The Coronavirus Act Receives Royal AssentMar 25, 2020
What it means for residential landlords
The coronavirus is having an unprecedented effect, causing great uncertainty across the economy, including the private renting sector. The Coronavirus Act 2020 deals with a vast range of matters including residential tenancies and protection from eviction.
Prior to the Coronavirus Act a landlord who entered into an assured shorthold tenancy could regain possession of his or her property by either serving a “no-fault” notice, by giving 2 months’ notice after the expiry of the initial period, or serving a “fault notice”, which could have led to possession in as little as 2 weeks. The initial period is typically 6 months but can be for longer and it is always worth checking the wording of the tenancy agreement to be sure.
Currently, if the tenant fails to vacate the property after the expiry of the notice period, irrespective of whether it was a “no-fault” or “fault” notice, a landlord cannot evict them without a possession order from the court. This means that landlords are put to the expense of issuing possession proceedings. A possession order will typically order a tenant to vacate the property within 14 days, albeit this can be extended up to 6 weeks if the tenant can show hardship.
The Coronavirus Act
The Coronavirus Act has implemented extraordinary changes to existing housing legislation. The changes will apply from 25 March 2020 up until 30 September 2020, this is known as the “relevant period”. Among the changes is the notice period required by a landlord who wishes to terminate an assured shorthold tenancy. The normal 2-month period for “no fault” notices is extended to 3 months. This same 3 months period applies to the “fault” notices, served where the tenant has committed a breach of the tenancy. In practice, Landlords will need to ensure they give not less than 3 months’ notice to tenants on notices served from 25 March 2020 up to 30 September 2020.
The Coronavirus Act includes powers for the three-month period to be extended up to 6 months. It is not clear yet what circumstances would warrant such an extension.
Additional Notice Period
The additional notice period stipulated in the Coronavirus Act is likely to cause landlords great concern. Especially if there is a non-paying tenant in occupation. However, most banks are offering “mortgage holidays” and where a landlord is experiencing non-payment of rent we would strongly advise you to discuss this with your lender and discuss an affordable repayment plan with your tenant.
However, if you’re a landlord, we would strongly suggest that you contact us to discuss this before taking any steps to recover your property.