The biggest question for tenants who may find themselves out of work or laid off without pay due to business closures caused by the coronavirus is, how do I pay my rent? To try and tackle what is likely to be a widespread problem, the Labour party has published draft legislation of its own ahead of the government’s emergency bill, which goes before Parliament this week.
Leading property lawyer Justin Bates of Landmark Chambers has been heavily involved in drafting the legislation. Giles Peaker who also “had a bit of a hand in this” has posted the details of Labour’s proposals on the Nearly Legal website.
The aim of the Landlord and Tenant Temporary Provisions Bill 2020 – Coronavirus emergency rent relief, is to establish that “for assured, assured shorthold, secure or Rent Act tenants, where there was failure to pay contractual rent that was in any way related to the effects of the coronavirus during a designated period, this would not count as rent lawfully due for the purposes of the relevant rent arrears grounds of possession”.
This does not mean that tenants don’t have to pay their rent. Arrears would have to be paid eventually. But they could not be used as a reason to start possession claims, now or in the future.
Giles Peaker also points out that, “Where the tenancy may be subject to a section 21 notice, this draft [bill] does not stop potential service and proceedings under s.21, as it is impossible to establish the reasons for a section 21 (and some uses of it may be for such things as recovering an abandoned property)”.
The Residential Landlords Association (RLA) and the National Landlords Association (NLA) are also calling for a package of measures from government and mortgage lenders to support tenants and landlords affected by the coronavirus. This includes:
- temporary scrapping of the five-week wait before Universal Credit claimants get their first payment,
- pausing the final phase of restricting mortgage interest relief to the basic rate of income tax, and
- ensuring lenders look sympathetically on requests by landlords for mortgage payment holidays where their income is being affected through reduced or non-payment of rent.
The Acorn union which supports tenants, workers, and residents, is also calling for a “rent holiday” and to protect tenants from the threat of eviction.
In the meantime, the situation with possession claims in general, including section 21 based claims, remains unclear. Like most aspects of business over the next weeks and months, it will be a case of wait and see. The Grenfell Inquiry was halted yesterday as one key player needed to self-isolate and two others are over 70 and have been advised to stay at home. If this scenario, as seems likely, is played out across the courts then there will be no way to pursue claims for repossession on any grounds for perhaps many months to come.