Coronavirus - Changes to repossessions

Introduction

As part of their package to protect renters, the Government has enacted a series of changes and restrictions on landlords regaining possession of their property during the coronavirus pandemic.

These changes are intended to be temporary with a view to preventing tenants from being made homeless during the crisis.

This guide is intended to cover the requirements for landlords under this temporary regime. As this is a rapidly moving topic this guide will be regularly updated as new information becomes available. It will also include new resources to assist landlords with complying with the pre-action protocol in the near future.

What are the main changes to possession?

Notice periods in most cases are now extended to three months until September 30th 2020. This notice period may be extended to six months in the future.
All current possession proceedings were originally suspended for 90 days from 27 March. This has now been extended until 23 August.
Landlords will be expected to abide by the pre-action protocols for social landlords in the future.

Are any further changes to possession rules planned at this time?

There are no further changes beyond the extension of the possession ban confirmed at this time.

However, on 22 May 2020 the Housing, Communities and Local Government Committee published a report recommending that once the courts re-open, they be given the discretion to dismiss Section 8 notices for rent arrears and Section 21 notices until 31 December 2020.

The Government is not obliged to follow this recommendation but is expected to respond to the report by 12 June 2020. The NRLA will continue to update this page if any further changes do go ahead.

I thought there was a complete ban on repossessions, is that the case?

From 27 March 2020 all ongoing possession proceedings are suspended for five months until 23 August with an option to extend the suspension further.

As a result, it will not be possible for anyone to be granted a possession order or enforce a possession order until the end of August at the earliest.

What is our position on these temporary changes?

The NRLA recognise that these are unprecedented circumstances, and it is vital that tenants remain secure in their homes if they are adversely affected by coronavirus and the restrictions advised by the Government.

However, we have concerns about what happens to pre-existing notices that were served for legitimate reasons before the coronavirus pandemic began in the UK. The section 21 notice in England lasts only six months from the date of service. With the suspension of the courts, these landlords will feel compelled to reserve their notices, potentially worrying their tenants unnecessarily.

We are also concerned that there is insufficient protection for neighbours suffering from anti-social or criminal tenants. If landlords are prevented from taking action to protect their neighbours then local authorities must be properly resourced to allow them to take action on anti-social behaviour. Especially at this time where people will be spending more time near their neighbours.

Does the extension of the notice period apply to ongoing possession claims?

No. The draft legislation is clear that it only applies to notices served once the legislation comes into force.

However, with court proceedings and bailiff action suspended, most existing notices will expire before the landlord applies to court again.

How long is the extension on notice periods expected to last?

Until 30 September 2020 at present.

Can I serve a notice during this period?

Yes. While the original announcement suggested a ban on notices was possible, landlords may serve notices to quit, Section 21 or Section 8 notices if necessary. Any notices served must abide by the new notice period though.

I have an existing notice that has now expired. Can I apply to court?

This should be possible, though if the application is accepted it will be immediately suspended until 23 August. However, with courts operating skeleton staff it is possible these applications will be rejected, wasting the landlords time.

What are the new notice periods?

For notices to quit, Section 8 and Section 21 notices, the landlord must give at least three months notice before they can apply to court for possession.

This applies regardless of which ground is used for Section 8.

Does this apply to all occupation contracts

Most agreements in the private rented sector are caught by this extension. Lodgers agreements and other licences are not affected by the changes. In addition, non-assured tenancies are also not covered by these changes.

Will there be new prescribed forms published?

Yes, the Government has now updated Form 3 (section 8) and Form 6a.

These new forms must be used going forward.

Will the pre-action protocol requirement come in at the same time?

No, the changes for this have yet to be implemented. Landlords should be mindful of the requirements however as the Government has confirmed the changes will be introduced at some point in the near future.

What is the pre-action protocol for social landlords?

The pre-action protocol is a series of additional steps that a social housing provider should take as part of an application for possession for rent arrears or another mandatory ground.

The aim of the pre-action protocol is to encourage more pre-action contact and exchange of information between landlord and tenants and avoid litigation where possible.

Under the changes announced by the Government, these steps will now be expected of PRS landlords as well. As such once landlords are able to start proceedings again they will need to ensure they are compliant with these rules.

It is unclear at this time whether the existing pre-action protocol requirements will be changed. The following guidance is based on the current wording of the pre-action protocol for social landlords.

What are the general requirements of the pre-action protocol?

In general, landlords are expected to avoid taking court action while a settlement out of court is still being actively pursued.

