It’s been another challenging week for agents, landlords and just about everyone in the lettings industry.
Late on Wednesday, the government’s emergency legislation passed into law, when the royal assent was given to the Coronavirus Act 2020.
Yet Schedule 29 – a late amendment published at the beginning of the week – continues to cause controversy, both for what it does and what does not state.
This piece of legislation does not offer any form of rent holiday or amnesty for tenants who cannot pay their rent (for whatever reason). Payment obligations under existing tenancy agreements are not affected, and rent continues to be payable on the due date come rain or shine - for better… or for worse.
What the Act provides is that all notices served between now and the end of September have to expire after 3 months. This is different to the usual 2 months that usually applies to a Section 21 notice, and certainly not the 2 week period that goes with a Section 8 notice for, say, rent arrears.
In practice, this means the government is giving tenants greater leeway when it comes to paying their rent, or in seeking alternative accommodation. It will be significantly longer before a landlord can take action to recover a property through the courts.
To many it might suggest that we are pushing an arrears problem further down the track, to a point in time when arguably a tenant might be worse equipped to sort out their finances, when faced with the inevitability of a much larger debt.
For those struggling with their rent in the new economic reality of a covid world, they may have little practical choice. Rightly or wrongly, we live in a society where many exist in the unsecure realms of the gig economy, and where benefits do not reflect true market rents.
Landlords need to show compassion to those who are genuinely struggling, but also encourage those same individuals to pay what they can, when they can. Even a reduced payment each month might make the longer term problem more manageable.
Some landlords will inevitably be forced to turn to the courts after the new “three month” notice expires, or in reliance on a notice served before Thursday. Here new challenges await.
Whilst the Court Service has suggested a halt to the issuing of any new possession cases for the next three months, no such limitation appears in the new legislation. At the moment therefore, courts across the nation are very much “doing their own thing”.
From what we can tell sitting at our laptops in our quarantined surroundings, most courts are not processing new claims – more we suspect from a lack of staff, and the need to divert resources to more urgent tasks.
The short-term prospect for any landlord with bills to pay is not good, but these are extraordinary times and the government has rightly put in place extraordinary measures. Doubtless more will follow, and we are here to update you when it does.
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