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By Paul Dudley

Apr 2nd, 2020

Important changes to residential and business tenancies during the Coronovirus outbreak

Last week the Government brought in emergency legislation in the form of the Coronavirus Act. It covers a host of measures and provides additional protection for residential and business tenants who may well be having difficulty paying their rent. Many people are struggling financially due to the economic downturn caused by the COVID-19 pandemic.  

Residential tenancies


From 26 March 2020 until 30 September 2020 landlords will need to give tenants three months’ notice (instead of two) before issuing court proceedings to evict them for not paying rent or for any other reason. Only after the three months’ notice period has expired can court proceedings be issued and a judge grant an eviction order if the tenant has not left the property. 


This is because the Government recently brought in emergency legislation in the form of the Coronavirus Act, which provides protection for residential and business tenants who may well be having difficulty paying their rent. Many people are struggling financially due to the economic downturn caused by the COVID-19 pandemic.  


The act covers most accommodation in the private and social rented sectors and applies to all grounds of eviction. The Governments’ hopes that this will give time for the lockdown restrictions currently in place to have been lifted, allowing people to return to work and resuming paying their rent. 
In addition, the courts service announced that from  27 March 2020 all ongoing housing possession actions will be suspended for 90 days. This means that cases currently in the court system or any about to go into it cannot progress to the stage where someone could be evicted until July 2020 at the earliest.     


Landlords with buy to let mortgages facing financial difficulties due to tenants not paying their rent should speak to their mortgage lender. Mortgage lenders have agreed to offer mortgage payment holidays of up to three months where this is needed due to Coronavirus related hardship. Where a mortgage holiday is offered the sum owed remains and the mortgage will continue to accrue interest during the payment holiday period.

Commercial tenancies


The Coronavirus lockdown has had a seismic impact on the UK economy and the ability of many business to operate. Because of this the Government has also introduced changes to protect business tenants from re-entry or forfeiture if they fail to pay their rent. 


The key changes are:


1.    From 26 March to 30 June 2020 landlords will no longer be able to enforce their right of re-entry or forfeiture, by action or otherwise, if a tenant fails to pay rent. 


2.    Where proceedings, for non-payment of rent, commenced prior to 26 March 2020 and the court grants an order for re-entry or forfeiture, it must ensure that the tenant does not have to give up the property before 30 June 2020. 


3.    This also applies to court orders already granted, where re-entry or forfeiture is triggered if the tenant fails to meet a requirement that falls due between 26 March and 30 June 2020 and the tenant applies to vary the order. 


4.    During this period any conduct by a landlord or on their behalf will not be regarded as waiving their right of re-entry or forfeiture for non-payment of rent, unless they do so expressly in writing.

  
If you are a landlord or tenant and require legal advice please call Richard Tomlinson, a partner in our dispute resolution team on 01522 508 854.