COVID-19: Two more developments in possession proceedings that you need to know about

15.09.2020

The last week has brought 2 significant developments in the law relating to recovering possession, as affected by “covid” regulations and procedures. In this bulletin, these developments are addressed as follows :

  • Tom Frazer considers the extension of notice periods that landlords must give their tenants prior to issuing proceedings following the Coronavirus Act 2020 (Residential Tenancies: Protection from Eviction) (Amendment) (England) Regulations 2020; and
  • Henry Webb considers the recent document entitled Overall Arrangements for Possession Proceedings in England and Wales published by the Master of the Rolls and the Working Group on Possession Proceedings, which provides further information as to how possession proceedings will operate for the foreseeable future.

In view of the importance of the above developments, Selborne Chambers is organising a webinar, to be held next week. An invitation to attend this event will be sent out very soon. Please watch out for this.

Mark Warwick QC

 

Notice Periods

On 28 August 2020 the government introduced new measures to extend the notice periods that landlords are required to give their tenants prior to commencing possession proceedings. Alongside the general stay, due to expire on 20th September, these measures can be seen as part of a wider policy of providing protection to tenants during the Covid-19 pandemic.

The new measures come in the form of the Coronavirus Act 2020 (Residential Tenancies: Protection from Eviction) (Amendment) (England) Regulations 2020, enacted by the Government pursuant to its powers under the Coronavirus Act 2020. These regulations (“the Regulations”) came into force on Saturday 29th August 2020.

The Regulations operate through an amendment of Schedule 29 of the Coronavirus Act 2020, which itself refers to and amends a wide range of legislation concerning proceedings for possession of residential property. As such, without recourse to that legislation, the Regulations are somewhat opaque. It is the purpose of this bulletin to unpick the meaning of the Regulations, focussing especially on their impact on notices under s.8 and s.21 of the Housing Act 1988.

 

The Effect of the Regulations

Before considering the substantive effect of these regulations (“the Regulations”), it is useful to note two points of general importance:

  • Pursuant to Section 4, the new notice periods imposed by the Regulations do not apply to notices given or served prior to 29 August 2020. This means that any notice served between 25th March and 28th August 2020 will still be subject to the notice periods in place at the date of service (in most instances, three months).
  • Pursuant to Section 3(2), the notice periods provided by the Regulations will remain in place in England for all notices given up to and including 31 March 2021. However, they will only remain in place in Wales until 30 September 2020.


Assured Tenancies

S.21 Notices

The changes in relation to notices given under s.21 of the Housing Act 1988 are relatively straightforward. Prior to the Coronavirus Act 2020, the required notice period was two months. Paragraph 7 of Schedule 29 to the Coronavirus Act 2020 extended this period to three months for notices given after 25 March 2020. The changes made by the Regulations are twofold:

  • Pursuant to Section 3(7)(a) of the Regulations, the notice period for s.21 notices given on or after 29 August 2020 is now six months.
  • Further, Section 3(7)(b) restores the four-month window in which landlords can bring possession proceedings following the notice period. Proceedings may be issued up to ten months from the date of service of the notice, rather than the six months previously in place.


S.8 Notices

The changes to notices under s.8 of the Housing Act 1988 are more complicated. The new notice periods, imposed by s.3(6)(d), vary depending on the grounds specified in the notice.

 

Rent Arrears

The notice period under grounds 8, 10 and 11 is dependent on the time over which arrears have accrued:

  • Where the tenant is in arrears of six months’ rent or more, the notice period is four weeks;
  • Where the tenant is in arrears of less than six months’ rent, the notice period is six months

We are now approaching six months since lockdown was imposed. Where landlords have not been paid rent during that period, they will shortly be in a position to give notice with a shorter period than that which applied prior to the pandemic. This is no doubt intended to redress the balance between landlord and tenant that has, in recent months, been tipped in favour of the latter.

Further, it will in many cases be prudent for landlords to wait to give notice until rent arrears hit the six-month mark. This will likely bring forward the date on which they are entitled to issue possession proceedings, and ultimately speed up recovery of their property.

 

Anti-Social Grounds

Grounds 7A and 14 respectively concern tenants being convicted of serious offences or anti-social behaviour, or causing nuisance or annoyance. Prior to the Regulations, the Coronavirus Act 2020 had imposed a three-month notice period for notices relying on these grounds. S.2(c) of the Regulations suspended this effect.

