Further update for Residential Landlords since the article below (21 August 2020): The Government has announced that the ban on residential possession proceedings has been extended from 23 August to 20 September. As of Monday (24 August 2020), the Courts were poised to review all of the cases that have been sitting stayed waiting for progression, which is now been put off for four further weeks.
This news will likely be frustrating for landlords who may have been without any rental payments for this period, but is likely a welcome relief for the tenants in financial hardship. If you are in any doubt as to your position, whether as a landlord or a tenant, please contact Lee Pearce, Joe Brightman, Danielle Eley or Molly Frankham.
Update for Residential Landlords: New rules to be introduced in possession claims when the stay on proceedings comes to an end on 23 August 2020
The current stay on residential possession proceedings and bailiff appointments expires on 23 August 2020, but the introduction of a new practice direction governing possession claims means business as usual is not set to resume for several more months and residential landlords will have to meet additional court requirements in the process of getting their properties back.
Newly published Practice Direction 55C (“PD 55C”), which is the result of the deliberations of the emergency working group on possession claims, comes in to force on 24 August 2020, temporarily amending the possession process, until 28 March 2021. The process will be subject to interim reviews during its lifespan.
To summarise, PD 55C provides the following:
Claims stayed prior to 3 August 2020
– Landlord claimants who wish to reinstate proceedings stayed prior to 3 August 2020 must complete a written reactivation notice (“Reactivation Notice”, which they must provide to both the court and the defendant.
– The Reactivation Notice must:
- state that the claimant wishes for the claim to be reinstated;
- set out the claimant’s knowledge of the defendant tenant’s situation in respect of how the coronavirus pandemic has affected the defendant and their dependants;
- where the claim is based on rent arrears, attach a rent account, showing the rent possession for the previous two years;
- attach a copy of the last directions order;
- attach a draft order setting out additional directions, or, alternatively, a written statement that no new directions are required; and
- include a written statement as to whether the proceedings may be heard by video or audio link.
– Once the Reactivation Notice has been served and filed:
- the other parties have 14 days to file and serve a response to the reactivation notice if they disagree with any of the points in such notice; and
- the court must give at least 21 days’ notice to all parties in respect of any hearing listed, but the court will have the power to fix a court date either on or after re-issuing of the claim and the standard period stipulating that possession claims will be heard not more than 8 weeks from the date of issue is suspended, which may lead to longer waiting times for landlords.
Consequences of failure to provide Reactivation Notice
- If a trial date was already set prior to 27 March 2020, such hearing will now be vacated, and proceedings stayed, unless a Reactivation Notice is filed and served not less than 42 days before that trial date. Considering all possession hearings due to be heard between 27 March and 23 August were automatically stayed pursuant to Practice Direction 51Z, it seems this part of the rules refers to hearing dates which were set prior to 27 March 2020 and were due to be heard between 24 August 2020 and 28 March 2021.
- If a Reactivation Notice containing all information stipulated above has not been served and filed by 4pm on 29 January 2021, the claim will automatically be stayed.
New claims and those stayed on or after 3 August 2020
- The claimant landlord must bring to the hearing two copies of a notice setting out the claimant’s knowledge of the defendant tenant’s situation in terms of how the coronavirus pandemic has affected the defendant or their dependants.
- The above notice must also be served on the defendant 14 days prior to the hearing.
- If the accelerated possession procedure is being used, the claimant must serve and file the above notice with the claim form.
Explanatory memorandum accompanying the rules (the “Memorandum”)
Prior to the publication of the PD 55C, the Memorandum was published, indicating the reasons for the new rules and the way they should be approached.
The Memorandum states that the kind of information that the landlord should seek to disclose in respect of the defendant’s situation in light of coronavirus, that being information which allows the court to have regard to vulnerability, disability, the defendant’s social security position, and whether the defendant or others in the household are “shielding”.
The Memorandum furthermore states that landlords will be required to demonstrate that they have engaged with tenants in an effort to find a solution before making a claim, although the requirement is not mentioned in PD 55C itself. This statement is without elaboration or further explanation and begs many questions, such as: how much engagement will be required with the tenant? What kinds of solutions should be posed in situations where tenants have no way of fulfilling their rental obligations for the foreseeable future, or the landlord simply wants his/her property back for personal reasons such that there is no solution to be reached? These uncertainties are yet to be clarified.
Points to note
- The new rules are likely to increase the amount of time taken for possession proceedings to reach the finish line, especially where court hearings have the capacity to be set for longer than 8 weeks from the date of issue of claims.
- Although the rules call for claimant landlords to be proactive in providing the court with details regarding the situation of defendant tenants, in light of coronavirus, and to engage with tenants as much as possible to reach solutions prior to bringing claims, it is hard to see how the rules will have much impact on the outcome of section 21 claims or section 8 claims brought on mandatory grounds (i.e. rent arrears). Ultimately, if the claimant landlords have followed the correct requirements and, in the case of section 8, the relevant ground applies, a judge is obliged to make a possession order.
- The main way that these rules may have effect is in regards to staying the date of possession for the maximum period of six weeks, especially given that the courts may see a lot more often than usual that tenants are able to show that they are in ‘exceptional hardship’. Nonetheless, the court will still not be in a position to delay the date of possession any longer than six weeks.
It is clear that on 24 August 2020 many landlords are going to be keen to get their possession proceedings back on track and it will be important that the PD 55C rules are followed property so as to ensure claims can move forward as efficiently as possible in the circumstances.