21/08/2020

From March to September – possession stay extended.

The stay on possession claims imposed by CPR 55.29 was due to end on Sunday 23 August. In an extraordinary, after the last minute, step, on 20 August 2020 the Lord Chancellor directed the Master of the Rolls and the Civil Procedure Rules Committee to amend the Rules to extend the stay for 4 weeks, to 20 September 2020. This was done today 21 August.

A letter by the Master of the Rolls sets this out.

Master of the Rolls letter

It is indeed of an ‘extremely unusual nature and timing’. I rather suspect that might result in a challenge. We shall see.

It has to be hoped – fervently hoped – that this four week extension is to buy time for there to be a proper, long term solution to the issues presented by the end of the stay on possession claims. Parliament returns on 1 September and any serious address to the issues would require some form of legislation.

A four week blanket extension of the stay on all possession claims (save against trespassers) is in itself, virtually pointless, unless that time is used for something.

The text of the CPR 55.29 amendments is awaited. And this presumably leaves Practice Direction 55C orphaned, unless also amended.

In the meantime, the Guardian reported

One source said civil servants and ministers have been considering whether protections could remain in place for people who can show they have fallen behind on their rent because of coronavirus. 

Well, yes, there was draft legislation to do that put forward by Labour back in May. Back when parliament was sitting and something could have been done about the 23 August position. Four months later, we have this later than late panic driven extension of the stay…

Update: The Govt has now also announced:

The government also intends to give tenants greater protection from eviction over the winter by requiring landlords to provide tenants with 6 months’ notice in all bar those cases raising other serious issues such as those involving anti-social behaviour and domestic abuse perpetrators, until at least the end of March.

The government will keep these measures under review with decisions guided by the latest public health advice.

When courts do resume eviction hearings they will carefully prioritise the most egregious cases, ensuring landlords are able to progress the most serious cases, such as those involving anti-social behaviour and other crimes, as well as where landlords have not received rent for over a year and would otherwise face unmanageable debts.

Now I have a lot of questions – starting with what happens to the three month notices that have been served between March and whenever this extension to 6 months takes place? If they remain valid, will there be a flood of notices served now? If not, how can you retrospectively change notice period?

Also, will they remember to extend the ‘use it or lose it’ period for section 21 notices – currently 6 months from date of service.

But above all, this looks like a wasted opportunity to actually do something about the position of many coronavirus-affected renters, other than to push the problem a little further down the line.

Update – amended CPR 55.29 test here – straight date swap.

Update 27/08/20 – Practice Direction 55C has been quietly amended to take effect from 20 September 2020, the end of the extended stay. However the internal dates (claims before or after 3 August 2020) remain the same.

 

 

 

 

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.

55 Comments

  1. petertheteacher

    Extending this protection for those in genuine hardship is fine. But why should this apply to a long standing bankruptcy recovery process where the debtor owes well over a million pounds to HMRC and hundreds of thousands to the maintenance account of the building where he peacefully resides…..?

    Reply
    • Giles Peaker

      Because separating off different kinds of situations would require legislation and parliament isn’t sitting.

      Reply
      • Abdal

        As a homeless officer this is good news

        Reply
    • Hibat Shaikh

      There is no supervisory procedure on tenants and they have given every opportunity to manipulate the situation in their personal interest. They are receiving Universal Credit, housing benefits as well as grants. Spending monies to buy cars, vans, even going on holidays, while landlords are not offered any financial benefit or any alternate in real termS. Mortgage holiday for three months is actually in occurring extra interest, making Substantial increase on their Mortgagee loans by Added multiple interest as well as increase in monthly payments by lenders.

      The situation is Landlords cannot afford to pay mortgages as no or little rent received from tenants and also it is not possible for them to get rid of properties as tenants would virtually make it impossible by not allowing viewing and would not move out.

      What landlords should do, no one has solution as every one working against the interest of landlords. It is not fair with Landlords.

      Reply
      • Giles Peaker

        Of course there is a supervisory procedure on tenants. It is called landlords.