Unlike the other grounds under s.8, the Regulations do not impose any new notice periods for grounds 7A and 14. As such, the notice periods revert to their pre-covid lengths, as imposed by the Housing Act 1988:

  • For ground 7A, the notice period is one month
  • For ground 14, no notice period is applied, and proceedings can be issued from the date of service of the notice

 

Specific Grounds

Reliance on the following grounds will result in a notice period of three months:

  • Ground 7: concerning tenancies devolved following the death of a former tenant;
  • Ground 7B: where the tenant is in breach of immigration rules and has not been permitted a right to rent

 

Reliance on the following grounds will result in a notice period of two weeks:

  • Ground 14A: concerning tenancies where a partner has left as a result of domestic violence and is unlikely to return;
  • Ground 14ZA: where a tenant has been convicted of an indictable offence during a riot;
  • Ground 17: where the landlord was induced to grant the tenancy as a result of a false statement.

 

Other Grounds

A notice that specifies reliance on any other grounds not specified above, being namely grounds 1 to 6, 12, 13, 15 and 16, have a notice period of six months.

 

Other Tenancies

The Regulations also change the notice periods applicable to Rent Act Tenancies, Secure Tenancies (s.83 Housing Act 1985), Introductory Tenancies (s.128 Housing Act 1996) and Demoted Tenancies (s.143E(3) Housing Act 1996).

The effect of s.3(3) and s.3(4) is to bring notice periods for Rent Act Tenancies and Secure Tenancies in line with those for Assured Tenancies as discussed above. As a result:

  • Where at least six months’ rent is in arrears or the tenant has committed anti-social behaviour, the notice period is four months;
  • In other circumstances, the notice period is six months.

s.3(8) and s.3(9) concern Introductory and Demoted Tenancies. Under these provisions, where a landlord seeks possession for reasons relating to anti-social behaviour or domestic violence, the notice period will be four weeks.

 

Overall Arrangements for Possession Proceedings in England and Wales

In previous bulletins, we have discussed the introduction of PD55C, and subsequently the extension to the stay of possession proceedings under CPR 55.29.  We also informed readers that the Working Group on Possession Proceedings (“the Working Group”) was in the process of considering how the backlog of possession cases would be dealt with.  The Working Group has now published its conclusions, in a document entitled Overall Arrangements for Possession Proceedings in England and Wales (“the Overall Arrangements”).

The Overall Arrangements give further insight as to how the Court system will deal with possession proceedings for the foreseeable future.  Practitioners will need to get up to speed with the new system quickly, and will need to accept that the process of obtaining possession will be a more cumbersome (and likely more expensive) than we were used to prior to the Covid-19 pandemic.  A broad summary of the document is set out below.


Aim of the Overall Arrangements

The Overall Arrangements summarise the procedures which will be put in place to deal with possession claims from 21 September 2020 and the various sources which will need to be referred to in dealing with possession claims.  The substance of the Overall Arrangements is stated to be directed at: (a) reducing volume in the system by enabling earlier advice and increasing settlement; (b) taking account of the effect of the pandemic on parties (within the discretionary limits allowed by existing law); and (c) maintaining confidence in the fairness of outcomes.

To achieve these aim, we are told to expect: (1) further amendments to the CPR and practice directions; (2) the introduction of a scheme of prioritisation for listing to be used by the Judiciary; (3) further guidance for possession claims from the Court Service, the Ministry of Housing and the Financial Conduct Authority; (4) greater provision of legal aid duty scheme legal advice; and (5) the introduction of an independent mediation/facilitated negotiation for possession claims through a pilot funded by the Ministry of Housing and Ministry of Justice.


Re-starting existing cases

The document confirms what is set out in PD55C – that claims brought before 3 August 2020 will not be listed, relisted or referred to a Judge until a party files and serves a “Reactivation Notice” confirming that they wish the case to proceed.  This can be served at any time until 29 January 2021.

A template form “Reactivation Notice” is available here.

The notice includes provision for the person serving the notice to give details of their knowledge as to the effect of the Coronavirus Pandemic on the Defendant and their dependants.  It also requires a rent schedule for the last 2 years to be enclosed for cases based on rent arrears, and requires any existing case management directions to be enclosed (together with an indication whether an existing hearing date can be met and what other directions are required).  Importantly, the notice requires the server to indicate whether the case falls within one of the priority boxes to be used by Judges in listing new cases (see below).  Presumably this means that even if your case has a listed hearing date and you assert that the existing date can be met, the Court is not bound to accept this and might choose to list a different case with greater priority instead.

Hearings

The Overall Arrangements confirm that parties will be offered a physical hearing for any Substantive Hearing (see below).  This is subject to: (a) if contingency arrangements need to be implemented; (b) dealing with accelerated possession claims; and (c) where the parties (and the Court) agree that a hearing should be by telephone or video.  However, a party or a legal representative may appear by video link where the Court facilities allow.

