply a payment delay and it is hoped this will encourage landlords to feel they can offer payment delay to tenants.
Extending the current ‘pre-action protocol’ on possession proceedings to private landlords
The Government is working to widen the existing ‘pre-action protocol’ on possession proceedings, with provisions that will apply to Social Landlords, to include private renters and to strengthen its remit.
The revised protocol will require private sector landlords reach out to tenants to understand the financial position they are in before taking possession action through the courts once the 3-month delay on issuing eviction proceedings has ended. Ideally there should be a dialogue before the notice is issued and during the 3 month period if possible.
Does the Coronavirus Act cover licences to occupy?
This legislation only applies to tenants so will not apply to licences to occupy, such as those used for lodgers. However, the Government are asking the landlords of such licences to occupy to follow the same guidance and to work with renters who may be facing hardship as a result of the response to COVID-19.
Accommodation linked to Employment
If an employee is required to live-in to be able to do the job, or the occupation of the accommodation is necessary for the performance of their duties, and their contract clearly states this, they are classed as a “service occupier”. This will include some teachers in boarding schools, caretakers, carers and hotel staff, for example. As you do not have a tenancy in this situation you are not covered by this emergency legislation.
If you are not a tenant and your employer wants to end your employment because you are no longer required (rather than due to misconduct) they should tell you at least one week in advance. Check your employment contract as it may set out how much notice you should have. An employer will still need to apply to the Court for an order to remove an ex-employee and will be subject to the same delays. The Government has again asked that employers are as flexible as possible with those finding themselves in this situation.
Does a landlord still need a Court Order to require a tenant to leave?
A Court Order is still needed and will be delayed. The Government is asking landlords not to issue new notices seeking possession, and the suspension of housing possession claims from 27 March 2020 means that existing notices seeking possession cannot progress at present. The Protection from Eviction Act 1977 provides that a tenant cannot be forced to leave their home without a court order and warrant for execution of that order. The 1977 Act also protects some people who occupy their home under a licence. Breaches of the 1977 Act can give rise to a civil action and be a criminal offence.
Suspension of Possession Proceedings
The suspension set out in the Coronavirus Act will apply for 90 days from 27 March 2020, to all housing possessions proceedings in the rented, leasehold and home ownership sectors. This applies to all parties who would have protection from eviction under the 1977 Act. The 90 days limit is also left subject to review, so may be extended.
This does not apply to proceedings against trespassers. However, the are other delays being caused in the speed at which the Court can process claims as a result of Covid-19 and Judges will still be unable to make any order that would put public health at risk, so there may be a similar delay in obtaining possession orders against trespassers as well.
The suspension of housing possession cases will also apply to possession cases brought by mortgagees against homeowners, and to possession cases brought by landlords against leaseholders (forfeiture).
The practical implications of this suspension are:
- landlords will not be able to progress any claims where they have already issued a notice seeking possession for at least 90 days.
- Any possession proceedings to which this applies will be automatically suspended for at least 90 days.
- Any new notices must specify a notice period of three months. At the expiry of the notice, a landlord who wanted to take the next steps in progressing the possession claim would have to apply to the courts for a possession hearing, a process that ordinarily takes 6-8 weeks, and may take much longer under the current circumstances.
The legislation covering notice periods is in force until 30 September 2020 and is subject to review and may be extended by secondary legislation.
The suspension of housing possession cases is by a Practice Direction under the Civil Procedure Rules. The practice direction will suspend possession proceedings under Part 55 of the Procedure Rules for 90 days from 27 March 2020, and is also subject to review and possible extension.
Landlord’s Obligations to Repair
Landlords’ repair obligations have not changed. Tenants have a right to a decent, warm and safe place to live. It remains in the best interests of both tenants and landlords to ensure that properties are kept in good repair and free from hazards.
It is appreciated that routine maintenance may be delayed but dangerous conditions should be addressed as a matter of urgency.