        No tenant gets Universal Credit and grants. No tenant gets grants. I think you are thinking of landlords, getting for example energy efficiency grants. The stuff about cars, vans and holidays is, frankly laughable, ignorant nonsense. Do you know how much Universal Credit pays?

        The stay on possession claims also extends to mortgage repossession claims, so also benefits landlords facing problems.

        The NRLA evidence is that very few tenants haven’t paid the full rent, or reached an agreement with their landlord. So, on the NRLA’s own case, this is not really a pressing concern.

        Reply
      • Naz

        I agree no protection for landlords tenants who does not pay. It is one sided law. Those MP talk too much they should not receive salary. If they are do much concern about tenants they should pay tenants rents. Specially labour party MP live in a dream world.

        Reply
        • Giles Peaker

          You do realise that this is a government measure?

          You can still bring a money claim for rent arrears. And serve notice (currently 3 months), and issue a possession claim. It looks like any such claim will proceed after 20 September.

        • John (not Jon)

          Replying to Giles reply below, if one were to pursue a money-claim for arrears whilst not yet being able to get a hearing for the possession claim, what stops the tenant paying off the past arrears using money intended for current or future rent, thereby satisfying the historic debt but creating a new amount of arrears beginning from a later date? Wouldn’t this later debt then have to be pursued as a fresh money claim?

        • Giles Peaker

          There would still be the debt at the time of the decision on the money claim. And in any event up to landlord where payments are allocated – against current rent or against existing arrears, unless tenant has specifically hypothecated the payment.

          If the tenant pays off the arrears claimed, so the rent account is zeroed, then doesn’t pay rent again in the future, that would obviously have to be a fresh claim.

    • Baffled

      -The points about bankrupt tenants is a good one. As far as I can see all a tenant has to do is put themselves into bankrutpcy and the L cannot recover rent, so there are no arrears. The tenant wil be free 12 months later and the L has no remedy – getting possession is the remedy for a L whose t goes bankrupt and that has been effectively withdrawn. I don’t blame the tenants – many of them will have nothing to lose.
      -Are notices served not expired now invalid ?- silence from the Govt. What about people who have already served and ( like me ) made their position much worse as a result. We were all in agreement as my tenants wanted to split up, so I decided to sell. and served notice to satisfy buyer’s sols. .Now this. Chaos. Female tenant now can’t move as all family properties let by private individuals have vanished. My notice still valid to terminate the tenancy so likely to be left with the soon to be bankrupt tenant and her children, possibly housing them and having to maintain the property for free for over a year, while her ex partner, who I mostly let to ,goes because I terminated the tenancy. . I’m a single mother myself renting elsewhere ( but not abroad) for work reasons and paying the mortgage. I don’t make any money out of it. . What am I supposed to do? Have the Govt even looked at any statistics on how many properties are let out by private individuals on a non commercial basis and the impact on them or their tenants or potential tenants of messing around llike this?
      -What about the iimpact for available properties for rent? No private individual in their right mind will now let out. , Commercial cos will hoover up properties and be the only ones in the market and jack up rents accordingly. Only one group of winners here, in my opinion, and it won’t be the tenants.

      Reply
      • Giles Peaker

        Can still go for possession, even if the pre bankruptcy arrears can’t be sought. Arrears post dating bankruptcy order can be sought and be ground for possession.

        As far as we know, notices served now with 3 months notice remain valid. If that is to be changed retrospectively when the new 6 month notice period is brought in, it would be extremely messy indeed, so unlikely.

        Reply
  2. James Browne

    I wonder if they gave any thought to the amount of taxpayer’s money (and private client’s money) already spent preparing for hearings listed between 24 August and 20 September will now be wasted?

    Reply
    • Giles Peaker

      I think the amount of thought given overall could be characterised as lacking.

      Reply
  3. Luke

    Do those currently under three month’s Notice need a fresh Notice or does it automatically extend?