Prioritisation and Case Marking

The Overall Arrangements set out both criteria for prioritising cases, and the means to “mark” a file as being one in which either the Defendant or the Claimant faces particular hardship as a result of Covid-19.  It is clear that both of these will be used to assist Judges in deciding how to list cases.

As to priorities, the full list is:

(a) Cases with allegations of anti-social behaviour, including Ground 7A of Schedule 2 to the Housing Act 1988 and Section 84A of the Housing Act 1985;

(b) Cases with extreme alleged rent arrears accrued, that is, arrears equal to at least

(i) 12 months’ rent or

(ii) 9 months’ rent where that amounts to more than 25% of a private landlord’s total annual income from any source;

(c) Cases involving alleged squatters, illegal occupiers or persons unknown;

(d) Cases involving an allegation of domestic violence where possession of the property is alleged to be important for particular reasons which are set out in the claim form (and with domestic violence agencies alerted);

(e) Cases with allegations of fraud or deception;

(f) Cases with allegations of unlawful subletting;

(g) Cases with allegations of abandonment of the property, non-occupation or death of defendant;

(h) Cases concerning what was allocated by an authority as ‘temporary accommodation’ and is specifically needed by the authority for reallocation as ‘temporary accommodation’.

 

The above list is not itself stated to be in order of priority, and hence it appears that fulfilling any one of the criteria in the list will enable equal priority for listing with all the others.  There is no specific distinction made between residential and commercial cases, however a number of commercial possession claims might would fall within some of the criteria.  Subject to those criteria, priority will otherwise be given to listing claims issued before the stay commenced in March 2020.

As to “case marking”, this is a new procedure, the object of which is to enable: (a) highlighting settlement suitability; (b) enabling certain Claimants, presumably with bulk claims, to identify certain defendants as available for “special consideration”; (c) bringing to the Court’s attention that a Claimant may be in particular difficulty as a result of the pandemic; (d) assistance with listing and the exercise of any discretion; and (e) for monitoring purposes.  A request for a case to be “Covid-19 case marked” can be made at any time and in any form, but must include details such as the relevant hardship arising from the pandemic and details of the Defendant or Claimant’s access to the government’s support schemes.

 

The route to a hearing

Unlike the possession procedure we are used to, the Overall Arrangements do not include provisions such as the Court listing a hearing date upon issue of the Claim Form or the Court hold “block lists” of possession claims.

Instead, “unless there are existing case management directions that provide otherwise” (which presumably includes the listing of a trial), then in all cases (stayed and new, but subject to a Re-activation notice in stayed cases) there will first be a Review Date, and then second a Substantive Hearing Date.  The only exception to this is Accelerated Possession Claims, which will not have a Review Date but will be referred to Judges “at a manageable frequency”.  However, a Review Date might even be listed in such claims, once the Judge has considered the papers.

The Substantive Hearing Date will be at least 28 days after the Review Date.

 

The Review Date

The Review Date is not a hearing.  However, it will require similar preparation, and potential availability, as might otherwise be required for a hearing.  This is because the Claimant will be required to produce an electronic and a paper bundle 14 days before the Review Date.  The electronic bundle is for the Court, and the paper bundle for the Defendant.

The purpose of the Review Date includes: (a) the Defendant having a fixed date upon which they might obtain duty scheme advice; (b) the potential opportunity for settlement between the parties (hence the Claimant is required to “be available” during the Review Date (it would appear, for the whole day)) to discuss the case by telephone with the Defendant or the duty adviser; and (c) to enable a Judge to consider the papers and either list for a Substantive Hearing Date, dismiss the claim (with liberty to apply for an oral hearing) or make other directions.

It is also upon the Review Date that there is the possibility of the parties, subject to their agreement, being referred to the new mediation pilot.  The gateway to this mediation pilot appears to be principally a decision by a duty scheme adviser that the case has a reasonable chance of being compromised but is too challenging to be resolved by negotiation on the Review Date itself.

 

The Substantive Hearing Date

If the case proceeds to a substantive hearing, then this will be listed for 15 minutes, and additional time will be allowed either side of the hearing for Covid-19 safety procedures.  It appears that the Substantive Hearing Date will otherwise function in the same way as the first hearing date which is normally listed in possession claims.

 

When does it start?

There is a Schedule to the Overall Arrangements which sets out the key milestones going forward.  These include guidance, template documents and leaflets to be published by 18 September 2020, the Court starting to deal with possession claims from 21 September 2020, the earliest date for evictions by 6 October 2020, the first Review Dates by 19 October 2020 and the first Substantive Hearing Dates from 16 November 2020.

 

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