The coronavirus is affecting every part of our country, including the way we live, work and own property. On 25 March 2020 the Coronavirus Act 2020 (“Act”) passed through the House of Lords and became law without amendment. The Act includes restrictions that will have a drastic effect on the ability of residential landlords to recover possession of their property.
The Act affects how notices seeking possession are served on tenants and (in some cases) when landlords can commence possession proceedings. The Act is meant to prevent residential tenants from losing their homes as a result of the coronavirus.
The changes introduced by the Act only apply to the period from and including 26 March 2020 to and including the 30 September 2020 (“Relevant Period”).
In brief, notices served by landlords during the Relevant Period will only be valid if not less than 3 months’ notice is given. This is very significant, since landlords are normally only required to give tenants between two weeks’ and two months’ notice.
Service of notices under Section 8 of the Housing Act 1988 (“1988 Act”)
Under Section 8(1) of the 1988 Act the Court will not grant a landlord an order for possession of property let on an assured tenancy (“AT”) or assured shorthold tenancy (“AST”) unless they have first served a notice than complies with Section 8 of the 1988 Act (“Section 8 Notice”) or the Court considers it just and equitable to dispense with the giving of notice.
The two main ingredients of a valid Section 8 Notice are: (1) proving that one or more of the grounds of possession in Schedule 2 of the 1988 Act (e.g. Ground 8, which relates to non-payment of rent); and (2) giving the tenant the minimum period of notice prescribed by the 1988 Act. The amount of notice varies between less than a day and two months depending on which Ground is used.
- increases the required period of notice in all Section 8 Notices to not less than 3 months regardless of which Ground is being relied upon.
- makes minor modifications to Form 3, the prescribed form of Section 8 Notice, explaining the change in the notice periods.
Please note that if the AT or AST started on a periodic basis with reference to a period longer than 3 months then it is the case that more than 3 months’ notice may be required.
Service of notices under Section 21 of the 1988 Act
Under Section 21 of the 1988 Act the Court will allow a landlord to recover possession of their property if the landlord gives the tenant a notice in accordance with that section (“Section 21 Notice”). This involves giving the tenant not less than two months’ notice in writing, to expire no earlier than the last day of their fixed term tenancy (if there was one) or, if the tenancy was periodic to begin with, no earlier than six months after the commencement of the tenancy.
- increases the required minimum period of notice in all Section 21 Notices to not less than 3 months.
- makes minor modifications to Form 6A, the prescribed form of Section 21 notice, explaining the change in the notice periods.
Please note that if the AST started on a periodic basis with reference to a period longer than 3 months then it is the case that more than 3 months’ notice may be required.
Property let under other tenancies regulated by statute
The Act also covers a number of less common tenancies including protected and statutory tenancies under the Rent Act 1977 and secure tenancies under the Housing Act 1985. The overall effect of the Act on those tenancies is to require landlords seeking possession of their property from their tenants to give their tenants not less than 3 months’ written notice of their intention to do so.
The Government was planning to abolish ASTs and Section 21 Notices entirely and introduce new grounds for landlords to recover possession under using a Section 8 Notice (e.g. when they wished to sell the property) in its proposed Rented Homes Bill.
There is no reference to these changes in the Act. It seems that for the time being landlords will still be able to serve and rely on Section 21 Notices (subject to the new restrictions imposed by the Act).
The Secretary of State has the power to:
- extend the Relevant Period to a later date; and/or
- alter any of the three month notice periods referred to in the Act (including to those periods in Sections 8 and 21 of the 1988 Act) to change them to either six months or to any other specified period which is less than six months.
- The Act does not apply to notices served before the Relevant Period (i.e. served before 26 March 2020), and does not affect the Court’s general powers to make possession orders against residential tenants. This means that landlords:
- can issue Court proceedings on the basis of notices which were served before the Relevant Period;
- will be able to issue Court proceedings during the Relevant Period if they comply with the new requirements of the Act; and
- the Court may (and in some cases, must) still make possession orders against tenants during the Relevant Period.
- Although the Relevant Period is due to expire on 30 September 2020, the Secretary of State can extend it and the extended 3 month notice periods referred to above. Landlords should pay close attention to any further legislative changes to make sure that any notices they serve are not invalidated by new laws.
- We have already experienced several cases of Judges adjourning hearings for extended periods without notice in anticipation of the Act coming into force. Landlords should be aware that in the current climate Judges may adopt a more lenient approach towards tenants for those cases where landlords issue proceedings. Landlords may also experience adverse publicity for doing so.
- Tenants may try to raise novel defences (e.g. under the Human Rights Act 1998), particularly if the tenants are self-isolating to prevent the spread of coronavirus or receiving treatment for the virus/recovering from it.
- Landlords will need to especially careful that the notices they serve on their tenants are valid. They should seek expert advice if they are unsure how to interpret the Act (when it becomes law).
- This article was first published on CoStar on 25 March 2020. This version of the article has been slightly amended to reflect the fact that the Act has now become law.
- On 27 March 2020 the Court issued the new Practice Direction 51Z, in which it stayed all possession proceedings until 24 June 2020. This was not something that the Act provided for. The Government has indicated that it may extend this stay if needed to combat the effects of the coronavirus pandemic.