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The impact on landlords of the Coronavirus Act 2020

Posted 31/03/2020

David Sodimu, Landlord & Tenant Law specialist at Holmes & Hills Solicitors, discusses the Government announcements impacting landlords.

Following the rapid legal developments in the country to deal with Covid-19, the government has now introduced substantial, albeit temporary, changes to the private and social rented sector.

Changes in Notice Period

As of 26 March 2020, Landlords have been required to give tenants at least 3 months notice of their intention to seek possession. This applies to section 21 and section 8 notices under the Housing Act 1988 and also applies to protected tenancies. The provisions which provide for this, and the further guidance set out below, are set out in Schedule 29 of the Coronavirus Act 2020.

After the three months notice period, Landlords will be entitled to seek possession by way of issuing possession proceedings. The three month notice period rule will remain in force until 30 September 2020 and may be extended beyond this date. That is to say, if you serve notice on 29 September 2020, the expiry of the notice must be at least 3 months from that date. However, if notice is served on 1 October 2020, subject to the statutory provision not being extended, you may provide less than 3 months notice which must align with the relevant rental period.

Ongoing Possession Cases

As from 27 March 2020 the Court service will suspend all ongoing housing possession actions, neither cases currently in the system or any about to go in to it can progress to the stage where someone could be evicted.

This suspension will initially last for 90 days, but may be extended if needed. This suspension will also apply to mortgage repossession claims and those with licenses covered by the Protection from Eviction Act 1977.

Do Tenants Still Have To Pay Rent?

Yes- support is available for tenants to make rental payments if they are affected by Covid-19 and landlords are being encouraged to work with tenants to find workable solutions, however, tenants will remain liable to pay rent.

What About Repairing Obligations?

Landlords remain obligated to ensure properties meet the required standard of repair. Urgent, essential health and safety repairs should be made where possible.

With regard to non-urgent repairs an agreement should be reached between the landlord and tenant for these to be carried out at a later date. The government has encouraged local authorities to take a pragmatic, risk-based approach to enforcement in respect of Improvement Notices.

Other Changes

The government are working to strengthen the pre-action protocol requirement for landlords. This will help landlords and tenants to agree reasonable repayment plans where rent arrears may have arisen.

The government have made £500 million available to fund households experiencing financial hardship.

The government will pay up to 80% of a worker’s wages, up to a total of £2,500 per month, where workers are placed on the Coronavirus Job Retention Scheme.

Both Universal Credit and Housing Benefit will increase and from April 2020 with Local Housing Allowance set to pay for at least 30% of market rents in each area.

It is hoped the above provides for responsible tenants continuing to pay rent to their landlords.

Finally, the government has also introduced a 3 month mortgage payment holiday for landlords where they have a Buy to Let mortgage. Landlords should contact their mortgage provider if they are interested in taking advantage of this.

Any Possible Solutions?

Whilst it may appear that the government is set on making life difficult for landlords, as is the popular view (amongst landlords), it is important to keep in mind that this is not a time to sit back and wallow but to take action where possible. Here are some tips on what can be done?

  1. Where a landlord seeks to regain possession, they should serve the relevant notice as soon as possible to avoid any delay or prohibition in the ability to issue Court proceedings once the suspension on evictions comes to an end.
  2. Landlords should engage in pre-action correspondence with tenants at the earliest possible opportunity to seek a resolution outside of court proceedings in the first instance.
  3. Where tenants fail or refuse to pay rent and do not reasonably engage in agreeing alternative solutions regarding rent payment, landlords should consider issuing money claims in the interim period to enforce pressure only where necessary – of course consideration should be given to whether such sums are realistically recoverable from the tenant.
  4. Landlords should make arrangements to ensure that urgent repairs are undertaken and if such works cannot be undertaken, communicate with both the tenant and the local authority to agree what steps can/should be taken in the meantime to deal with any disrepair.

Expert legal advice for landlords

We appreciate that the minefield that is Landlord and Tenant Law has quickly become more complicated. If you have any landlord and tenant related queries, contact David Sodimu, Landlord and Tenant Law specialist, for expert guidance and assistance through this period of uncertainty. Call 01376 320456 (Essex) or 10787 275275 (Suffolk).


David Sodimu

Posted 31/03/2020 by:
David Sodimu
Solicitor



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