A party seeking to restrict another's commercial activities must consider whether such terms are normal in similar, factual and contractual circumstances.
Late last night (26 March) the Ministry of Housing, Communities and Local Government (MHCLG) issued a guidance note regarding Court Service.
UPDATE – since this ebriefing was originally published the new Practice Direction has been circulated by the Court Service. It confirms that all possession proceedings already issued at Court will automatically be subject to a 90-day stay, irrespective of the reasons why possession is sought in those proceedings. The effect of the stay will mean that no further steps in those proceedings can be taken until at least 25 June 2020. This date will no doubt be revisited should the current Covid-19 situation be ongoing at that time. The remainder of this ebriefing should be read in light of this further update. The new guidance and practice direction can be found here.
The notice confirms that as of today, 27 March, “the Court Service will suspend all ongoing housing action”. It seeks to clarify this statement by adding “neither cases currently in the or any about to go in the system can progress to the stage where someone could be evicted”. The suspension will initially last for 90 days but with an option to extend this period as necessary. What does this mean for landlords?
Rewind to 18 March when the MHCLG published a press release with the bold headline “complete ban on evictions and additional protection for renters”. No detail behind this headline was given and there were other press releases that muddied the waters further leading to speculation and confusion online – was it actually a total ban on all evictions? Was it just in relation to rent arrears caused by covid-19? What about evictions where there is serious, ongoing anti-social behaviour (ASB)? What about abandoned properties that are already empty?
It was assumed that the emergency legislation, now called the Coronavirus Act 2020, which came into force on 26 March, would clarify matters. However, the first draft of the Bill was silent on possession proceedings completely. Once amended, the Act added the now-familiar requirement on landlords to give at least three months’ notice to tenants in any notice served (see below for more information). It is clear that Notices already served before the Act coming into force remained valid as served. No mention was made of a ban on evictions at all.
The MHCLG announcement made late on 26 March by the MHCLG now confirms a 90-day suspension on possession proceedings. Do note that this is NOT found in the final Coronavirus Act. Instead, the MHCLG state that the Master of the Rolls (the most senior civil Judge) and the Lord Chancellor have made this administrative decision to suspend all possession proceedings by way of a direction to the courts.
We understand from a hearing this morning that a new Practice Direction (part of the county court rules) is about to be issued requiring a 90-day stay to be imposed on all possession proceedings already underway. A stay effectively means that no further steps can be taken in those particular proceedings so even those matters that are already underway, evictions about to proceed or hearings already fixed as telephone hearings will come to a halt.
We need to wait to see what that new Practice Direction states. It isn’t yet available and the Judge in our hearing this morning had not yet seen it – he was aware as a result of Judicial guidance that had arrived overnight.
This may help to bring some much-needed clarity to the situation. Over the last fortnight, we have been seeing differing approaches taken by the numerous County Courts nationally that we deal with. These have included
- Some courts cancelling all evictions for health reasons
- Other courts have been carrying out ASB and abandoned property evictions only, and
- Some have simply been carrying on as if nothing is happening!
The county courts have basically been taking local decisions and implementing local practice as they see fit.
So – in the absence of the Practice Direction, does this announcement bring that vitally needed clarity? Sadly not. The press release states that “neither cases currently in the or any about to go in the system can progress to the stage where someone could be evicted”. This statement could be read in two ways:
- No new possession proceedings can be started and, those proceedings already at Court, cannot be progressed any further, effectively staying them until the current situation has passed;
Or, in the alternative
- Possession proceedings can be pursued up until the point of a Possession Order being obtained but no eviction can be carried out for at least 90 days.
In some situations, neither option will be particularly attractive. Neighbours continuing to suffer serious ASB from the tenant next door are of particular concern during a period of home isolation for all.
If a blanket stay on all possession proceedings is introduced today as expected, then Landlords need to be prepared for:
- Increased rent arrears over the next three months. Notices Seeking Possession (NSPs) (new prescribed form now in force as well to be added to your system – see below) giving three months notice can be served but there may be little point paying court fees to issue proceedings on NSPs that have already expired, as the claim will just be issued then immediately stayed;
- Different and more limited arrangements to tackle ASB. The obvious option is to make injunction applications to tackle these issues. However, if an Injunction is obtained, how is it enforced if breached? For those Injunctions with Powers of Arrest attached, the ordinary way in which the police arrest the Defendant and produce them to court for a hearing within 24 hours would be difficult due to the covid-19 social distancing measures. Until the courts are better able to hear committal hearings by phone or skype, Injunctions may simply become a piece of paper not capable of being enforced.
- Continued deterioration of properties where condition of Property is the ground for possession. This, in turn, could have a longer-term impact on the level of repairs needed at the Property and a worse impact on neighbours;
We hope that in the coming weeks that both Government and the Court Service can provide more clarity on the many questions that are arising for both landlords and court users. The steps implemented have of course been implemented as a matter of urgency as a response to the current situation. It is not yet known if any amendment to these provisions particularly to allow possession proceedings to tackle ASB might be possible.
We will update this e-briefing as and when the Practice Direction and any further guidance is issued.
Update to s21 Notices and NSPs to be Served
The Coronavirus Act now requires a three-month notice period to be given on all notices served under the Housing Act 1985, the Housing Act 1988 and required by the Protection from Eviction Act 1977 (e.g. an NTQ). This includes
- NSPs (irrespective of the Grounds relied upon)
- s21 Notices
- Notices to Quit
- Notices relating to flexible tenancies etc.
It affects any notice served under these Acts. All notices served from 26 March 2020 must be in the new format and give the new notice period. The new format assured tenancy forms can be found here. The new format secure tenancy forms can be found here.
Please note that the three-month notice period does not apply to licenses, contractual tenancies or tenancies granted in the course of someone’s employment. Existing Notices already served before 26 March 2020 remain valid as served.
We are preparing word versions of the updated assured NSP and s21 Notice prescribed forms. Please email Nicola.email@example.com should you require copies of these forms for use during this time.
To discuss further, do not hesitate to contact Alex Loxton or your usual contact in our housing litigation team who will be happy to help.
This ebriefing considers the Government’s proposals for challenges, as set out in Chapter 7 of the Green Paper entitled 'Fast and fair challenges'.
We’re delighted to announce that we have been ranked in the top five national legal advisers in the Top 3000 Charities 2021 directory.
The Law Commission published its report on Technical Issues in Charity Law in September 2017 following a public consultation.
Changing charitable purposes and amending governing documents.
Charity registration financial thresholds.
One of the stated aims of the Green Paper is “to deliver the best commercial outcomes with the least burden on the public sector".
The proposals concerning dynamic purchasing systems (DPS) and framework agreements are the most disappointing aspect of the Green Paper.
Family team partner, Elizabeth Wyatt, is delighted to congratulate Kadie Bennett for attaining Resolution Specialist Accreditation in both children law - private and complex financial remedy matters.
To receive invitations to our events, as well as information and articles on legal issues and sector developments that are of interest to you, please sign up to Newsroom.