COVID-19 has undeniably had a huge impact on the economy, across the board.
Despite the Government’s efforts to mitigate, amongst other things, a surge in unemployment, aggressive debt recovery and evictions through the implementation of the Coronavirus Bill 2020 (The “Bill”) not everyone has been safe from financial hardship.
In this article I address the impact the Bill has had on residential landlords and tenants.
What are the key issues currently for landlords and tenants
- Rent Arrears & Rent Recovery
These typically have been the focal point of most landlord and tenant discussions arising out of the coronavirus crisis.
‘No evictions for 3 months’.
One of the first legislative provisions to be publicly addressed by the Government.
What does this mean in practice?
It means that during the period 27 March 2020 to 30 September 2020 all landlords are required to give at least three months’ notice for an eviction date.
To be clear, landlords can still validly serve notices for possession. They just have to wait three months before they can issue proceedings.
Why is this significant?
Well the usual eviction notice periods are:
- Section 21 - no less than two months’ notice.
- Section 8 - used where there has been a beach. Notice period can be between two weeks and two months.
Now if a tenant were to be in at least two months’ rent arrears, a landlord would have the right to serve a Section 8 notice. The notice period for this situation would be 14 days.
However, in accordance with the Bill, all notices must be at least 90 days. This applies up to 30 September 2020.
What happens after 90 days?
After the 90 days has elapsed, if the tenant has not vacated the property, the landlord can apply for a possession order.
However, given the Government has also suspended existing possession order applications for 90 days, landlords need to prepare for a minimum of 6 months to obtain a possession order.
Rent Arrears & Rent Recovery
Cannot pay rent, is not a defence for not paying rent.
Irrespective of the financial hardship faced, a tenant remains liable for rent. No exceptions.
Now it has been recommended that landlords and tenants take a sensible approach to find an amicable solution. This could be in the form of rent deferments, reduced rent or a payment plan.
Whilst this is strongly encouraged, tenants should note that landlords are under no obligation to come to an agreement.
However, landlords should note that in the event they issue section 8 notices for non-payment of rent the courts may not be so willing to grant possession orders where it is determined this was directly related to COVID-19.
Caution is strongly advised on both sides.
Q: Can Landlords take action for rent recovery?
A: If the eviction procedure taken does not allow for a money order to be applied for OR if the tenant vacates the property by the eviction date and there are still outstanding arrears then the landlord has the legal right to pursue this debt.
Q: How can landlords recover rent?
A: It really depends on the individual circumstances.
Regardless of whether notices for possession have been served, there are two aspects here.
- One is possession. Actually, getting the property back. Not too difficult as long as you have followed the right procedure
- The other is, recovering rent that is owed. This can prove quite difficult.
Whilst rent recovery is time-consuming, potentially stressful and not always successful, there are a number of options to consider:
- Use the rent deposit- see if this covers enough of the arrears
- Obtain a CCJ – issue a claim for debt recovery and obtain an order for judgement. Of course if a person doesn’t pay after an order has been obtained the you might want to consider the below options.Statutory demand- can be issued where an individual owes you an undisputed debt of £5000 or more. If the tenant does not dispute the amount owed and does not pay, then you could obtain an order from the court
- Bankruptcy –you could consider threatening them with bankruptcy. This would affect their credit rating and may be enough to scare them to pay. On the other hand, if they really cannot pay, you need to consider the moral implications of bankruptcy. It is also an expensive route.
- Attachment to earnings – you could obtain this against a person’s earnings each month but this does not apply where someone is self-employed.
- Third party debt order- a debt owed to a tenant could be ordered to be paid to a landlord
- Charging Order- realistically this probably won’t apply unless you know your tenant has a property in their name
NB. COVID-19 restrictions on some of the above methods may apply.
Q: Are landlords still responsible for carrying out repairs?
A: Yes. COVID-19 has not suspended these obligations despite what some landlords think. However, it is recommended to limit this to essential repairs only and when visiting the property observe social distancing guidelines.
Tenants need to take a view for now on what is ‘essential’.
In all circumstances, landlords and tenants are encouraged to observe their existing obligations best they can and where necessary to agree a sensible solution where obligations cannot be met.
This article has been written by Jasmine Chaudry of Ashton Ross Law.
DISCLAIMER: This article is not intended to nor should it be regarded as providing legal advice. This is a general overview of the topic. The legal position will vary based on your personal circumstances. Where advice is required, please contact Ashton Ross Law directly.
Published on 7th May 2020
(Last updated 11th May 2020)