EVICTIONS: Decision on Pre-Action Protocols imminent as Minister flags up ‘need for speed’

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As the end of the evictions ban looms, housing minister Luke Hall tells MPs that he realises a decision on how to force landlords to work with financially struggling tenants rather than evict them is needed soon.

Housing minister Luke Hall has confirmed that the government will soon publish its plans for Pre-Action Protocols, which will require landlords to work with their tenants and agree payment plans together, rather than going to court.

This significant change to the evictions process is designed to prevent a tsunami of repossession proceedings hitting the courts after they reopen to eviction hearings, at the earliest in early June.

Hall told member of the parliamentary select committee for the Ministry of Housing, Communities and Local Government that he and his fellow ministers were considering two options.

One is to use existing civil procedures and the other for the government to enact a change to the 1988 Housing Act and make it law. There are already dozen of Pre-Action Protocols covering a variety of industries including residential mortgages and travel and personal injury claims.

Clive Betts (pictured), who chaired the Zoom virtual meeting, asked Hall (also pictured) whether he realised that a civil procedure approach would simply persuade landlords unwilling to enter negotiations with tenants to move directly to a Section 21 or Section 8 eviction.

Penalised

Hall replied that landlords who did this might not face a financial penalty for not playing the game, as they would if it became a legal requirement, but would instead be penalised by magistrates during the ensuing process for their lack of cooperation.

The minister revealed that although the government’s Pre-Action Protocol plans were still being scoped out and tested, there was a ‘need for speed’ and that his civil servants were already consulting on the plans with industry representatives, and the judiciary.

“Our plans for Pre-Action Protocols reflect how serious we are about landlords and tenants coming together and working out a sensible plan to prevent an eviction,” said Hall.

Last week Hall’s boss, the Secretary of State for MHCLG, told the same committee that he may consider extending the evictions ban into July and beyond.

Watch the session in full.

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Boris goes quiet on when home moves can restart as he launches three-stage plan

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After ministers hinted last week that viewings could restart if those involved adhered to strict safety rules, the government has now backtracked and makes no mention of moving home in its 60-page plan published today.

The government has this afternoon published its three-step plan to lift the Coronavirus lockdown which includes allowing golf and tennis to played and for some workers to return to work, from tomorrow onwards.

But landlords hoping the rental market could now return to a semblance of normality will be disappointed by Boris Johnson’s 60-page document which makes no mention of when people will be allowed to move home again or even when face-to-face viewings will be permitted.

This means tenants and landlords face a 20-day wait until June 1^st when, assuming the rate of infection and other indicators show Coronavirus coming under control, the next stage of the lockdown release will happen.

The current guidance is that no one should move home unless contractually obliged to do so, their home is not fit human habitation or they are a student moving back home after their university closed its campus.

Boris’s document is particularly disappointing because the government had, last week, given strong signals to several property industry groups that the rental market may be allowed to enjoy a partial revival.

This had been promised as long as landlords, tenants and letting agents followed strict rules and wore personal protective equipment when doing viewings, appraisals and both check-ins and outs as well as inventories.

Instead, the new plan reveals that it will be another 50+ days until more face-to-face businesses such as hairdressers and beauty salons are allowed to open on July 3rd, suggesting strongly that viewings and house moves will be given the green light at the same time.

Read the plan in full.

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Retail rent calculations must undergo shake-up after COVID-19, says Colliers

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Major property consultancy says landlords and retailers must move to a system where they share information on footfall and turnover so that rents to be calculated more fairly.

The retail property market must
move to a model where rent rises are based on footfall and turnover not
automatic increases, a leading property firm has said, if the sector is to survive
after the Coronavirus crisis.

This is backed up by new
research that shows 40% of landlords are now more likely to consider these
factors when setting a rent.

But approximately two-thirds
of landlords don’t have access to this data which would help them measure who’s
visiting their properties, where these shoppers come from, or the purpose of
their visit, according to Colliers International.

It believes landlords need
to share this information with retailers in return for sales data so both sides
can benefit – but another 40% of those surveyed said they wouldn’t want to do that.

Matthew Thompson, head of retail
strategy, says: “This unwillingness to share data between stakeholders needs to
be resolved if a new model for retail property leasing is to emerge from the
devastation of the pandemic.”

Colliers surveyed the
owners of more than 120m sq ft of UK retail property and found that 79% believe
the COVID-19 pandemic will bring permanent changes to how retail property is
leased. Thompson adds:

“The insights from this
survey demonstrate that the relationship between the landlords and occupiers of
retail property is changing irrevocably.

“The challenge now for both
sides of the equation is who can respond in a way that can sustain a
contractual relationship which is viable for all parties.

“It’s clear that we’re
going to move away from the old model of how shops have been rented out. In an
environment that can integrate masses of relevant datasets, more precision can
be brought to the pricing process and this will benefit both landlords and
retailers.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Retail rent calculations must undergo shake-up after COVID-19, says Colliers | LandlordZONE.

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BREAKING: Challenge to government’s evictions ban fails in Court of Appeal

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Three judges dismiss attempt to restart repossessions within the court system which, via several technical points, had argued that the ban was illegal on procedural grounds.

