The Corporate Insolvency and Governance Act 2020 has now received Royal Assent. It applies to most companies as well as Limited Liability Partnerships.
The impact of Covid-19 continues as the stay on possession claims is extended. Landlords and legal practitioners alike have been urgently awaiting a decision on whether Practice Direction 51Z (or PD51Z), which effectively put a blanket stay on all possession claims until at least 25 June 2020, was to be extended.
The answer came very late on 5 June 2020, when it was announced that the stay is to be extended by 2 months. This means that no renter can be evicted until 23 August 2020 at the earliest irrespective of the grounds for possession relied upon.
On 26 March 2020, at the same time that the Covid-19 lockdown was first implemented, Practice Direction 51Z was issued and a stay was imposed on all possession proceedings. This essentially pressed the pause button on all possession claims including those that were about to be issued, those that were imminently about to go to trial and, those at the end of the process where a Possession Order had already been made and an eviction date was awaited. See our previous e-briefing.
PD51Z was amended on 18 April 2020 to make clear claims can still be issued and that it did not extend to claims against unknown squatters. Otherwise, the stay controversially applies to all other types of possession claims ranging from rent arrears to the most serious anti-social behaviour and so the impact has been far-reaching.
It has already been challenged in two cases which reached the Court of Appeal very quickly – the first, Arkin -v- Marshall, confirming the stay was lawful and the second, London Borough of Hackney -v- Okoro, confirming it covers appeals of possession orders as well.
On 5 June 2020, it became clear that the pause button would be applied for longer than first anticipated when Rt Hon Robert Jenrick MP, Secretary of State for Housing, announced that the stay in its current form (i.e. without any amendments) was to be extended until 23 August 2020.
We anticipate that updated guidance to all landlords will be issued in due course in the wake of the extension and following the statement made by the Secretary of State that, “We are also working with the judiciary on proposals to ensure that when evictions proceedings do recommence, arrangements, including rules, are in place to assist the court in giving appropriate protections for those who have been particularly affected by coronavirus – including those tenants who have been shielding.”
This news will be frustrating to many landlords particularly as many are seeing increased complaints about anti-social behaviour. It must be remembered that the Regulator may well look to Registered Providers to use the tools that are available to them during this period and could be critical if those tools are not used adequately.
So what, on a practical level, can landlords currently do to tackle some of the anti-social behaviour complaints being received:
Apply for Injunctions, both on notice and in emergencies to tackle serious ASB or breaches of tenancy. This is especially so where conduct also breaches lockdown rules or impacts more heavily on those isolating at home. At present this is the only tool left available to use for housing association landlords seeking to tackle anti-social behaviour being reported. In the last week alone, our team has submitted 6 injunction applications to various courts.
The courts are quickly adapting to new working arrangements and each court appears to have slightly different ways of working. Some courts are dealing with emergency, without notice applications completely on paper whilst others are dealing with them by way of telephone. Some courts are listing on notice applications or return date hearings partially by telephone for the landlord but requiring the Defendant to attend court in person.
We have been successful in obtaining various Injunction Orders including exclusion Orders, Power of Arrests and Injunctions for access for issues such as gas safety checks. Judges are also making carefully drafted orders for substituted service so that personal service of papers is not needed.
Local authorities and police forces can of course still seek Closure Orders in the Magistrates Court as they are not affected by the stay. These only last for 3 months however so the inability to apply for possession on the mandatory ground once a Closure Order is made is frustrating.
Issue of Notices
The guidance from Government at the beginning of the Covid-19 pandemic which remains in force was that Notices Seeking Possession should not be served unless there was “very good reason” for doing so - see guidance here.
It is perhaps clear that some rent arrears scenarios may not reach that threshold. However, most anti-social behaviour cases much more readily give rise to a “very good reason” to serve a Notice even during the pandemic.
Service of a Notice very clearly sets out to a tenant that the Landlord is considering taking legal proceedings based on the incidents reported to them and is a clear indication that matters may well progress to possession proceedings should they still be justified once the stay is ended.
Issue of proceedings where a Notice has already been served
All landlords are currently required to give 3 months notice on, for example, Notices Seeking Possession under the Coronavirus Act provisions. This continues until 30 September 2020.
What about notices that have already been served and have expired? What about Section 21 Notices served in relation to assured shorthold tenancies where the Notices themselves are only valid for 6 months and will, therefore, be lost before the stay on possession proceedings itself expires? We suggest this would also be a “very good reason” for issuing proceedings during the stay.
When the stay eventually lifts, many courts are confirming that cases will be listed in order of their age - those already issued and stayed will be prioritised over new claims sent after the stay to be issued. We suggest therefore that landlords start to prepare and issue ASB proceedings during this time so that they are effectively in a “queue”. However, in accordance with the government guidance mentioned above, all landlords should consider if they have a “very good reason” to issue a new possession claim during the stay. It is therefore very important to consider what that reason is and clearly record it on file to avoid challenge at a later date.
We can help you with temporary changes to your policies and procedures. Thought is required when considering which rent arrears cases, if any, to proceed with, for example.
Your local courts and their inevitable backlog
In order to enable the courts to eventually reopen and hold more face to face hearings and/or trials whilst still complying with the social distancing requirements, we understand that there are plans to establish “Nightingale Courts”. These would use, for instance, Civic Centres or other public buildings as temporary court buildings to help deal with the backlog. This will be interesting to watch and could be the way forward for some of our cases which are too complex to be dealt with on the telephone and will require a face to face trial.
If you are considering issuing Injunction proceedings it is also important to understand what service your local County Court is currently providing. Some courts are temporarily closed, some only have back-office staff present and others are open for limited face to face hearings. You can check the status of your local court here.
Do consider lobbying Parliament by writing to the Housing Minister, Christopher Pincher MP, to ask for ASB cases (specifically, those relying on grounds 14 or 7A if assured or grounds 2 or s84A if secure) to be removed from the extended stay. The Housing Minister can be contacted by email at firstname.lastname@example.org.
Please do contact us to discuss any of the above.
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