16/03/2020

Emergency measures

Ahead of the government introducing the bill for emergency Coronavirus related measures later this week, Labour have published a draft bit of legislation which addresses the position of (most) renters where they fail to pay rent due to effects of the coronavirus, with the aim of the Govt incorporating it.

The draft legislation is here. (Full disclosure, I had a bit of a hand in this, together with Justin Bates of Landmark Chambers who did by far the biggest part of it.)

The effect would be that for assured, assured shorthold, secure or Rent Act tenants, where there was failure to pay contractual rent that was in any way related to the effects of the coronavirus during a designated period, this would not count as rent lawfully due for the purposes of the relevant rent arrears grounds of possession.

This would not stop the money being owed to the landlord eventually (although there is also an embargo period on when the landlord could start to seek it by a money claim), but it would mean those specific arrears would not count for rent arrears possession claims, now or in the future.

Where the tenancy may be subject to a section 21 notice, this draft does not stop potential service and proceedings under s.21, as it is impossible to establish the reasons for a section 21 (and some uses of it may be for such things as recovering an abandoned property).

However, what happens with possession claims in general, including section 21 based claims, over the next weeks and months, we will have to see. If the courts close (and the Grenfell Inquiry was suspended today – 16 March) then things may grind to a halt in the meantime anyway.

Be safe out there, everyone. These will be difficult times.

Giles Peaker is a solicitor and partner in the Housing and Public Law team at Anthony Gold Solicitors in South London. You can find him on Linkedin and on Twitter. Known as NL round these parts.

19 Comments

  1. Ben Reeve-Lewis

    I’ve just been trying to avert a threatened illegal eviction this morning. I warned the landlord of the usual consequences and advised on due process but he threw back at me the news doing the rounds that courts might block evictions. For once my persuasion skills literally spluttered to a halt. I can see these suggestions creating another set of problems.

    I’m not saying it isnt right, I agree with it but in the knowledge that there will be side effects and tears before bedtime

    Reply
    • Giles Peaker

      I doubt that rumour had anything to do with this. But realistically, what will happen to possession claims generally if the courts close to most proceedings (as is possible, if not likely)? The likelihood has to be that they will be suspended anyway.

      Reply
      • Ben Reeve-Lewis

        What about extending capacity for video link hearings?

        However none of these measures address what will happen with Part VII duties, especially s193 duties

        Reply
        • Giles Peaker

          The likelihood of MoJ/HMCTS moving quickly enough on video links is, I’m afraid, vanishingly small. They are currently still insisting that they are done via dedicated ISDN lines, for example.

          Part VII duties are another issue, of course.

  2. Mandy Thomson

    While protection for tenants is welcome, don’t forget we also need protection for (the mostly) small landlords who will bear the knock affects – I see no mention of such people in this report? These landlords could also be economically affected by COVID 19; most small landlords rely on income from jobs in addition to the small income they generate through rental property.

    There would need to be guaranteed mortgage and service charge payment holidays for small landlords with tenants unable to meet rent payments because of COVID 19 for prolonged periods.

    Moreover, to be eligible for exemption from possession proceedings, tenants should be compelled to provide evidence that their income is genuinely affected by COVID 19 where they are unable to pay their rent for more than a fortnight.

    Reply
    • Giles Peaker

      Lenders are clearly looking at mortgage suspensions. Income from jobs puts small landlords in the same boat as everyone else, so we will have to see what the Govt come up with on that.

      Guaranteeing a mortgage suspension where income affected by tenant’s corvid related failure to pay rent would be legislatively tricky, as the landlord would be wholly reliant on the tenant to provide evidence of the cause.

      If you consider this proposal, you will realise that of course tenants would have to evidence that the failure to pay rent was Corvid related. That would be their defence.

      Reply
    • Ovi

      I wonder if there will be any similar protection measures for homeowners if unable to pay their mortgages in the near future due to losing /or seeing a reduction in their income in the current climate?

      Reply
      • Ovi

        Thanks Giles, just saw your reply above.. Didn’t see it before I posted my question

        Reply
  3. John

    I trust then that both Giles Peaker and Ben R-L will be working without pay for the foreseeable future………………..No, thought not.

