Coronavirus Act: Extension to freeze on landlords seeking property possession

The Government has extended its freeze on landlords seeking possession of commercial or residential property. Abi Lutey, Partner and Head of Commercial Disputes at Coodes Solicitors, comments on a temporary rule, which updates legislation introduced in the Coronavirus Act 2020.

I have previously written about Section 82 of the Coronavirus Act 2020, which introduced restrictions on landlords seeking to evict tenants. I have also outlined changes to the legislation and the implications for commercial property landlords and tenants.

Section 82 introduced a freeze – known in legal terms as a moratorium – on all property possession claims, initially for the period 26 March to 30 June 2020. This emergency legislation was designed to protect business and individual tenants whose income or cashflow was affected by the Covid-19 lockdown, leaving them with difficulties in meeting rent payments.

What does the extension mean?

On the request of the Lord Chancellor, the Civil Procedure Rule Committee has extended the ban on eviction proceedings by a further two months.

The moratorium has therefore now been extended by the Housing Secretary to 23 August 2020. This change applies to commercial and residential tenancies.

The two-month extension will come into force on 25 June, ensuring there is no gap between the existing ban and the extension.

Landlords should also be aware that new emergency legislation has been put in place to deal with these matters. From 25 June 2020 a temporary rule, the Civil Procedure 55.29, will replace the previous Practice Direction 51Z.

What does the new rule mean for landlords and tenants?

The new rule has broadly the same implications as the previous legislation for landlords and tenants. It is designed to provide commercial and residential property tenants with continued respite from the threat of proceedings for delays in paying rent. However, it is important to note that it does not provide for a rent-free period.

Rent will continue to be due and owing and failure to pay it during the period covered by this legislation does not mean a landlord cannot recover it by other means.

The temporary rule deals with the following:

• All possession claims up to 23 August 2020
• Claims prior to 25 June 2020, and those brought to the courts between 25 June and 22 August 2020

The extension does not cover:

• Proceedings in the interim possession procedure, which deal with tenants squatting at a property
• Applications for case management directions to progress a case where the parties have agreed them in advance
• Claims for an injunction
• Claims against trespassers, where those trespassers are unknown

The rule goes on to say that a landlord can issue an eviction claim. However, landlords should be aware that proceedings are likely to be put on hold under the temporary ruling.

During these challenging and uncertain times, our advice remains the same. To avoid disputes, landlord and tenants should maintain good lines of communication and raise any concerns at the earliest opportunity.

For more information or advice on these issues, please contact Abi Lutey at Coodes Solicitors on 01872 246230 or email cde@coodes.co.uk.