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Claims that private landlords could pursue relating to COVID

The Coronavirus Act 2020 was passed by Parliament on 25 March to assist commercial tenants affected by coronavirus. It's designed to protect tenants in light of the coronavirus outbreak, postponing a landlord's ability (until 30 June 2020) to bring proceedings against a tenant to forfeit the lease where the tenant has missed rent payments. In the Act, the term "rent" is broadly drafted to mean any sums due under a lease, meaning it covers not only annual rent, but also any service charges, insurance or other relevant costs.

This outright ban on evictions prompted fear that many landlords would initiate possession cases against those with high rent arrears, potentially causing a flood of evictions. In a bid to reassure tenants, Robert Jenrick (the Secretary of State for Housing, Communities and Local Government) recently announced that the government is working closely with the Lord Chief Justice to ensure a "pre-action protocol" is implemented when the eviction ban is lifted. This would put a duty on the landlord to "act in good faith" and investigate other solutions to overcome rent arrear issues before eviction proceedings begin.

Where do landlords stand?

This new measure, outlined in the Coronavirus Act 2020, states that a landlord cannot force a tenant to vacate its premises for non-payment of rent during the relevant period (26 March until 30 June 2020). That said, the Act does not mean that the obligation to pay rent is waived or deferred.

Landlords can make claims concerning:

  • Charging interest on unpaid rent.
  • Drawing down on a rent deposit.
  • And any other remedy as provided for by the terms of the lease.

In any situation, landlords and tenants are expected to show that they have held conversations to agree to a suitable voluntary arrangement, as far as commercially reasonable.

What if I started proceedings before the Act was passed?

If landlords have had issues with tenants in rent arrears before the outbreak and consequent legislation, the tenant does not have to give up the property until the moratorium ends. This remains the case even if they have a good reason for continuing with proceedings. That said, landlords should check whether they are permitted to make a claim for lost rent under their insurance policies. It may also be possible for landlords to obtain a mortgage holiday from their lender. They can apply even if their tenants continue to pay their rent; however, landlords who take payment holidays are expected to pass on the relief to their tenants.

At the time of writing this article, housing courts will reopen on 25 June, meaning judges will have to determine thousands of pre-coronavirus cases, as well as a potentially higher number of new claims for possession, arising from the lockdown measures. As discussed, a "pre-action protocol" is likely to be drafted in the coming days or weeks, and here at Noble Solicitors, we will continue to keep you up to speed with these developments.

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