Sep

How to avoid costly disputes over Covid and residential tenancies

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The landlord and tenant relationship is a complex one at the best of times. But the Covid pandemic has made the situation a whole lot worse for landlords; they are having to tread the delicate line between staying on good terms whilst maintaining a healthy rental income cash-flow.

Going to law is never an optimal solution, it’s expensive and in the current situation is likely to be long drawn out and of uncertain outcome. Therefore if eviction proceedings can be avoided by simply reasoning and cajoling and negotiation, then so much the better.

Tenants need to understand that despite all the measures bing introduced to protect them, ultimately they are responsible for paying off any amount of accrued rent arrears, unless the landlord is prepared to waive some of this. Sometimes, from the landlord’s point of view, it is prudent to agree at lease a re-scheduling of rent payments, stretching them out over a longer period, and perhaps as an act of goodwill, even waiving some of the amount owed to encourage cooperation.

Landlords should arrange meetings with all their tenants and be proactive about how to help solve their problems. Cooperation between the parties is the key to a successful outcome in these difficult times. Maintaining that contact as the situation develops and adjusting the strategy as necessary is the only way to avoid problems building-up, and inevitably some loss of rent will be called for in many instances.

Landlords should spell out the rights and obligations to their tenants, and put this in writing so that they understand their full long-term obligations. Any agreements reached in terms of re-scheduling and waiving of arrears should always be fully documented and signed, and contemporaneous notes made of all conversations between the parties, exactly what was said and when, and any temporary arrangements made to override of the tenancy agreement.

Eviction should be a last resort and should only be embarked upon if tenants refuse to cooperate over rent arrears or where there is damage to the property or unacceptable levels of anti-social behaviour.

Not all landlords have been able to follow this advice for one reason or another. The figures show that 4,740 households were served a section 21 eviction notice between January and March 2020, a near 25% increase on the previous quarter.

In March, the government introduced legislation which suspended all new evictions by private landlords. All possession notices (either under section 8 or section 21) served between 27 March and 30 September must give six months’ notice before court possession proceedings can be started.

Currently, until 20th September, landlords are able to continue with existing proceedings or commence fresh possession proceedings providing the proper notice has been served and all the pre-action protocols complied with. But this does not mean the process will be easy or quick: it’s very likely that it will take over a year for the courts work through the huge back-log of cases and landlords cannot evict without obtaining a possession from the courts.

A new six-month minimum notice period was announced on 29 August 2020, The Coronavirus Act 2020 (Residential Tenancies: Protection from Eviction) (Amendment) (England) Regulations 2020 SI 2020/914 amended Schedule 29 to the Coronavirus Act 2020 is to extend the minimum notice period to six months and introduce a number of exceptions. The new rules will apply until 31 March 2021.

It is not yet clear whether a reactivation notice for rent arrears under Section 21 will still be in place after 20 September so the information that landlords have already provided will most likely need to be updated.

Landlords should still take all reasonable steps to resolve ongoing disputes before their case comes to court following closely the extension of stay to possession proceedings under the Civil Procedure Rules (CPR) Part 55.

Before serving notices landlords and agents should ensure that all the pre-service requirements have been complied with, otherwise the notice will be invalid and a great deal of time will be wasted. The deposit must be properly protected and all the necessary environmental protection certificates, EPC, smoke and carbon monoxide alarms, electrical equipment testing and gas safety certificates are all up-to-date and valid.

Under no circumstances should landlords attempt to evict a tenant without going through the proper legal processes, this is a criminal offence and fines are very heavy.

One alternative to the courts given that relations have broken down is to consider using the PRS mediation service to seek an agreement between the parties. This is a good way to resolve the matter amicably through an independent source. The process is relatively quick and simple, led by a resolution specialist and the sole focus of helping tenant and landlord reach a reasonable agreement.

During the course of any dispute landlords are still responsible for maintaining the building, that is the main structure and exterior of the property, plus internally all appliances supplied, gas appliances, pipes, flues, ventilation, electrical wiring, sanitary fittings (including pipes and drains) heating and hot water.

Tenants are responsible for their own appliances and furniture, and for any damage caused whilst in occupation, by them, by members of their family or their guests. Landlords are also able to claim against tenants for damage cause indirectly, for example by neglect, failing to maintain or use fittings or fixtures properly, causing condensation damage or flooding by allowing pipes to freeze up over winter.

The potential for disputes arising over the next 12 months when legal assistance for landlords is minimal at best, is high. So the aim for landlords should be to maintain open communications with tenants and to head off trouble before it becomes too serious. Show your tenants that you have their best interest at heart and that you want to help them get through this difficult period, create a lot of goodwill.

If all else fails consider appointing a mediator, an independent third party will seek to facilitate a settlement without the need for court proceedings. This can save time, money and a lot of unnecessary stress as well as being entirely confidential and can help preserve relationships.

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