Birmingham

COVID-19 and the Risk of Losing Your Home

Article by Katie Wilkinson

The true financial impact of the COVID-19 coronavirus is yet to be felt, but for many the inability to pay rent on their homes is a real problem that they are facing imminently.

The government announced emergency legislation on 18 March 2020 which included extensive measures to protect renters and landlords affected by coronavirus.

The effect of the legislation means that no persons in rented accommodation (including both social housing and private properties) will be forced to move out of their home during the period that COVID-19 affects society.

Landlords will be unable to commence possession proceedings to evict tenants for a period of at least 3 months. To address the unfairness that arises for landlords who may not be receiving their rental income, they can apply for a 3 month mortgage payment holiday meaning that they will not have the financial pressures of meeting mortgage payments, and in turn will not need to place pressure on tenants to pay rent.

At the end of the 3 month period the Government has stated that landlords and tenants will be expected to work together to establish an affordable repayment plan, taking into account tenants’ individual circumstances.

The bill acts to extend the period of notice for all types of tenancy to 3 months irrespective of what the grounds for possession are.

For example Section 21 notices previously required a notice period of 2 months, so in practical terms the legislation extends that period by 1 month. The legislation applies, however, to all notices seeking possession until 30 September 2020. The Bill does allow for further legislation to be passed to extend the 30 September date, and to lengthen the notice period further if required.

Landlords can continue to issue proceedings either in relation to notices which have already expired or notices which will expire prior to 30 September 2020. Such claims are routinely being stayed until the 90-day period has expired but in any event, whether the Court would be able to hear such claims in the next 3 months is unlikely.

On 19 March 2020 a message was released from The Lord Chief Justice to judges in the civil and family courts which reads:

“The default position now in all jurisdictions must be that hearings should be conducted with one, more than one or all participants attending remotely. That will not always be possible. Sensible precautions should be taken when people attend a hearing. They are now well-known. We all take them when out of the home”

Whilst the civil courts have utilised telephone hearings for many years, they are rarely ever used when one party is unrepresented (which means that a person is not using the services of a Solicitor and instead represents himself).

Guidance from the Courts and the Government is evolving almost daily to take into account new information and issues arising as a direct result of COVID-19. Whilst the new measures will be welcomed by persons in rented accommodation, it should not be forgotten that any rent unpaid in the next 3 months will ultimately become repayable in full. The financial implications of this will no doubt subsist for many months to come and, whilst the Court may be sympathetic to financial problems caused by COVID-19, the laws applicable to possession claims will still be in force once the current situation improves.

Costs in the First Tier Tribunal (Property Chamber)

 

Following a recommendation in the Report of the Costs Review Group to the Senior President of the Tribunal in December 2011, costs in the First Tier Tribunal (Property Chamber) can now be awarded in the following circumstances:

  • Where wasted costs have been incurred; or
  • Where costs have been incurred by one party where a person has acted unreasonably in bringing, defending, or conducting proceedings; or
  • In a land registration case.

Jurisdiction is conferred on the Tribunal pursuant section 29(4) of the Tribunal Courts and Enforcement Act 2007 which reads:

Costs or expenses

(1) The costs of and incidental to—

(a) all proceedings in the First-tier Tribunal, and

(b) all proceedings in the Upper Tribunal,

shall be in the discretion of the Tribunal in which the proceedings take place.

(2)The relevant Tribunal shall have full power to determine by whom and to what extent the costs are to be paid.

(3) Subsections (1) and (2) have effect subject to Tribunal Procedure Rules.

(4) In any proceedings mentioned in subsection (1), the relevant Tribunal may—

(a) disallow, or

(b) (as the case may be) order the legal or other representative concerned to meet, the whole of any wasted costs or such part of them as may be determined in accordance with Tribunal Procedure Rules.

(5) In subsection (4) “wasted costs” means any costs incurred by a party—

(a) as a result of any improper, unreasonable or negligent act or omission on the part of any legal or other representative or any employee of such a representative, or

(b) which, in the light of any such act or omission occurring after they were incurred, the relevant Tribunal considers it is unreasonable to expect that party to pay.

(6) In this section “legal or other representative”, in relation to a party to proceedings, means any person exercising a right of audience or right to conduct the proceedings on his behalf.

(7) In the application of this section in relation to Scotland, any reference in this section to costs is to be read as a reference to expenses.”

Pursuant to this provision, Rule 13 of The Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013 now applies to unreasonable conduct arguments in proceedings in agricultural land and drainage cases, residential property cases, and leasehold cases.

If awarded to a party, costs can be summarily assessed by the Tribunal, awarded in an agreed sum, or made subject to detailed assessment.

Applicants and Respondents in the Tribunal should therefore ensure compliance with Orders and Directions, and avoid last minute applications, or risk defending a costs application on the basis of unreasonable conduct.

Katie Wilkinson