Where reasonable, safe and in line with other Government guidance, it is recommend that tenants allow local authorities, landlords or contractors access to their property in order to inspect or remedy urgent health and safety issues.
Urgent health and safety issues are classified as those which will affect a tenant’s ability to live safely and maintain their mental and physical health in their home. This could include, but is not limited to:
- leaks or roofing issues
- broken boilers
- plumbing issues that restrict washing or toilet facilities
- broken white goods (provided by landlord) preventing clothes being washed or food being safely stored
- security issues such as a broken door or window
- installation or repair of equipment for disabled tenants
You can find further guidance on visits to properties to make repairs here https://www.gov.uk/government/publications/further-businesses-and-premises-to-close/further-businesses-and-premises-to-close-guidance#work-carried-out-in-peoples-homes
How can the risk of catching the virus be managed during visits?
Parties should take reasonable and sensible precautions as provided for in Government guidance. Where an urgent repair is required tenants may be required to remain in a separate room to the contractor and all parties are advised to follow Government advice on hygiene and cleanliness before, during and after visits.
Tenants do not need to have direct contact with anyone visiting your property to carry out repairs.
Access to the property to conduct viewings for sale or letting
Landlords should follow the Government’s latest guidance and it is recommended that property access should only be requested for serious and urgent repair issues.
Home buyers and renters are advised, as far as possible, to delay moving to a new home while emergency measures are in place to fight coronavirus.
You can find specific Government advice on moving here https://www.gov.uk/guidance/government-advice-on-home-moving-during-the-coronavirus-covid-19-outbreak
If someone in a House in Multiple Occupation (HMO) has the virus, are landlords obliged to remove them or find the other tenants alternative accommodation?
Nobody can be removed from their home because of the virus. Landlords are not obliged to provide alternative accommodation for tenants if others in the property contract the virus. Tenants are advised to follow the guidance.
Landlord’s obligations to provide regular gas and electrical safety inspections
Landlords must provide tenants with all necessary gas and electrical safety and any other relevant certification at the beginning of a tenancy (and carry out all scheduled inspections and tests where required). Where inspections have already been carried out, documents can be provided by post or in some circumstances it may be possible to provide digital copies.
Landlords should make every effort to abide by existing gas safety regulations and electrical safety regulations:
Electrical and gas safety in privately rented properties
The new Electrical Safety Standards in the Private Rented Sector Regulations 2020 were made on 18 March and will apply to all new tenancies on 1 July 2020 and for existing tenancies on 1 April 2021.
The Electrical Safety Regulations will require landlords to:
• Have the electrical installations in their properties inspected and tested by a person who is qualified and competent, at least every five years;
• Provide a copy of the report (known as the Electrical Safety Condition Report or EICR) to their tenants, and to the local authority if requested.
• If the EICR requires investigative or remedial works, landlords will have to carry this out.
The Gas Safety (Installation and Use) Regulations 1998 require landlords to have annual gas safety check on each appliance and flue carried out by engineer registered with the Gas Safe Register and to keep a record of each safety check. Further advice can be found on the Gas Safe Register’s website at https://www.gassaferegister.co.uk/help-and-advice/covid-19-advice-and-guidance/.
Both regulations are clear on the issue of compliance. If a landlord can show they have taken all reasonable steps to comply with their duty under the regulations, they are not in breach of the duty. With regards to the Electrical Safety Regulations a landlord would not be in breach of the duty to comply with a remedial notice and with regards to the Gas Safety Regulations a landlord would not be liable for an offence.
If landlords are not able to gain access to the property due to restrictions in place to tackle COVID-19, or are not able to engage a contractor to carry out the necessary work, we recommend landlords document your attempts to do so and all correspondence with their tenants or contractors, to demonstrate that reasonable efforts have been made.
The Government are encouraging local authorities and other enforcement agencies to take a pragmatic, common-sense approach to enforcement in these unprecedented times. The latest guidance can be found here: https://www.gassaferegister.co.uk/help-and-advice/covid-19-advice-and-guidance/