Further frustrations for Landlords seeking to evict or recover arrears
November 24, 2020
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On 17th November 2020 the Public Health (Coronavirus) (Protection from Eviction and taking control of Goods) (England) Regulations 2020 came into force. Essentially this puts a stop to the enforcement of possession orders and bailiffs recovery of good from domestic premises in England until after 11 January 2021.
The run up to these regulations being issued is quite interesting and reflective of the Government’s overall approach to what is becoming an increasingly difficult area of law.
When the Courts re-opened in September everyone expected them to start processing all aspects of the stalled Court possession processes, from commencement of proceedings right through to enforcement of orders. It was never expected that there would be a landslide of evictions, rather that it would take some time for the system to limber up and bring itself back up to speed. However, that has not happened. Reactivation notices were served promptly but little progress appears to have been made on any claims and the enforcement of orders that parties have in hand have been frustrated.
Prior to the current national lockdown, in areas subject to Tier 2 and 3 it emerged that there was to be no enforcement of warrants or writs of possession. One might expect such action to be as a result of legislation. However, the restrictions were based on internal HMCTS policy communicated through a letter sent to the High Court Enforcement Officers Association by the Lord Chancellor. There have been questions about the lawfulness of this approach as it is not generally open to Bailiffs or HCEOs to simply decline to enforce warrants and writs, even if the Lord Chancellor asks them to do so. Enforcement is part of a Bailiff’s duties and there is, in fact, a power to complain to the County Court, in the County Courts Act, about losses resulting from Bailiffs not enforcing warrants. The mode by which these restrictions on enforcement has come about is now the subject of a Judicial Review process. As national lockdown took hold, the restriction encompassed all of England.
The suggested justification seemed to be that regulations prevent Bailiffs evicting as it would require two households to be in the same property. However, the lockdown regulations contain exemptions for persons doing their jobs and for those fulfilling a legal obligation. The approach did seem to fly in the face of new structures created around the lifting of the stay on possession claims.
There was a compromise made between all stakeholders around proceeding with evictions in a controlled manner, targeting initially those situations in which tenants were responsible for significant and unjustified rent arrears and anti-social behaviour. It appears a little pointless to have a priority system if little is moving on through the Court and the process was by-passed by blanket arrangements barring evictions being enforced.
Practically, many landlords were pinning their hopes on the short gap between the end of the current lockdown on 2ndDecember and the start of the Christmas stay on 11th December, during which some Landlords may have been hoping for an eviction. This gap is now firmly closed.
The most recent in a long line of regulations ban any person from attending premises to execute a writ or warrant of possession in England. This expires automatically on 11 January 2021. This means that for most Landlords, even if they are able to secure a possession order they cannot make use of it until after that date. Landlords can still request a date for enforcement, and have it put in the diary for after that date, so they can still prepare the warrant or writ to move it on as quickly as possible when the regulations lift. However, by that time they will have been deprived of their property for a further period, during which times they may not be receiving rent and damage and/or anti-social behaviour may continue.
It is worth noting that there are some very limited exceptions under the new Regulations. Eviction of squatters can go ahead where there is a Court Order for possession citing anti-social behaviour or false references. It is also possible to go ahead if an order was made in respect of rent arrears grounds and there are more than 9 months’ rent arrears at the date the Court Order was made. However, it is important to note that this only includes rent arrears that accrued prior to the 23 March 2020. Therefore, this only really applies to tenants who stopped paying rent back in June 2019 and have paid nothing between then and March 2020.
There are no exceptions in respect of tenancies which fall outside the Housing Act 1988, residential licences, student tenancies or holiday lets, which are all now exempt from eviction until after 11th January 2021. This may cause particular concern for some universities.
The regulations also prevent any form of execution against goods, so it would be difficult for a Landlord to enforce against the debt in that way during this time. So enforcement of debt claims against tenants during this time by Bailiffs seizing goods cannot be progressed.
This legislation appears to have been rushed, as with other legislation around the pandemic crisis. A sad reflection of the times in which we find ourselves. It appears more reactive than evidence of any form of overall strategic thinking about how to deal with the backlog or balance stakeholders interests going forwards at this time. One can only hope a more pragmatic way forward will reveal itself in the new year.
It is recognised that, naturally, evictions create hardship for those being evicted, probably more so right now. However, leaving tenants in huge arrears in place also creates hardship and some cannot access alternative accommodation until a Court Order is issued. For tenants it can also create a significant debt that will follow them. For neighbours it may mean they are being subjected to anti-social behaviour, with no hope of relief in the near future. For Landlords who have their own fixed outgoings and liabilities to meet from the rental income that should be paid to them and have been given no support throughout the crisis, the impact can be catastrophic. Ultimately, this will lead to an inability to meet obligations to third party lenders and investors, causing far reaching consequences.
For the time being, the advice to tenants is to adhere to the terms of their tenancies and, where they can pay, to continue to pay rent. It is crucial to note that the legislation simply delays enforcement against tenants rather than excusing the need to make payments or adhere to the covenants in their lease. Ultimately, the liabilities need to be met and the lease covenants will be enforceable in the long term. Parties who can meet their obligations should consider carefully the full longer term consequences of choosing not to pay, which may include interest, future litigation or forfeiture down the line. Non-payment of rent should, as always, only be considered as a last resort where there is no other option.
For Landlords, the advice remains to take such steps as a possible at this time so that, as soon as the restrictions are lifted, matters can be progressed as promptly as the Court system will allow. It is going to take some time for the backlog to clear. As such, the sooner that papers can be issued with the Court and entered into that process, the sooner they should, in theory, come through it.
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