10:42 AM, 21st August 2020, About 3 years ago 9
As the ban on evictions comes to an end this month, letting agents are being warned to prepare for changes to the repossession process including a new pre-action protocol, a temporarily extended notice period and potentially longer waiting times for court hearings.
According to PayProp agents will play a crucial role in explaining the new system to landlords and helping them to manage rent arrears so the option of eviction remains a last resort.
The ban was originally set to last for three months, but was extended for a further two in June. From August 24, courts will start to hear rental property repossession cases again. The government is also creating temporary ‘Nightingale Courts’ to deal with the backlog of cases.
How will evictions be different?
The impact of COVID-19 and the subsequent evictions ban means that the process of repossessing a property through the courts will be somewhat different.
For example, if a landlord’s possession claim relates to rent arrears or non-payment of rent, they will need to provide information on the renter’s financial circumstances and the effect the pandemic has had on them.
If the information is not provided or is deemed inadequate by the courts, they will have the option of adjourning the case. Landlords issuing a notice for eviction will also be required to provide tenants with three months’ notice until September 30.
“Following a five-month hiatus, evicting a tenant through the courts may take longer than usual once the ban is lifted,” says Neil Cobbold, Chief Sales Officer at PayProp.
“The government’s new measures suggest that it wants to limit evictions pursued solely due to COVID-19 arrears. It has also been made clear that the courts will prioritise cases of extreme arrears accrued before lockdown, and cases of anti-social behaviour and domestic violence.”
“It’s vital that agencies communicate the changing situation to landlords so they can assess their options carefully as the ban is lifted,” he says.
Will COVID-19 fuel an evictions boom?
There has been speculation from some politicians and housing groups that lifting the ban on evictions will lead to a spike in COVID-19-related repossessions.
However, research from the National Residential Landlords Association (NRLA) suggests this may not be the case. A survey of more than 2,000 tenants found that over 95% are paying rent in full or have agreed with their landlord to reduce or defer payments.
The research also found that less than a third of renters in arrears, equal to around 2% of the entire sample, have been served with an eviction notice.
“The majority of tenants have been able to pay rent in full during the pandemic and those that haven’t are likely to have made alternative arrangements with their landlord,” says Cobbold.
“Although there will be many new claims and a significant backlog of eviction cases to be heard when the ban ends, the number related to COVID-19 arrears may not be as high as anticipated.”
Agents can help landlords to manage arrears effectively
Cobbold adds that unless landlords are affected by a significant long-term buildup of arrears, or instances of domestic violence and anti-social behaviour, they should only consider legal action as a last resort.
“If landlords want to deal with tenants who have recently fallen into arrears, there are more effective ways than going through the courts. Letting agents can help them to pursue these options,” he says.
“Agencies can help landlords and tenants to manage rent arrears through affordable repayment plans, digitally recording all payments and automating arrears chasing.”
“This also allows agents to maintain a clear paper trail in the event that the landlord does want to pursue an eviction in the future,” he explains.
“Ultimately, strong and effective communication with tenants can help to reduce the impact of rent arrears before they become a serious issue.”
“Agents that take this approach can help landlords to manage arrears and recoup unpaid rent while sustaining the tenancy instead of pursuing an eviction through a long and potentially expensive court process,” concludes Cobbold.