Property litigation specialist lawyer at Frettens, Will Bartley, provides an update on how residential lettings have been impacted by the pandemic; what this has meant for landlords and tenants; and how this will evolve over the next few months.
Government legislation, shielding, self-isolating, furlough etc. These are all terms that have become part of daily life since early 2020. Their impact can be felt by both landlords and tenants, as it has affected both greatly.
How has the pandemic impacted tenants?
Many tenants, especially those who have seen a reduction of income through either furloughed salaries or loss of business earnings, have been extremely worried about meeting their rental payment obligations.
This has resulted in an increase in tenant debt, rent arrears and anxiety amongst many as to their housing situation.
Government legislation has looked to assist tenants in this regard by placing a temporary ban on evictions in the summer of 2020, extending both Section 21 and Section 8 Notice periods substantially to afford tenants more time to find alternative accommodation or additional time to try and pay off accrued rent arrears.
The new Breathing Space scheme was also introduced to allow the most vulnerable tenants the opportunity to seek debt relief assistance without the imminent threat of eviction.
How has the pandemic impacted landlords?
For landlords, the pandemic has left many with a severe reduction in their rental income, many of whom would not be subject to furlough payments to assist with this, and therefore numerous landlords have lost their only source of income for over a year.
Whilst the government has encouraged landlords to mediate with their tenants by way of payment plans, rent reductions and rent waivers, many landlords are now in severe financial difficulties themselves due to the accrued rent arrears of tenants across the country.
We have represented a multitude of landlords over the past 12 months in possession proceedings whose tenants have stopped paying rent entirely for more than a year. We have even seen some tenants fail to pay any rent since the day they moved in.
Can I evict my tenant and how long will this take?
The answer to this question has changed many times over the past 18 months due to the varying amount of notice that landlords have been required to give, along with various bans on both bringing proceedings and enforcing them with the Bailiffs.
The situation as of August 1st 2021 is as follows:
What are the notice periods for Section 21 eviction?
For a Section 21 Notice, a landlord must provide 4 months’ notice to their tenants. It is hoped that by October 2021 the Notice period will be reduced to 2 months, which is what it was before the pandemic, however it is yet to be seen whether this change will be enforced.
At the expiry of the notice you can commence possession proceedings at the County Court and an undefended possession Order should be granted if the application is successful within approximately 4 weeks of making it.
What are the notice periods for Section 8 eviction?
For a Section 8 rent arrears Notice, a landlord must provide 4 weeks’ notice to their tenants if arrears are equal or more than 4 months; or 2 months’ notice if the arrears are less than 4 months.
For Section 8 possession proceedings, there will always be a Hearing at the County Court, and we estimate that the Hearing will take place approximately 6 weeks after issuing the proceedings (this is variable across the country and is subject to change depending on individual County Court capacity).
My tenant is in rent arrears and wants to try and pay them off gradually, do I have to agree or can I take them to Court?
The government have tried to encourage landlords and tenants to mediate between them and try to reach a compromise, with rent payment plans being agreed by many.
This can keep tenants in their homes, whilst slowly repaying their landlords their accrued debt. This also avoids the costs and distress of court proceedings.
However, as the country starts getting back to normal, many landlords are faced with many months of unpaid rent and a tenant that will not reply to them.
If you find yourself in this situation, we recommend contacting us for specialist advice without delay, as unfortunately these matters seem to escalate leaving landlords severely out of pocket if they are left for too long, with little prospect of rent recovery.
How will things change over the next 12 months?
It is hoped that the furlough scheme, mass isolation and ongoing rent arrears will be a thing of the past with the successful vaccine roll out. It is therefore expected that there will be a surge in evictions over the next few months of tenants who have not paid their rent during the pandemic.
It is also hoped that eviction notice periods will gradually return to their pre-pandemic levels. It is clear though that scars have been left for both landlords and tenants during this period.
Landlords have become increasingly wary as to who they will let their properties to, and tenants will be more concerned about rent payment flexibility than ever.
How can legal professionals help?
Evicting a tenant is never a pleasant experience and this has never been more applicable than during the pandemic. However, we do recommend that you seek specialist legal advice if this is something that you are contemplating.
Given the extended notice periods, the penalties and delays for incorrectly serving eviction notices have never been higher. We offer a full service to landlords looking to regain possession of their property, including:
- Ensuring that all of your paperwork and required prescribed tenancy documents are in place before serving an eviction Notice;
- Drafting and serving the eviction notice on your tenants;
- Drafting and issuing Court proceedings on your behalf;
- Attending and representing you at the eviction Hearing at the local County Court;
- Instructing the Bailiffs to enforce the possession Order and assist with the collection of rent arrears.