    Reply
    • Giles Peaker

      Post now updated with comments and questions on the Govt’s announcement of pending ‘6 months notice’

      Reply
      • R

        Thanks. Trying to grapple with what this also means on reactivation notices too – I think we’ll need to wait for Parl to sit for that one? All fun and games on a Friday evening!

        Reply
        • Giles Peaker

          Well PD 55C (reactivation notices and all) is now an orphan. Unless that is amended with new dates.

  4. Nikk

    How will this impact the timescales for the Prevention Duty?

    Reply
    • Giles Peaker

      Insofar as triggered by a s.21, then could be over 6 months of prevention.

      Reply
      • Stephen Cohen

        Query on this.

        Re. Prevention Duty & s.21 scenario, HA96, s.175 (5) states applicant ‘threatened with homelessness’ and therefore Prevention Duty triggered if valid s.21 notice served and that notice expires within 56 days….??

        Reply
        • Giles Peaker

          Yes, so prevention duty would only kick in 56 days before expiry of a six month notice.

  5. David

    The proposed change to six months’ notice, even for mandatory grounds under s8, just leaves landlords carrying the can. A free pass to tenants to basically not bother paying their rent, knowing that landlords cannot do anything about it for, realistically, about another nine months. I’d happily see them adjust ground 8 for inflation, maybe make it 4 months’ arrears, but not this.

    I see the RLA have, once again, been about as much use as a chocolate teapot.

    I wonder how mortgage lenders to landlords will take it…

    Reply
    • Giles Peaker

      How many tenants are ‘not bothering to pay the rent’? Apparently very few, according to the NLRA.

      Reply
      • frustrated landlord

        Our tenants haven’t paid for four months, and have not responded to offers of payment holidays or payment plans. We believe they have left the country, and are subletting. We served a section 21 two months ago. Do we now need to go another four months without rent? The house is mortgaged and our own incomes have been affected by the pandemic.

        Reply
      • Ben Reeve Lewis

        Last NRLA figures I read was an optimistic 10%. So why are they bothered about a further stay? Everything is fine. “scaremongering” was I believe the phrase they used just 2 days ago

        Reply
      • David

        My own tenant hasn’t paid a full month’s rent since February, with his payments being both too little and sporadic. It makes paying the mortgage a lot of fun. I’m sympathetic, of course, but I don’t see why I’m being left to dangle potentially until February next year with no recourse if he decides to stop even the sporadic payments.

        As you said on Twitter, the RLA have been hoisted by their own petard. As much use as a chocolate teapot.

        Reply
      • David Heal

        So why go to such lengths to protect these “very few’ tenants and penalise their landlords?

        Reply
        • Giles Peaker

          They aren’t. As far as I can see, current stayed possession claims and new possession claims where a three month notice has been served and expired will go ahead after 20 September.

          As the post makes clear, this appears to me to be a last minute panic, and not properly thought through.

      • Michael Barnes

        Just because it is “very few” (and I believe that is of members who responded to their survey), how does that justify removing legal process from those who are facing significant problems?
        Even if it is only 1% of tenancies that are in significant arrears, that is 45,000 tenancies who’s landlords are not being given access to justice.

        It is unlikely that many defaulting tenants will be able to repay any arrears that might be ordered by a court. So their landlords are being denied any legal recourse to limit their losses.

        The government appears to think it is OK for landlords to receive no income for over 12 months.
        And they claim to be supporting landlords; I see no support.

        Reply
        • Giles Peaker

          The claim was that the survey was representative. Though actually, it would result in roughly the same figures as Shelter – some 200,000 odd. (c. 5%). But we have to distinguish various things here.

          First, the government should have sorted this all out in May/June. They had plenty of warning, and plenty of solutions offered that would not have resulted in this mess.

          Second, there is a serious question – raised by various medical bodies – as to whether making people homeless in an ongoing pandemic (with numbers rising again) is a good move on a public health basis. (The Govt has botched that one, as I’ll come back to.)

          Third, what kind of support should be provided for tenants who have (or will, at the end of furlough) suffer a signifiant loss of income due to coronavirus. (The Govt has botched that one too – see below).

