On 27 March 2020, the Courts reflected special dispensation by a Practice Direction 51Z (“the Direction”) in which possession proceedings are to be treated in an exceptional manner. Although the Coronavirus pandemic has caused widespread disruption and many issues have had to be addressed in an urgent manner, the Direction has potentially far reaching and potentially unfair consequences in relation to some possession proceedings, even during this period of uncertainty.
The Direction follows the introduction of the Coronavirus Act 2020 (“the Act”). The intention is clear, to protect those affected by the virus and who are in occupation of premises whether for business or as a home and to complement the primary legislation by preventing imminent evictions and delaying possession proceedings.
The Direction is now in force and applies to:
- All proceedings for possession brought under Part 55 of the Civil Procedure Rules; and
- All proceedings seeking to enforce an order for possession by a warrant or writ of possession.
The Direction ensures that, effective immediately, matters caught by 1 & 2 above are stayed for a period of (at least) 90 days and we summarise below the impact on commercial and residential proceedings.
Commercial
- Possession for forfeiture for non-payment of rent is delayed until (at least) 30 June 2020, Section 82 of the Act; and
- All Part 55 possession claims are adjourned until (at least) 30 June 2020.
The period is at least until 30 June, but the timeframe can be extended (with extensions made by statutory instrument rather than needing primary legislation).
Residential
- All possession hearings and enforcement matters are suspended for 90 days;
- In respect of Assured Shorthold Tenancies, whilst any valid notices served before the Direction came into force will not be invalidated, all new notices served with the intention to obtain possession (for example Section 8 and Section 21 Notices) will have an inbuilt delay of three months.
Summary
We understand that the Coronavirus pandemic has resulted in the need for emergency action including legislation and the Direction. However, the ramifications are great and whilst many tenants will be affected, so too will there be impact on landlords who face their own unprecedented financial pressures including an increased risk of tenant default and a moratorium on their ability to act by evicting a tenant who is not paying the rent. By way of example, the lack of any means test results in all tenants, including those with deep pockets or who may be cash-rich, being able to take advantage of the new law (albeit the law does not waive the financial obligations or compromise other possible actions by a landlord).
Furthermore, whilst we note claims for injunctive relief are not subject to the new stay period, we believe that this goes beyond what was intended, as the Direction covers all other possession proceedings which includes proceedings brought against trespassers. It is unclear whether there was a deliberate policy decision to stay such proceedings but should not a trespass claim (as with injunctive relief) be an exception otherwise squatters who may be a danger are given a 3-month reprieve? In our experience, trespass claims and injunctions often go hand in hand and so unless the Direction is amended or clarified, landlords may be unable to take any action against trespassers during the moratorium, which would include current enforcement of a warrant or writ of possession.
Lastly, landlords and tenants are advised to take advice on their position sooner rather than later. For example, although no conduct during the relevant period (other than an express written waiver) will be regarded as a landlord waiving their right to forfeit, as soon as the relevant period ends quick decisions will be required as to whether to forfeit or risk waiving the right by continuing to act as if the lease is still in place.
If you require advice on landlord and tenant issues, or any other type of dispute, whether out of the present Coronavirus or otherwise, then please get in touch with Robert Kay or Daniel Blake in our Dispute Resolution team
Please note – this article does not constitute legal advice.