A judgement from the Court of Appeal today has dismissed a challenge to the government’s ‘evictions ban’ in the courts, confirming that the measure is lawful.

Many landlords trapped by the estimated 20,000 repossession cases stuck in the courts since the suspension of repossession cases in the courts were pinning their hopes on the Court of Appeal case going in their favour.

But the three judges involved have handed down a judgement on Arkin vs Marshall which tackled the government’s Practice Direction 51Z, which officially suspended possession cases within the courts system.

This was one of the government’s two central mechanisms to introduce an ‘evictions ban’. It will last at least until late June, and possibly beyond to October if required.

“The outcome is that PD51Z is lawful, applies through possession proceedings and in all but the most exception cases – the court found it hard to envisage examples – should not be lifted,” says Julie Ford of Hemel Hempstead Property Network.

“The was an interesting challenge of the practice directive and had the outcome been different, this could been an immediate game changer for pending possession cases.

“I believe the court of appeal has made the right decision in this case.”

Technical points

The judges were asked to look at several technical and procedural points including whether judges can interfere in suspensions or ‘stays’ of Practice Directions such as PD51Z, but this was kicked into the long grass as a Judicial Review on this point must now follow.

“Although not favourable to those needing possession of their property back before the end of the current suspension of possession claims I feel this judgement is very sensible and provides some certainty on the current position,” says Tim Frome, Legal Director of Landlord Action.

“The Civil Courts are not the right place to deal with a challenge to a government acting ultra vires or ‘outside of their authority’.

“This needs to be done by Judicial Review. The change to the practice direction, allowing agreed case management directions, dealt with one of the main issues in the case being heard.

“I also agree with the final point in the judgement. Judges do always having case management powers, however in the current public health circumstance there would need to be the most exceptional circumstances for a judge to agree to lift the stay so, in short, parties should not bother trying.

“It will be very interesting to see whether the government decides to extend the current three month stay which is due to end around 25^th June. We have estimated that there are over 20,000 cases currently waiting in the county courts and more are being issued every day.

“Any further stay will put huge pressure on the system in the future.”

Read the full judgement.

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Government must increase housing support and lift benefit cap – Shelter

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New figures from Shelter reveal private renters could face a £55 million a month gap in their rent without extra support from the government during the current coronavirus emergency. The research shows the deficit between people’s rents and the welfare support available to them during the pandemic.

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BM Mortgages “Action Required” letter on interest-only mortgages?

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I have received a letter from BM Mortgages asking very intrusive questions about how I will repay an interest-only BTL mortgage I have with them and gently threatening to put me on a repayment mortgage (‘ask’ is the way they put it) if I cannot satisfy them that I have an adequate repayment plan in place.

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Management Company Overcharging?

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Hi All, I paid £972 for my flat’s annual service charge for 2019 in full last year (as stated in my invoice. This year, the service charge went up to £1300, which I already paid 50%.

Now, I just received another invoice of £880 from the managing agent stating it is the service charge balance for 2019 in addition to the £972 already paid.

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Meet Mark Smith (Barrister-At-Law) online at Unity Property Professionals Group

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Our Hon. Legal Counsel, Mark Smith, Head of Chambers at Cotswold Barristers will be presenting an overview of several landlords tax strategies at the Unity Property Professionals Group Thursday the 14th May at 4pm.

Property118 Readers are invited to the group Zoom meeting by registering in advance using the link below.

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C3 ( c ) AST ?

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Hello, I would appreciate any advice or information about letting a property using definition of C3 (c) please.

Let to a small group who don’t fall within C4 use nor meet criteria for C3 (a) or C3(b) any pointers toward relevant noted legal cases would be very welcome?

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Give renters two years to pay back arrears after Coronavirus, says Labour

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Shadow housing secretary backs Shelter research claiming that 1.7 million renters will lose jobs during crisis and that tenants need more protection to prevent evictions and homelessness.

Labour has called for renters to be given up to two years to pay  back rent arrears built up during the Coronavirus crisis, citing research released last week that up to 1.7 million renters may lose their jobs during the pandemic.

The suggestion is part of a five-point plan to be presented to government to help protect the most vulnerable members of society as the expected post-lockdown recession begins to bite economically.

Labour’s shadow secretary of state for housing Thangam Debbonaire (pictured) said giving tenants more time to pay back rent arrears would be essential to stop an ‘unprecedented and devastating spike’ in homelessness and rough sleeping during the crisis.

“Current protections for people renting their homes are woefully inadequate,” she says.

“Unless the government acts now, many thousands of tenants will be at risk of losing their homes.”

Labour’s claims of a looming rental market catastrophe are based on a Shelter/YouGov poll published on 16^th March among 498 tenants during the last week of March of which one in five said it was ‘likely’ that they could lose their jobs during the crisis.

This has then been used to estimate that 1.68 million renters could lose their jobs and face substantial rent arrears.

Polly Neate, chief executive at Shelter, said: “The government has rightly suspended evictions until June, so no one has to face homelessness in the middle of this pandemic. But millions of renters will be in dire straits further down the line without more government support.”

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