Comment from Samuel Lane and George Cohen Solicitors, Irwin Mitchell
Practice Direction 55C was published in early August 2020, to come into force on 23 August 2020 setting out procedures for new claims by landlords against tenants issued on or after 3 August 2020. It also set out how to “reactivate” stayed claims (those issued before 3 August 2020) when the stay of possession proceedings ended on 23 August 2020.
Following an eleventh-hour u-turn, the end of the stay was extended until 19 September 2020. This means that stayed claims issued before 3 August 2020 cannot be reactivated before 20 September 2020. Other than the extension of the stay, the Practice Direction was unamended.
On Friday 28 August 2020, the Coronavirus Act 2020 (Residential Tenancies: Protection from Eviction) (Amendment) (England) Regulations 2020 also came into force. This applies to various notices seeking possession of residential properties.
The majority of landlords will be most concerned with Housing Act 1988 notices served under section 21, to end a tenancy on or after the end of the fixed term (unless a break clause is exercised); and section 8, for the non-payment of rent (grounds 8, 10 and 11).
The full extent of the regulations can be found here, but the most important changes are as follows.
- Section 21 has been amended so that landlords now have to provide six months’ notice. This is an extension from the 3 months required by the Coronavirus Act 2020 and the usual 2 months prior to COVID-19.
- As a result of this, the period in which a landlord serving a section 21 notice must bring a possession claim has been extended from 6 months to 10 months. Landlords will still therefore have 4 months after the expiry of the notice to issue a possession claim in reliance of the notice.
Section 8 (grounds 8, 10 and 11):
- Where the tenant’s arrears are less than 6 months, 6 months’ notice must be provided.
- Where the tenant’s arrears are 6 months or more, 4 weeks’ notice must be provided.
These requirements apply to notices “given” from 29 August 2020 to and including 31 March 2021. Arguably, therefore, notices providing 3 months’ notice that were posted before 29 August 2020 but which reach the tenant on or after that date will be invalid.
New prescribed forms for section 21 and section 8 notices can be found here.
Whilst we are led to believe that the stay on residential possession proceedings will be lifted on 20 September 2020, it is by no means guaranteed. Consequently, it is more important than ever for landlords to think carefully about how they approach matters from both a tactical and commercial standpoint.
The new legislation is a positive step for the residential landlord and tenant market. Many landlords had begun to feel forgotten about, whilst also suffering as a result of COVID-19. The legislation feels more evenly balanced as it provides tenants with extended notice periods, whilst allowing landlords to recover possession of a property sooner where the arrears are over half a year in total. It should not be forgotten that most landlords also have ongoing liabilities for which they are reliant upon their rental income.
From a practical point of view, if the arrears are less than the six month threshold, landlords should consider initially serving a section 21 notice to protect their position. If the tenant reaches six months of arrears during the section 21 notice period, the landlord can then serve a section 8 notice without prejudice to the effect of the section 21 notice.
As always, and particularly in the current climate, landlords should consider negotiating with tenants to reach a resolution without the need for court proceedings.
This article was first published in CoStar on 2 September.