    Reply
    • Giles Peaker

      Oh John, your complete inability to read, or think, is almost endearing.

      Reply
  4. Pete

    Fitting a new boiler for a landlord and he’s just showed me and the tenant this and we all think it’s b******!
    So if the tenant doesn’t pay the landlord, the landlord doesn’t pay me and the boiler doesn’t get fixed.
    Taking it a step further, we don’t pay no tax cos we ain’t earning and when the landlord evicts, you don’t get your juicy legal aid.
    You’ve not thought this through pal.

    Cheers! Pete the plumber

    Reply
    • Pete

      Landlord just told me tenant doesn’t even have to pay owt if CV related. They keep the full £98/week.
      You need to get out in the real world mate.

      Reply
    • Giles Peaker

      Hi Pete. Do try reading.
      Tenant still owes the rent. This is not a rent holiday. It is not as if the rent will magically get paid in these circumstances if this wasn’t in place.

      And, while you’re here, your hourly rate will be much higher than legal aid.

      Reply
      • John

        This would not stop the money being owed to the landlord eventually (although there is also an embargo period on when the landlord could start to seek it by a money claim), but it would mean those specific arrears would not count for rent arrears possession claims, now or in the future.

        “Eventually”……………this is just more Landlord bashing mate…….the tenant could owe a years rent and we would still be unable to evict them with this nonsense. Money claim is not worth the effort bearing in mind some of the ludicrous repayment orders that are made.

        Reply
        • Giles Peaker

          John, you still aren’t getting it. This isn’t a rent holiday. This is where there are arrears resulting from coronavirus. Meaning it is in situations where you, the landlord ALREADY HAVEN”T GOT THE MONEY. It isn’t stopping you getting the rent payments, where this would apply, they have already not happened.

          No, the tenant couldn’t owe a year’s rent (not unless the Government adopted it and changed the dates). On this as drafted, it would be 5 months at most, and all have to be coronoravirus related. So, it would not stop you pursuing ground 8 on 7 months arrears. And the money is still due, so you can claim for it or make arrangements with the tenant.

          Your attempts at sounding hard done by would be more convincing if you paid attention, rather than, well, being a bit of a berk

          Have you thought through the practicalities of finding replacement tenants in the middle of a country wide lock down, by the way? At current rents, when many people will be losing their jobs? All those costly uncertain void periods? Good luck with that…

  5. Ben Reeve-Lewis

    When faced with a crisis not seen since world war two (Evan Davies BBC Radio 4 this afternoon) will government see fit to introduce rent control?

    They tend to do it in wartime.

    Landlords evicting tenants for rent arrears? – gonna push the problem onto homelessness units being funded by Rishi Sunak’s emergency announcement at tea time.

    Eviction suspensions? Public sympathy? probably smaller than you can see in a microscope.

    Rent control? Probably just days away

    To be honest I’ve also been struggling with reality and carping about how my own life is going to change. Partner a travel agent not earning a penny for the foreseeable future, attempting to deal with today’s crop of illegal evictions without visiting the premises. Life is hard and its going to get a lot harder. Best not to bleating about income. Everyone is taking a hit, landlords aren’t a special case

    Reply
    • Giles Peaker

      Apparently going to deal with eviction by ‘guidance’ to the courts. Which, as far as I can see, could only be guidance for court bailiffs not to act on warrants (depending on circumstances). Which, I have no doubt, will upset landlords rather more than our modest proposal.

      Reply
  6. David W

    Rent control Ben? Little hope, I suspect. RSLs etc. are just weeks away from imposing a 2.7% rent increase on tenants, permissable under the Regulator’s rent direction. When I raised this matter with my own, on the basis that it was surely inconceivable in the current circumstances, they said well people can just go into bigger arrears! Smacks of councils, RSLs, etc profiteering in a national emergency amongst those least able to weather the Covid-19 storm. Giles, have a word with someone influential please…

    Reply

Trackbacks/Pingbacks

  1. Will Government act to protect renters? – Planet Rent Blog - […] Leading property lawyer Justin Bates of Landmark Chambers has been heavily involved in drafting the legislation. Giles Peaker who…

Leave a Reply (We can't offer advice on individual issues)

This site uses Akismet to reduce spam. Learn how your comment data is processed.