15:41 PM, 17th August 2020, About A year ago
On the 24th August, the courts will begin to hear cases related to the repossession of properties. This will come following a five-month suspension of such cases due to COVID-19.
This period has caused considerable challenges both for tenants and landlords. 94% of landlords rent property as an individual and have unlimited liability should their businesses fail. Many rely on their rental income for their livelihood, 44% entered the market to contribute to their pension and 39% report a gross non-rental income of less than £20,000 a year.
It is vital that as the ban on repossessions is lifted, unnecessary scaremongering is avoided, and policy makers and others focus on the facts It is wrong to assume that every tenant that has built rent arrears because of COVID-19 will automatically be at risk of eviction.
Independent polling for the National Residential Landlords Association by the research firm Dynata has found that just over 95% of private tenants are paying their rent or have made an arrangement with their landlord to pay a lower rent or defer payment during the pandemic. Less than a third of all those with arrears (2% of the entire survey sample) have been served with a possession notice.
Protections for Tenants Affected by COVID-19
When the courts start hearing claims for repossession again, a landlord with a claim already in progress will have to provide a ‘re-activation notice’ informing the court (and the tenant) in writing. If they don’t, the case will remain dormant.
Where these, or a new claim, include non-payment of rent, the landlord has to set out what knowledge they have about the tenant’s circumstances including the effect of the coronavirus pandemic on them and their dependents.
If this information is not forthcoming or is deemed inadequate by the courts, the judges will have powers to adjourn the case. Such a delay would mean that the landlord may continue to receive no rent from the tenant and so this will hit them in the pocket. This will encourage landlords to engage with their tenants prior to court action including seeking ways to sustain tenancies using the NRLA’s rent arrears management guidance.
The courts will prioritise cases involving extreme arrears built before the lockdown, anti-social behaviour and domestic violence. Those that are not a priority case will take longer, offering further time for alternative accommodation to be sought and providing further incentive for landlords to seek agreement outside of the courts.
Until 30th September, landlords renting property in England have to give tenants a minimum of three months’ notice of their intention to seek possession giving more time for payment arrangements to be agreed. In Wales it is six months for all cases except those related to anti-social behaviour.
The NRLA believes that to support the above the Government should develop a financial package, as has happened in Wales, to support tenants to pay off rent arrears built as a result of COVID-19.
Why Does the Repossessions Ban Need to be Lifted?
The repossessions ban has not been without consequence. Landlords have been unable to:
Chris Norris, Policy Director for the National Residential Landlords Association, said:
“Extending the ban on repossessions is not necessary. Our research clearly shows that the vast majority of landlords and tenants are working together constructively to sustain tenancies wherever possible.
“We need the courts to deal with cases where tenants are committing anti-social behaviour or where there are long-standing rent arrears that have nothing to do with the pandemic. Over the last five months landlords have been powerless to take any action against those who cause misery for fellow tenants and neighbours.”
Mrs R is a single parent who finds herself potentially unemployed as a new job she was about to start fell through due to the pandemic. She does not make any money on the property as it is in negative equity and has kept rent levels the same for a decade.
She submitted court papers to repossess a property because a tenant had not paid rent since around November last year and has convictions for harassing the neighbours. The repossessions ban means that the tenant continues to stay in the property, living without paying any rent despite him receiving furlough money.
Twickenham based landlord Ben Khosa has a few rental properties which he and his wife rent out. At the start of the pandemic Ben got in touch with all his tenants to check they were ok and to ask that they get in touch if they need support.
Some tenants did get in touch about additional help. For some Ben was able to defer the rent, or signpost them to support in applying for universal credit. He even did the shopping for a time for one of his vulnerable tenants.
When it comes to the end of the repossessions ban, Ben says he does have one tenant who is not paying the rent and has been ignoring all his attempts to reach out and offer support.
Ben says the arrears are building up, and that: “The tenant was in arrears prior to the Covid-19 outbreak but was paying instalments. He however stopped paying all rent in March altogether with no explanation despite our repeated requests to work together during this time.”
Sarah is a nurse in Accident and Emergency. A change in her personal circumstances last year meant she needed to move back into the rental property she owns in South Wales which is currently let. Living with her parents is out of the question –they are shielding due to the coronavirus.
She currently finds herself sofa surfing, facing a nervous wait for the three-month notice she served on her tenants in May to expire. She’s unsure if the tenants will comply with the notice as communication broke down when they stopped paying rent or answering Sarah’s calls to help them several months ago.
When Sarah let the tenants know about her intention to move back into the property herself and her reasons for doing so, she also offered to help them find somewhere else to live. “The tenants requested I serve a Section 21, so they could access social housing more easily”, she says.
In March and April, despite receiving Universal Credit payments, the tenants stopped paying rent altogether and ignored Sarah’s attempts to get in touch and come to an arrangement with the rent.
After several attempts of trying to get in touch, Sarah served Section 21 and Section 8 notice on her tenants. Sarah had never served notice before-and due to a slight error in the dates written on the Section 21 notice, it proved to be invalid. She says: “If the tenants don’t move out this month when the notice expires, or there’s an issue with the notice for whatever reason, I fear I will be waiting months to get my property back, especially if I have to re-serve notice and comply with the new six month rules.”
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