The Coronavirus Act 2020 has put a hold on any existing residential possession proceedings for a period of 90 days and extended the notice period required as a precursor for any new residential possession to three months (section 81 of the Act and Practice Direction 51Z) and removed the right of re-entry or forfeiture for business tenancies for non-payment of rent until (at present) the 30th June 2020 (section 82).
The Act has not removed the obligation on residential or business tenants to pay their rent but it has effectively removed the primary means open to a landlord to enforce that obligation, at least in the short term.
Equally, the threat or a fear of Covid-19 does not provide a ground for landlords to seek possession of property and any such actions are likely to amount to an unlawful eviction and harassment! Any tenant faced with this situation should seek professional advice as a matter of urgency (as well as contacting their local council and, if necessary, the police).
In addition the (temporary) closure of a large proportion of the Courts and the move to virtual or telephone hearings and the inevitable “triaging” of the work undertaken by the Courts which are open at a time of national crisis means that there are likely to be considerable (additional) delays to any proceedings once the situation returns to normal.
So, what should a landlord do when faced with a request for a “rent holiday” or when a tenant fails to pay the rent due? What should a tenant do when faced with immediate financial problems and/or uncertainties which mean they are unable to pay the rent?
There are no firm or clear answers at this stage and, to be honest, the situation is likely to remain changeable and uncertain for some time to come but, hopefully, a few pointers will assist in the short term and will serve to prepare the ground if a matter ends up going to court.
Firstly, and as indicated above, the Act does not remove the tenant’s obligation to pay rent, so the debt remains. In some circumstances the tenant, or indeed, the landlord may be entitled to assistance with the rent under one (or more) of the government schemes for individuals and businesses affected by Covid-19 or the implications of the “Stay Home” measures and they should seek (or be advised to seek) such assistance and to prioritise the payment of rent out of any such assistance, or make a reasonable offer for payment over time.
At the very least there should be some effective and frank, but constructive, communication between the parties so each knows where the other stands; you (whether landlord or tenant) should seek to open communications on a positive basis, providing suitable information to explain your situation and looking to reach a workable solution that is fair and workable for both sides (e.g. payment by instalments). If the other side agrees, a way forward may be found. If the other side unreasonably refuses to engage or rejects your approach out of hand, then that correspondence will be a useful piece of evidence to justify or defend your position if the matter ever goes to court.
Try to maintain momentum in the course of discussions, and to keep the communication flowing; you don’t want to be barraging the other party with pointless emails, but it’s useful to “touch base” regularly, if only so that potential concerns can be raised, before they become issues or problems!
Adopting a hard-nosed or aggressive stance will not encourage the other side to meet you halfway and may serve to end discussions before they have even started!
If your payment is going to be a few days late, give the other side warning (and then make the payment as promised). Similarly, if a payment doesn’t arrive when expected, it’s often more productive to make a soft enquiry as to whether there’s a problem rather than immediately threatening to take the Gladiator approach and “Unleash Hell!”.
Keep copies of all relevant communications – ensure there is a clear and comprehensive note of what discussions there have been; emails are ideal because they are easy to retain and produce as evidence – text messages are often deleted, the phone is lost or damaged and, in my experience, are often open to misinterpretation.
Similarly, if you have a “chat” with the other side, send an email confirming what’s been discussed and agreed – if they reply confirming the agreement, then all well and good (and there’s evidence about what has been agreed). If they don’t reply but later seek to deny any agreement, you’ve got the email to evidence the discussion and can point to the fact that they didn’t deny the agreement at the time!
Keep records of all monies due and paid – if payments cover rent or a service charge, or electricity bills, make sure you record when it was paid and what it relates to – I have had many cases where there have been disputes about whether payments between the parties related to the rent, insurance premium, service charge liabilities or other “personal arrangements” so that the court found it difficult to determine what the actual arrears were. If there’s a clear and comprehensive record made at the time (and which ties in with, for example, bank records) then the court is likely to be persuaded that it’s accurate!
As an aside; the new Pre-Action Protocol for residential tenancies (announced but yet to be implemented) will require the parties to engage and cooperate and to seek to avoid litigation and to consider payment plans or other solutions; complying with the various steps outlined above will demonstrate that you have “ticked the boxes” as far as the Protocol is concerned!
If you require advice or assistance in connection with a landlord and tenant dispute, please do not hesitate to contact email@example.com who will be able to guide you through the process of instructing a barrister under the Direct Access scheme.