The Coronavirus Bill - What Landlords and Tenants Need to Know
- AuthorSarah Davies
The Government has published the Coronavirus Bill 2019-21, outlining new measures coming into force for both residential and commercial landlords and tenants, in these unusual times.
The effect of the measures for residential tenancies appears to be less stringent than initially anticipated following the Housing Secretary’s announcements.
The amendments set out in the Bill will operate to extend the notice period landlords must give tenants, from two months to three months. Any landlords seeking to serve a Section 21 Notice under the Housing Act 1988 will need to specify a three month notice period before proceedings can be issued. These measures will come into force the day after the Bill is passed, which could be as early as Friday, 27 March 2020.
The Bill states that proceedings for an order for a landlord to obtain possession of a dwelling from a tenant may not be started unless:
(a) The landlord has given the tenant a notice of intention to commence possession proceedings;
(b) The notice period is one of at least three months; and
(c) The proceedings are started on or after the intended date for commencing proceedings
Proceedings may be started without compliance if the Court considers it just and equitable to dispense with the requirement to comply.
As currently drafted, the measures contained in the Bill do not appear to be retrospective and, as such, it may be possible for landlords to serve the relevant notices now, prior to the Bill coming into force, thereby avoiding the extended notice period proposed by this Bill.
If a landlord has already served an appropriately-drafted statutory notice or does so prior to the Bill coming into force, it may still be possible for landlords to begin proceedings at the expiry of the notice. This is, however, provided County Courts continue to operate during the Coronavirus outbreak.
Landlords should be aware that the Bill is still being debated and further amendments may be introduced. The measures proposed in the Bill still require Royal Assent before they will come into force.
The measures proposed for business tenancies expressly deny the right of re-entry or forfeiture for non-payment of rent in any way, from the day on which the Bill comes into force until 30 June 2020. The rent will still be due, but commercial landlords will be prevented from ending the lease during this period.
Commercial landlords will also be prevented from evicting tenants until the 30 June 2020, even if forfeiture proceedings for rent arrears have already been commenced.
Under the measures proposed in the Bill, any failure by a commercial tenant to pay rent during the relevant period (due to end on 30 June 2020) will not be treated as a persistent delay in the payment of rent – which is often relied upon by commercial landlords as a ground for opposing a new lease. Depending on the terms of the lease, ‘rent’ could encompass payments due with regard to insurance, service charge payments and interest.
There is, however, some good news for landlords. The Bill provides that no conduct by or on behalf of a landlord during the relevant period, other than giving an express waiver in writing, is to be regarded as waiving a right of re-entry or forfeiture, under a relevant business tenancy, for non-payment of rent. Commercial landlords should also be aware that the measures proposed in the Bill would not prevent the enforcement of other remedies or a commercial landlord’s right to claim any late payment interest provided for in the lease.
Commercial landlords may still be able to pursue forfeiture proceedings for other breaches of a covenant after they have served a section 146 notice. However, the ultimate sanction of forfeiting a lease will, it seems, be temporarily prevented.
Commercial landlords should be aware that the government may decide to extend the relevant period beyond the 30 June 2020. We will be continuing to closely monitor the situation and will keep you apprised of further developments.
Landlords and tenants will no doubt be concerned by these exceptional measures and will want to know what avenues remain open to them. At JCP, our Property Dispute Solicitors are on hand to provide tailored advice to guide landlords and tenants through this challenging time.
Sarah Davies, JCP Director and Head of Property Litigation, has developed into one of the most effective specialists in her field of work. Sarah advises on a broad spectrum of property matters, with expertise in property advice and property dispute resolution. Please contact Sarah, for further support on 01792 529 617 or email firstname.lastname@example.org.
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