Update on possession claims and what to expect in 2021
In response to the unprecedented upheaval caused by the coronavirus pandemic, 2020 saw a raft of new legislation, regulations and guidance aimed at protecting tenants during the health emergency. The new rules resulted in significant modifications to the usual procedures for regaining possession of residential property, many of which are still in force now. So where do things stand almost a year on from the first national lockdown? With many of the temporary measures expiring or due to expire in the next few months, this blogpost explores where we are now and what we can expect to see during the course of 2021.
Extension of Practice Direction 55C
Last Friday, 29 January 2021, Practice Direction 55C was amended to extend the period of its application from 28 March 2021 to 30 July 2021. PD 55C is the practice direction introduced last August that provides for a temporary modification of possession procedure under Part 55 of the Civil Procedure Rules. Its purpose was to assist the Court manage the influx of possession claims following the end of stay on possession claims in September 2020. The new PD introduced the ‘reactivation notice’ for claims that had been brought before 3 August 2020 and required claimants to provide the Court with information about the impact of the pandemic on the Defendant and his or her dependents. My colleague Nikki Basin wrote about the new PD 55C when it was introduced here.
The deadline for filing reactivation notices was 29 January 2021, however, this has now been extended to 30 April 2021. In the same way as before, the rules state that if no reactivation notice has been filed and served by this date the claim will be automatically stayed. Presumably a party wishing to lift the stay after this date will need to file an N244 application making this request. The rules expressly state that a stay is not a sanction for breach and an application to lift the stay is accordingly not an application for relief from sanctions. It remains to be seen how the Courts will approach applications for stays to be lifted after the reactivation notice deadline ends. As the rules state that an application to lift the stay is not an application for relief from sanctions one would expect the Denton criteria not to apply. However, parties making applications several months after the end of the period for filing reactivation notices should expect to have to provide an explanation for the delay.
The current modified notice periods for section 21 notices and section 8 notices remain in force until 31 March 2021. The minimum notice period for a section 21 notice is currently 6 months. The notice period for most section 8 notices is also six months but there are number of exceptions so the rules need to be checked carefully. For example, for notices served on the basis of the rent arrears grounds: Grounds 8, 10 and 11, the notice period is 4 weeks if the tenant is in at least 6 months’ rent arrears. My colleague Robin Stewart wrote about the new notice periods here.
These extended notice periods are due to come to an end at the end of March. However, it seems likely that there will be further legislation extending notice periods for an additional temporary period.
Breathing Space Moratorium
Another development on the horizon is the introduction of The Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020. These are new regulations due to come into force on 4 May 2021 designed to give those in debt some protection from creditors. These regulations are not specifically aimed at tenants but they will apply to landlords trying to recover rent arrears and also possession on the basis of rent arrears.
The regulations create two types of breathing space:
- A standard breathing space and
- A mental health crisis breathing space
The Government guidance defines the two breathing spaces as follows:
“A standard breathing space is available to anyone with problem debt. It gives them legal protections from creditor action for up to 60 days. The protections include pausing most enforcement action and contact from creditors and freezing most interest and charges on their debts.
A mental health crisis breathing space is only available to someone who is receiving mental health crisis treatment and it has some stronger protections. It lasts as long as the person’s mental health crisis treatment, plus 30 days (no matter how long the crisis treatment lasts.”
Breathing spaces can only be started by an FCA authorised debt advice provider or a local authority. The debt adviser will consider whether a breathing space is suitable for the debtor taking into account their individual circumstances. For people accessing mental health crisis treatment, evidence from an Approval Mental Health Professional can be used to start a mental health crisis breathing space. If a breathing space is started, the debtor’s details will be put on a breathing space register and the creditor will receive a notification. At that point the creditor must stop any enforcement action against the debtor, stop contacting the debtor to request payment of the debt and stop charging and interest. This means landlords will not be able to serve any notices seeking possession relying on rent arrears due up to the start of the breathing space or proceed with obtaining a possession order. Landlords must inform their agents so they can also stop recovery action in relation to the debt and where Court proceedings are already underway, the landlord would need to inform the Court of the breathing space.
Creditors are expected to keep paying ongoing liabilities during the breathing space so tenants would be expected to continue to pay rent, just not arrears accrued up to the start of the breathing space. If they do not pay their rent, the debt adviser can cancel a standard breathing space. If the debt adviser does not cancel the breathing space and the landlord disagrees, the landlord can apply to the Court requesting that the breathing space is cancelled. Debt advisers must carry out a midway review during the standard breathing space to check whether the debtor is complying with his or her obligations. There are greater restrictions on cancelling a mental health crisis breathing space but the debt adviser will have to regularly check that the debtor is still undergoing the relevant treatment.
The breathing space will not stop all enforcement action against tenants and landlords will still be able to seek possession on the basis of section 21 notices or section 8 notices citing non-rent arrears grounds where they fulfil the necessary criteria.
The ban on enforcing possession orders is still in place and is currently due to end on 21 February 2021. My colleague Tamanna has written about the ban here and the exemptions that apply. Landlords are able to proceed with evictions if they can show ‘substantial rent arrears’ which now means 6 months’ unpaid rent. Landlords whose cases do not fall within one of the exemptions can still submit requests for warrants and writs of possession but these will not be actioned until after the ban comes to an end. Again, we will have to see whether there will be an extension of the eviction ban past the 21 February. This is likely to depend on the Government’s position on lifting the current national lockdown.
Renters’ Reform Bill
And finally, what about the Renter’ Reform Bill, the new legislation which will abolish the section s.21 procedure and reform private renting in England? The Government has been keen to demonstrate its commitment to the bill, however, it seems likely that this will not appear until the end of year at the earliest and not until the current turmoil of the pandemic begins to settle.
For now, it seems the private rented sector will continue to see further changes (frequently introduced at the last minute!) to the rules governing possession procedure and evictions as the Government continues to respond to an evolving situation.
*Disclaimer: The information on the Anthony Gold website is for general information only and reflects the position at the date of publication. It does not constitute legal advice and should not be treated as such. It is provided without any representations or warranties, express or implied.*