The Coronavirus Act and Landlord and Tenant Implications

As some people will be aware, The Coronavirus Act (“the Act”) received Royal Assent on 25 March 2020.

From 26 March 2020, there are various property implications.

Firstly, in respect of residential tenancies, the Act alters the Rent Act 1977, Protection from Eviction Act 1977, and various Housing Acts.  The effect of the amendments is that in respect of the relevant notices to terminate the tenancy agreements, the statutory notice period has been extended to 3 months.  Most residential landlords let their properties under assured shorthold tenancy agreements and therefore utilise notices pursuant to section 8 and section 21 Housing Act 1988 to terminate the tenancy.  From 26 March 2020, in order for those notices to be valid, the notice period is extended to 3 months.  The Act makes provision that the notice period can be extended to 6 months.

This is in addition to the current position, as previously advised that all current possession proceedings and any new possession proceedings sent to the court will be placed on hold for a period of 3 months.

Lastly, there is a new form of notice to serve pursuant to Section 21 Housing Act 1988 that reflects the changes made as a result of the Act.  It is important that if landlords are looking to serve notice that they use this up to date version.

Turning to commercial leases, the Act makes provision that in respect of business tenancies, no right of re-entry or forfeiture for non-payment of rent may be enforced in any way until 30 June 2020. Again, this period can be extended by the government.  What this means is that a landlord will not be able to forfeit a commercial lease for non-payment of rent by peaceable re-entry or court proceedings until after 30 June 2020 (or further date if provided).

During this period, no conduct of a landlord is to be regarded as waiving the right to forfeiture unless the landlord provides an express waiver in writing.

If you are a commercial landlord and your tenant is not able to pay their rent, then we would reiterate previous advice given namely that a dialogue needs to be opened between the landlord and tenant to discuss each situation based on its own merits.  However, landlords should not enter into any written document with their tenant without first seeking legal advice to ensure that they do not prejudice their position. It is important to be aware that in most situations, the landlord will be able to charge interest on any rental arrears.

If you have any questions, please contact Fiona Squire or complete a contact form for her to call you back.

 

The content of this article is correct as at the date of posting and is for information purposes only. Whilst we try and ensure it is accurate we do not warrant or guarantee that this is the case, nor do we accept any responsibility in the event that it is relied on. The information is not intended to be a substitute for legal advice which you are recommended to obtain.

 

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