Tenant Eviction in a Pandemic: The Moving Goalposts

For struggling tenants, the news that notice periods have been extended to 6 months is a welcome reassurance they’ll still be in their homes over Christmas. For some landlords, it’s starting to feel like a nightmare.

As job market turbulence and public health fears become the new normal, avoiding a homelessness crisis is crucial. The UK government has taken important steps to protect tenants from being turfed onto the streets during the whirlwind of the pandemic – many of whom have lost their jobs, been furloughed, or become ill. With the majority of offices still shut, the high street and hospitality sector just embarking on a shaky recovery, and industries across the board in turmoil, re-employment prospects are grim.

But tenants are not the only ones who face the loss of their livelihoods. Nor are they the only ones losing their jobs. Landlords have the unfortunate plight of being tarred with a broad brush – the widespread lack of sympathy from both the government and the public stemming largely from the assumption that landlords are inherently wealthy, and several months’ of missed rent won’t make a dent in their finances.

Whilst this may be true for some big players, a study by the University of York paints a very different picture.

• Corporate organizations make up just 27% of the UK’s landlords, with the remaining 73% being individuals or families
• Roughly 34% of independent landlords have just one rental property in their portfolio
• Roughly 40% of landlords finance their investment properties with an outstanding mortgage or loan.

Further, according to stats from Letting Agent Today, 44% of landlords entered the market to contribute to a pension (in many cases, a means to overcome dwindling pension offerings from modern employers), and 39% earn less than £20,000 a year from their rental portfolios. Not quite the windfall some might expect.

The unprecedented tenant protection being offered by the government means many landlords will be in the doldrums for the long haul, with confusing, ever-changing legislation adding to the strain. The new policy, announced on September 11, can be broken down into three central measures that all landlords should be aware of.

1. Notice periods extended to 6 months

The biggest change to be implemented not just within the pandemic but in tenancy history is the extension of the notice period from 2 months, to 3 months back in June, to 6 months as of September 11. Designed to keep vulnerable tenants in place throughout the winter, this measure comes as a huge blow to landlords dealing with tenants in arrears. It will remain in place until at least March 2021.There are some exceptions, however:

• If a tenant is displaying verifiable anti-social behaviour, the notice period is reduced to 4 weeks.
• If a tenant is more than 6 months in arrears, the notice period is reduced to 4 weeks.
• If a tenant is committing domestic abuse, the notice period is reduced to 2 weeks.

2. Possession hearings will restart from September 21

Those keenly awaiting the opportunity to file for possession at the end of August were dealt another blow when the reopening of hearings was pushed back to the 21st of September. Now just around the corner, the date may bring hope to landlords dealing with months of arrears or problem tenants, but county courts were already snowed under by possession claims back in January. Many landlords were struggling with the backlog since before coronavirus even hit.

Further, the courts aren’t making things easy – those who struggled with law-breaking tenants and filed for a possession hearing prior to the 3rd of August will need to reactivate their claim, undergo a new review hearing (which must occur at least 4 weeks before the official court date), and meet the unprecedented demand of providing judges with information about the tenant’s personal situations in light of the pandemic. Proceedings can be adjourned until this information is provided, and if found insufficient, risks rejection.

For new possession claims based on tenant arrears, landlords will need to serve a Section 21 and Section 8 (notice for possession order).

3. Evictions will not be enforceable during the Christmas period

The third measure comes in the form of a “winter truce”, in which bailiffs will have no power to enforce evictions over the Christmas period. Exact dates for this have not yet been confirmed. The aim is to keep tenants housed during the time of year when emergency services, homeless shelters and welfare services are stretched to their limit.

It also applies to rolling and local lockdowns. It prevents people from being forced to move house in the event of a second spike. This is a measure that comes with no work-around. If you are granted possession, if the date falls within this period (exact dates as yet unconfirmed), you won’t have recourse against tenants refusing to leave.

Hindsight is 20-20

The problem with the drip-fed nature of these government announcements is that they’ve made forward planning impossible for property investors. In fact, one could argue that the moving goal posts have led landlords to miss the opportunity to sell at a profitable price. The stamp duty holiday, unexpectedly strong market, and peak summer season may have enabled many to exit, which they might have opted for had they known the eviction period would be extended again. Of course, no one could have predicted how the shockwaves of coronavirus would play out over the course of the year.

Although it can sometimes feel ostracizing to be a landlord, there are advocates demanding fairness and support for the sector. Timothy Douglas of ARLA Propertymark has called for the government to ‘look at additional measures to provide direct finance to landlords… to cover Covid related arrears and help boost confidence in the sector as we head into the winter’.

It’s also important to remember that this won’t be forever. A further push back of court dates doesn’t seem to be on the cards, and with courts once again able to enforce legal evictions, the hope is that tenants will be encouraged to stick to the law, pay arrears, and adhere to process.

Finally, people may not need offices, but they’ll always need homes. In looking to the future, one key thing landlords can do to put safeguards in place is to use trusted, professional letting agents. A thorough agent who puts a landlord’s interests first can be the difference between a successful tenancy and a stressful one. Check out www.sophicproperty.co.uk (based in Reading) for a fantastic example.

Key takeaways:

• Tenant eviction now requires a 6 month notice period. This will remain in place until at least March 2021
• The ‘winter truce’ means bailiffs will not be able to remove tenants from their homes during the Christmas period, or during local lockdowns.
• If a tenant is displaying verifiable anti-social behaviour, the notice period is reduced to 4 weeks.
• If a tenant is more than 6 months in arrears, the notice period is reduced to 4 weeks
• If a tenant is committing domestic abuse, the notice period is reduced to 2 weeks.