          Now, where we are is that the Govt has panicked at the last minute – hence the further 4 week stay, to buy time to put something into legislation. But, as far as I can see, all existing stayed claims and all claims based on the three months notices served between March and now (or indeed until the six month notice period is brought in by legislation) will be free to go ahead after 20 September.

          Of course, the proposed 6 month notice period does nothing to help landlords, or indeed tenants. It just punts the problem down the line again, although not sufficiently, because there will be a lot of new claims based on the three months notice NSPs served in the meantime. So some tenants facing arrears due to the pandemic will get evicted under s.21 and ground 8, but some landlords will face extended periods of arrears due to the incooming six month notice period, and there will be another wave of possession claims down the line.

          Meanwhile, the courts will be struggling to cope even with the backlog (probably c. 40,000 cases) let alone new claims, as at least for cases needing hearings (not accelerated possession proceedings), the hearing rate will be about 25% of what it was. This is a combination of long term underfunding for the courts and coronavirus effects. And this effects everyone, not just landlords (or indeed tenants).

          So, what is missing is an actual plan to deal with the effects of the pandemic on tenants’ income – both during lockdown and in view of the likely redundancies and lay offs once furlough ends. What is also missing is – as far as possession proceedings go – the most sensible answer, which is to remove s.21 and ground 8, so that the court has discretion to deal with the circumstances as a whole, while allowing possession claims to go ahead.

          And, finally, every business has taken a severe covid hit. Landlord have been supported by mortgage holidays, VAT holidays etc. I’m not entirely sure what makes landlord so special that they should be exempt from the effects that the pandemic has had on everyone else.

        • Michael Barnes

          “I’m not entirely sure what makes landlord so special that they should be exempt from the effects that the pandemic has had on everyone else.”

          Other businesses have not been forced to provide a service to non-paying customers and prevented from obtaining new customers.

        • Giles Peaker

          Other businesses have been forced to close down entirely, while still facing their ongoing liabilities. You might want to reconsider your point.

        • John

          “Other businesses have been forced to close down entirely, while still facing their ongoing liabilities. You might want to reconsider your point.” Other businesses are taxed on profits not turnover, other businesses can offset their loan interest against profits, S24 stopped that, there’s two big differences for a start

  6. Verity Underhill

    I have a tenant who has not paid any rent for 7 months, sec 8 and sec21 served,. Tenant refuses to communicate with me in any form.The tenant has been working full time all through the pandemic, and stopped paying rent before lockdown1very angry frustrated landlord!

    Reply
    • Giles Peaker

      Issue a possession claim now if the notices have expired. It looks to me like the claim would proceed after 20 September.

      Reply
  7. Jen Oree

    Good news for tenants and good news for Local Authorities

    Reply
  8. Rachel Greenway

    Has anyone seen updates with regards to the lifespan of the Section 21 notice being extended given that we are now required to serve 6 month notices?

    Reply
    • Giles Peaker

      No, and there is no sign of regulation extending the notice period to 6 months yet either. So my view is notice period remains 3 months till further notice.

      Reply
    • Millie Louise

      Hi, I am having the same issues but I’ve just come across these two government documents which seem to suggest the three month notice period is valid until 30 September: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/878450/Form_6A_Notes_01_04.pdf

      https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/876592/200324_Form_6A__1_.pdf

      My interpretation is if you’ve served the notice before this date then it’s valid. I haven’t checked with a legal firm yet but I’m aiming to today.

      I’d be interested to hear your take on this.

      Reply
      • Giles Peaker

        Those are old documents relating to the original Coronavirus Act extension of notice periods in March, which lasted to 30 September but could be extended.

        The current position, I think, is that notices only need 3 months until whatever date changed regulations for 6 months notice come into force. And that date we don’t know yet.

        Reply
        • Millie Louise

          Thank you for your response, I appreciate it. I was trying to establish if I could still enforce a break clause (as a landlord) at six months into an AST, but as the Housing Act states you can’t serve notice in the first four months and the notice is now three months not two, it effectively invalidates the break clause, if I understand that correctly?

