- April 5, 2020
- By Sarah Cummins
- 0 comments
What does the COVID-19 Act mean for private sector landlords?
In response to the Coronavirus outbreak, the Government announced a “radical package of measures to protect renters and landlords affected by coronavirus. As a result, no renter in either social or private accommodation will be forced out of their home during this difficult time.” The Government’s emergency legislation, the Coronavirus Act 2020 (“the Act”), is now in force and makes changes to the procedure for serving notices seeking possession. The Government has also published guidance for landlords, tenants and local authorities explaining their rights and responsibilities during these unprecedented times.
What does the Coronavirus Act do?
The Act modifies existing housing legislation by increasing the notice period for notices seeking possession and notices to quit to a minimum of three months. In the private rented sector the Act covers regulated tenancies, fully assured tenancies and assured shorthold tenancies. The Act does not apply to common law tenancies or licences to occupy.
The provisions apply in both England and Wales. Although housing legislation is devolved to the Welsh Assembly, Wales has agreed to the emergency legislation.
All notices served in respect of these tenancies must now have a notice period of at least 3 months. This includes section 21 notices and section 8 notices. The provisions came into force on 26 March 2020 and continue until 30 September 2020. To retain flexibility as the pandemic evolves, the legislation gives the Secretary of State and Welsh Ministers the power to increase the notice period up to a maximum of 6 months and to extend the end date of the legislation.
This means that landlords serving notices seeking possession will now have to give all tenants a minimum of 3 months’ notice. This applies equally to section 21 notices, which usually require at least 2 months’ notice, and section 8 notices regardless of the possession ground relied upon. Landlords seeking to recover possession for rent arrears will no longer be able to rely on the shorter notice period that usually applies to section 8 notices.
Have the prescribed forms for serving notices changed?
The Government has now issued new prescribed forms incorporating the modifications made by the Act and making it clear that tenants must be given at least 3 months’ notice. This includes a new Form 6a for section 21 notices served in England and new Form 3 for section 8 notices. The Government has published separate Technical Guidance on Eviction Notices to explain the new requirements.
At present there is no new ‘How to Rent’ booklet but this may also be updated in the coming weeks to include up-to-date information for tenants on their rights. Landlords and agents should therefore continue to check that they are giving tenants the correct version.
What about notices that have already been served?
The Act does not apply retrospectively to notices served before 26 March 2020. Therefore, these notices are still valid and it seems landlords can still start possession claims at Court relying on these notices. However, the Government’s guidance clearly states that landlords are advised not to commence or continue possession proceedings during this challenging time without a very good reason to do so. Furthermore, the Courts have now announced a 90-day stay on possession proceedings and enforcement of possession orders. This applies to both new and existing claims and therefore, as things currently stand, no new possession orders will be granted until late June or early July at the very earliest, but this could be much later. This stay on possession claims provides protection to other occupiers such as licensees and common law tenants who are not covered by the Act.
Do tenants have to continue to pay rent?
Yes, tenants are still required to pay rent. The Act does not provide tenants with a rent suspension and there is no equivalent to the mortgage ‘payment holidays’ that banks are providing to property owners. Rent therefore continues to be due although the Government’s guidance encourages landlords to offer support to tenants who may see their income fluctuate during this time. Many landlords are already considering how to assist their tenants through this crisis including agreeing rent reductions and payment plans for arrears. The Government has also announced that tenants may be able to access new funding and they are making £500 million available to fund households facing financial hardship. From April, Universal Credit and Housing Benefit payments are also set to increase.
For those landlords who were struggling with tenants in rent arrears before the outbreak, the stay on possession proceedings means they will not be able to regain possession for many months, even if they do have a good reason for continuing with possession proceedings. Landlords should check to see whether they are entitled to make a claim for lost rent under their insurance policies and, if applicable, whether they can obtain a mortgage holiday from their lender.
*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.*
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