In general, there are so many reasons why commercial or residential owners need to obtain a possession of a property. The coronavirus pandemic has affected all aspects of life and business. Due to the pandemic, many people lost their job and business and, as a result, could not pay rent. Let’s look at the current process to understand when conducting a residential and a commercial eviction.
Residential tenant eviction.
In such difficult situation, many landlords try to help tenants. Also, Governments across the UK introduced a series of housing support measures, some of which were amended and extended after March 2020. In particular, the Government set up extended notice periods for tenants. There was a general requirement for a four-month notice period.
At the same time, many tenants are trying to use the pandemic as an excuse and continue not to pay rent. As a result, landlords are experiencing difficulties with evicting tenants and the process may cause more troubles than you thought.
On 1 October 2021 in England, notice periods reverted to their pre-pandemic levels with new versions of Section 21 and Section 8 notice forms for agents and landlords.
The first step of eviction process is to notify your tenant that you’d like them to leave your property. It will be necessary to serve either a Section 21 or Section 8 notice under the Housing Act 1988.
A section 8 Notice is used when tenants have broken the terms of the tenancy, for example: –
- Rent arrears
- Damage to the property
- Failing to maintain the property according to the contract.
A section 21 notice or a notice of seeking possession can be used to evict tenants either: –
- At the end of a fixed term tenancy – if there is a written contract
- During a tenancy with no fixed end date – a ‘periodic’ tenancy.
There a lot of advantages in using a professional service in an eviction process. It could be not convenient, or difficult for landlords to visit a property personally or they are worried about a confrontation with a tenant. Also, there is a strict legal procedure for eviction. Without the right process for the right tenancy, eviction cannot happen. And landlords can never gain a possession order from the court. It is important to clearly understand which notice must be served. Depending on your circumstances it may be that both notices should be served. Serving a valid notice is the most important part of the eviction process and is a key to a successful eviction.
Sometimes, however, the tenants refuse to leave on the specified date. In these cases, you should apply for a possession order. The landlord must be fully conversant with the tenancy and have all relevant paperwork readily available, such as the tenancy agreement and an up-to-date schedule of arrears at the hearing. County court proceedings need to be issued within the relevant limitation period. The limitation period is determined based on the type of notice served on the tenant. If proceedings are not issued within the limitation period, you will need to serve a new notice on the tenant and wait for the notice to expire before you can issue proceedings again.
If a tenant fails to vacate on or before the expiry of the Possession Order (which is usually 2-6 weeks), a County Court bailiff must be appointed to carry out the final stage, eviction.
In conclusion, a residential eviction process can be a very frustrating and worrying time for landlords. If this is the case, it is imperative that a landlord must act quickly to minimise losses as much as possible.
The proposed changes could take place in the future.
The Government confirmed its intention to make the following changes to Section 8 and its plans to implement the changes is expected in early 2022:
- Under the current law, a Section 8 notice can be served if the landlord wants to move into the property to live in as their own home. The Government has proposed widening the scope of the ground to include children and other family members.
- The government has proposed introducing selling a property as a new ground, which would mean landlords could regain the property before a fixed-term agreement ends. However, as with moving into the property, the government is proposing that landlords shouldn’t be able to use this ground within the first two years of the tenancy agreement.
- The government is considering changing the ground so that landlords can serve a two-week notice seeking possession once the tenant has accrued two months of rent arrears. Thereby to prevent tenants to reduce their arrears to just below the prescribed threshold to avoid appearing at court.
Commercial tenant eviction
While for the residential tenant eviction all restrictions were lifted from 1 October 2021, for the commercial tenant eviction all evictions ban rules are still taking place.
Businesses that have remained closed during the pandemic and cannot pay their rent due to it are currently protected from eviction. The UK Government announced on 23 March 2021 that commercial tenants are to be precluded from evicting. This measure was extended until December 2020 and then further to 30 June 2021. On 16 June 2021, the Government announced an extension by a further 9 months until 25 March 2022.
So, at the current moment and until 25 March 2022 the following measures are in place:
- Businesses that remained closed during the pandemic and cannot pay their rent due to it are currently protected from eviction.
- Restrict commercial landlords in the use of Commercial Rent Arrears Recovery. The procedure which allows landlords to recover rent arrears by instructing enforcement agents to take control of the tenant’s goods and sell them.
These measures are the part of the emergency Coronavirus Act 2020.
The Government will legislate to ringfence rent debt from March 2020 for tenants who have been forced to close because of COVID-19 business measures until trading restrictions are removed and introduce a system of binding arbitration to be undertaken where agreement cannot be reached. The period on normal operation will not be covered by further legislation.
Upon the Supporting business with commercial rent debts: policy statement, published on 4 August 2021, once the new system is in place this will mean:
- landlords will be able to exercise their rights to evict any tenant for the non-payment of rent debt incurred prior to March 2020 and from the end of the ringfenced period
- the new legislation applies only to debt for tenants impacted by COVID-19 business closures. Landlords will be able to evict any tenant who falls outside the scope of arbitration legislation over the non-payment of rental arrears accrued at any time
- landlords will also be able to charge interest on rent incurred from the end of the ringfenced period onwards if such interest payments are included in the terms of their lease.
Although landlords are not able to forfeit a lease on the grounds of non-payment of rent during the period of suspension, tenants remain liable for rent during that period. Most standard commercial leases provide that where rent is unpaid, interest accrues on the unpaid sums at a specified rate. This will be payable in addition to the rent arrears at the end of the suspension period.
However, LANDLORDS can still forfeit a COMMERCIAL lease for any other breaches of covenant not relating to payment of rents. Where landlords can forfeit commercial leases, with no residential elements, for non-payment of rents by peaceably re-entering the premises, in the case of any of breaches of tenant covenant the landlord must first serve a notice on the tenant under section 146 of the Law of Property Act 1925. That notice must give the tenant a reasonable amount of time to remedy the breach, if it is capable of remedy, and it is only after that reasonable period expires that a landlord is entitled to forfeit the lease. A landlord can do so by peaceable entry, where it is legal and executable, or by issuing possession proceedings at court. The tenant may apply to the court for relief from forfeiture and/or a declaration that the lease has been wrongfully forfeited in either event.
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