        • Giles Peaker

          I couldn’t say, it would depend on the wording of the break clause.

  9. Kane Davis

    Any expected date for when new Regs will *actually* change the legal requirement to give 6 months’ notice? Very difficult in an advisory capacity this week to determine if notices giving 3 months are valid or not – clearly they are in current legislation, but that doesn’t help trying to explain to upset tenants!

    Reply
    • Giles Peaker

      No. But suspect it will be after Parliament returns on 1 Sept.

      Reply
  10. Tim Nightingale

    Isn’t it the case that notice requirements set in primary legislation (e.g. s83 HA 1985) can only be changed by Parliament, so they can’t change again until after the MPs get back from their summer holidays? I expect Robert Jenrick is using the time wisely and making sure he’s got it all fully worked out so that he can give MPs a microwave-ready bill when they come back.

    I can’t see there’s much prospect of the new notice requirements being retrospective; it would be against natural justice, and would be incredibly disruptive. The changes brought in by the Coronavirus Act 2020 took effect when the act was passed – why should these changes be any different?

    Reply
    • Giles Peaker

      There is a power to do it by regulation under Coronavirus Act Schedule 29, but there are complexities, so I think likely to wait for Parliament – return 1 September.

      Reply
  11. Claire Pearce-Crawford

    Surely Im not the only person that is confused ? Question for you Giles….
    I have a s8 NTQ that is due to end next week, do i go for a possession order and hope they give it me after the Sept?
    Also I have notices that are due to expire, do I serve another notice NSP?
    Last question – the cases I have that have reactivation notices waiting to be serverd, are now held with us until after sept?

    if anyone has any advice, please let me know, I think we are all in the same boat, and as confused as hell!!
    thanks

    Reply
    • Giles Peaker

      If it is a 3 month notice s.8, I think you can file a claim on expiry, following the requirements of PD 55C (https://nearlylegal.co.uk/2020/07/reactivation/ ) and it should then progress after the stay ends on 20 September.

      I don’t think the 6 month notice period will apply until regulations(at least) have been made and are in force, and are unlikely to be retrospective, so existing NSPs should be valid – but if they expire after the 6 month regulations are in force then all I can say is I don’t know, we would have to see the wording of those Regs to work out the position.

      I’m struggling with the position on re-activation notices. PD 55C is in force (as of 23 August), but doesn’t actually give a date on or after which reactivation notices should be filed (because it was supposed to be the end of the stay). So I suppose re-activation notices could be filed and served now, though obviously nothing would happen till 20 September. I don’t know if court offices will interpret things that way though! but now says it applies from 20 September. So I think no reactivation notices till 20 Sept.

      It is a mess and a muddle, no doubt about it.

      Reply
  12. Antony King

    Our resident caretaker’s employment was terminated in January but he is refusing to vacate the flat. The lease makes the employment of a resident caretaker mandatory.
    Does the ban on evictions extend to circumstances where tenure is a consequence of employment?

    Reply
    • Giles Peaker

      The stay on possession proceedings applies to all residential possession claims. That ends on 20 September 2020.

      Reply
  13. Deb

    I served a S21 notice that is due to expire on 19 September. The tenant had stopped paying her rent but, luckily, I knew to apply for direct payments from Universal Credit so at least am not out of pocket. But, in the meantime, she is in breach of her agreement (repairs and maintenance – the noise has now stopped, luckily for my kind neighbours). I just want her out and all the Government are thinking about is “the poor tenant” and who is going to house them. If the “poor tenant” looked after the house and paid rent, many landlords would not want to evict. Sometimes, the eviction is not malicious but because circumstances change (my daughter and grand-daughter are homeless and staying with friends until I can get the tenant out). And this was just a rant…. I am fed up with them changing their minds just because they can. it feels like as soon as you get to the light at the end of the tunnel, they make the tunnel longer.

    Reply

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