The Coronavirus epidemic is impacting on all aspects of our economy and residential lettings are no exception. This month, Anna Pettinger outlines emergency changes made to the tenancy laws…
My tenants are already behind with their rent and I’m worried the situation will only worsen during the Coronavirus crisis. Can I serve notice on them when they are two months in arrears?
The government has implemented emergency legislation, affecting the way possession notices are served on tenants, that is expected to be in place until September 30 this year. Importantly, it does not impact on those issued before its introduction on March 26.
Essentially, notice periods have been increased to three months, from two weeks if you choose the Section 8 route and two months on a Section 21.
When your tenants are two months in arrears, a Section 8 can be served in the normal way, but you cannot demand possession until three months have elapsed. (Forms setting out this new notice period can be found on government’s website.)
Will the rules revert to normal come October?
It is expected that post-September, private landlords will still be expected to abide by the pre-action protocols usually imposed on social landlords.
This means you will need to contact your tenants, as soon as you become aware of any arrears, to discuss the reason for them and attempt to arrange a payment plan, where possible.
You will be expected to demonstrate compliance with the pre-action protocols and that you attempted to avoid litigation. If you can’t do so, a costs order could be awarded against you, or the claim may be adjourned or struck out entirely.
Currently, most courts are delaying possession hearings until July and even if they do take place, it is unlikely the tenant will be ordered to leave before then. In any event, bailiffs are not permitted to evict anyone from their homes in the next three months.
Is there any other way to minimise my losses?
There is another option. We are seeing an increasing number of landlords entering into a deed of surrender, which means the tenants agree to forfeit the lease and move out. If they don’t uphold their side of the bargain, however, you would still need to serve notice on them and currently, the three-month notice period would apply.
One other point of note: It is extremely important you continue to carry out repairs to your property, as it is unlikely Covid-19 will be considered a reasonable reason to delay taking action.
Whilst these changes to the possession rules are only temporary, the current situation could be extended or the law altered again. It is, therefore, more important than ever to check the rules at the point you wish to serve notice on your tenants.
If you would like more information about the emergency Coronavirus legislation and its impact on private landlords, contact me by email: firstname.lastname@example.org or call 0114 218 4000