By Samuel Lane and Paul Henson, Real Estates Disputes Team at Irwin Mitchell
As many, if not all, residential landlords will be aware, the stay on possession proceedings in England and Wales comes to an end on 20 September 2020. Barring any last-minute extensions from the Government; what happens next?
The Master of the Rolls working group has published a practice note on how possession claims will work once the current stay is lifted. The document entitled “The Overall Arrangements for Possession Claims in England and Wales” runs to 15 pages but a summary of some of the main effects of the proposals are below. For the avoidance of doubt, we use the term Claimant/Landlord and Defendant/Tenant interchangeably.
- It is emphasised that no possession proceedings should be commenced or re-started without landlords and tenants having first sought to reach a compromise wherever possible. This theme runs throughout the document and should always be the case;
- An additional 200 Deputy District Judges are to be assembled to assist in order to deal with the backlog of cases. Hearings will be able to be heard in person if the courts have COVID-secure facilities, but parties can agree for them to be heard by telephone or video provided the court agrees;
- Existing claims issued prior to 3 August 2020 will not be listed, relisted or referred to a judge until a “Reactivation Notice” has been served confirming the party wishes to proceed. Template notices for claimants and defendants have now been issued and both require details to be provided of the effect that COVID-19 has had on the Defendant (and their dependents). If existing claims have directions that were made before 21 September 2020 then the party serving the Reactivation Notice must propose new dates for the directions and a new hearing date or state that no new directions are required and that an existing hearing date can be met;
- Certain claims will be prioritised if they meet the criteria(s), otherwise they will be dealt with as and when they were issued. An example of prioritisation includes arrears equal to at least 1 years’ rent (or 9 months’ rent where that amounts to more than 25% of a private landlord’s total annual income from any source). A further example would be cases with anti-social behaviour;
- The Claimant is required to set out its knowledge of the effect of Coronavirus on the Defendant(s) (and dependents) as well as providing a rent account for the last two years where the claim relates to rental arrears;
- Cases can be ‘COVID-19’ marked. This marking can be applied for by either party subject to certain information being provided, alternatively, the Court can mark the case of its own volition. This marking will assist the Court in determining the speed at which the claim should be issued. For example, where a Landlord is able to show particular hardship as a result of the pandemic then a hearing may be listed sooner, whereas if a Tenant is able to demonstrate particular hardship as a result of the pandemic then the hearing may be delayed;
- There is an introduction of a ‘Review Date’ into the possession process. This is designed to allow the parties to come to an amicable agreement. The Tenant will have the option to obtain legal advice from a duty advisor. If an agreement is reached, this can be approved by the Court. 14 days prior to the Review Date, the Claimant will be required to provide an electronic bundle which includes all required materials. The Claimant must also confirm that they are available on the Review Date, albeit they do not have to attend court and being available by telephone will be sufficient.
- There will be a pilot mediation scheme whereby the parties will be invited to participate in mediation within 7 days of the Review Date if both parties are prepared to undertake mediation and the duty advisor forms the opinion that the claim has a reasonable chance of settling at mediation but is too challenging to settle on the Review Date itself. Priority will be given to the ‘COVID-19’ marked claims. The mediation pilot will be publicly funded and may occur via phone, video link or in person;
- If the Review Date does not settle proceedings, a hearing will be listed for 28 days thereafter. Although it should be noted that the Court, where possible, will consider adjournment even where an application has not previously been made.
- No enforcement of possession orders will proceed where there are local lockdown measures in place to protect public health or over the Christmas period, other than in serious cases. Furthermore, parties should be aware that an application to instruct high court enforcement agents ‘may not be able to be treated as a high priority’.
Expert Opinion“The Covid-19 marking is sure to be contentious with both parties likely to be keen to have the claim marked in their favour. This step, along with the addition of the ‘Review Date’, appears to be creating further work for an already over-worked system. It is likely that some claims may take up to, if not in excess of, 18 months to resolve from the date a notice is issued to the date that possession is achieved, if bailiffs are required.
This belief arises from Section 21 Notices now requiring a six month notice period (as opposed to the usual 2 months pre pandemic) and this document from the working party which provides that an application to instruct high court enforcement agents ‘may not be able to be treated as a high priority’.
Overall, this document is tenant focussed which is understandable as the Government and judicial system are keen to avoid a homelessness crisis, but it is likely to cause severe delays in possession being obtained.
However, from a landlord perspective;
1) it appears likely that the stay on possession proceedings will finally be lifted after 20 September; and
2) compromise is to be encouraged between the parties to facilitate an amicable agreement without the Tenant being considered intentionally homeless.
This second point has always needed addressing and, in the long term, this will hopefully free up the Court timetable to ensure claims are dealt with more swiftly. We believe the Review Date and/or proposed mediation pilot can be a very positive step forwards for everyone involved.”
Samuel Lane - Solicitor