Landlords are also expected to ensure they can document that they have taken steps to communicate with the tenant ahead of time. This requires them to ensure that the tenant understands any documents being served on them in relation to this.

Landlords should also be particularly mindful of vulnerable tenants and -

whether the tenant has the necessary mental capacity to defend a possession claim (this may require the appointment of a litigation friend)
whether there are any discrimination issues to consider under the Equality Act 2010

What are the penalties for non-compliance with the pre-action protocol?

Where the landlord has unreasonably failed to meet the pre-action protocol the courts may take this into account and either make an order for costs, adjourn the claim, or strike it out entirely where possession is not sought on mandatory grounds.

What are the requirements before serving a notice solely for rent arrears?

Once the tenant falls into arrears, the landlord should contact the tenant as soon as possible and:

provide quarterly rent statements showing rent outstanding and paid in the last 13 weeks
contact the tenant to discuss their financial circumstances and the reason for the arrears
find out what, if any, benefits the tenant is entitled to
try to agree with the tenant an affordable arrangement for paying the arrears with any arrangement to be confirmed in writing
advise the tenant to seek independent advice, especially if s/he has a general debt problem
if the tenant meets the criteria, arrange for direct payments of arrears to be made to the landlord from the tenant's benefits
assist the tenant with any claim for benefits, including housing benefit, the housing element of universal credit, and/or discretionary housing payments
establish effective liaison with the benefit department and/or the Department for Work and Pensions (DWP)
not start possession proceedings when the tenant has provided all the necessary evidence to support a benefit claim and there is a reasonable expectation that s/he will be entitled.

This must be done prior to the Section 8 notice being served.

At present social landlords have significantly greater access to the DWP, with private landlords having to repeatedly gain the permission of the tenant to discuss any Universal Credit claims and often find it more difficult to gain direct payments of rent. As such it may be difficult for landlords to assess whether the tenant has a genuine claim and to arrange direct payments.

The NRLA will continue to push for improvements to this system to ensure private landlords have confidence in Universal Credit and the direct payment of rent.

What are the requirements on the landlord once a notice for rent arrears has been served?

Prior to applying to court, landlords should:

make reasonable efforts to contact the tenant to discuss the situation and send to the tenant a copy of the Pre-action Protocol for Possession Claims by Social Landlords
postpone taking court action where the tenant has agreed to make reasonable payments to pay off the arrears and is sticking to that arrangement
warn the tenant of the intention to resume possession proceeding, giving clear time limits and instructions on how to avoid that, if they do not stick to the agreed payment plan.

What are the requirements before the court hearing?

No later than ten days before the date set for the hearing of the possession claim, the landlord should provide the tenant with up-to-date rent statements and disclose what they know to the tenant regarding their housing benefit or Universal Credit situation.

The landlord should inform the tenant of the date and time of any court hearing and provide an up-to-date rent statement and the terms of the order that will be applied for. The landlord should advise the tenant to attend the hearing as the tenant's home is at risk. Records of such advice should be kept.

If the tenant complies with an agreement made, after the issue of proceedings, to pay the current rent and a reasonable amount towards arrears, the landlord should agree to adjourn the court proceedings for so long as the tenant keeps to such agreement.

If the tenant ceases to comply with such agreement, the landlord should warn the tenant of the intention to restore the proceedings and give the tenant clear time limits within which to comply again and avoid restoration of the proceedings.

What are the requirements where mandatory possession is required for a reason other than pure rent arrears?

For Section 21 notices and section 8 notices with any other mandatory ground the landlord should write to the occupants explaining why they intend to seek possession.

This letter must give the occupiers a specific timeframe to make representations to the landlord in writing of any personal circumstances or other matters which they wish to have taken into account. The landlord may send this as an accompanying letter to the Section 21 or Section 8 notice they have served.

The landlord should consider any representations they make and respond to the tenant giving their reasoning as to why they still intend to start possession proceedings.

Once possession proceedings have started, the landlord is expected to attach to the claim form and witness statement the following information:

whether they have invited the tenants/occupiers to disclose any personal circumstances or other matters which they wish to be taken into account before they issue possession proceedings
whether they have considered any representations made by the tenants/occupiers
why they are bringing possession proceedings, and
any relevant documents (attaching copies) which they wish the court to consider in relation to the proportionality of their decision to bring proceedings.

Copies of any relevant documents which the social landlord wishes the court to consider in relation to the proportionality of the landlord’s decision to bring the proceedings should be attached to the schedule.