Protection for residential tenants: Rental payments during coronavirus

Parliament has now put in place emergency legislation, known as the Coronavirus Act 2020, to protect residential tenants from eviction for any reason for the next three months.

This includes protection for any residential tenants who do not pay rent over the next three months during the coronavirus period. This legislation will be in place until 30 September 2020.

How will this impact residential tenants?

• Residential tenants will not be forced to leave their property for the next three months, even if they do not pay their rent.
• Any notice served relating to regular shorthold tenancies and many other kinds of private sector and housing association residential tenancies must have a three month notice period.
• Any residential tenant with rent arrears could still have a notice to quit served on them, but this notice will have a three month period, which means that a tenant in this situation could not have court proceedings brought against them for three months.
• The Government has ensured that it is able to make this notice period longer if needed so, we may see this postponement of evictions be put in place for a longer period depending on how long the coronavirus period continues.
• The Master of the Rolls has announced on 27 March 2020 that all ongoing possession claims within, or about to enter the Court system will be put on hold for 90 days. This too may be extended. This will have the effect of postponing possession proceedings where notices have already been issued before 27 March 2020.

What happens if residential tenants do not pay their rent?

• If residential tenants do not pay their rent during this three month period, no provisions are included to release tenants from liability to pay the rent and interest may accrue on unpaid rent.
• Under the new legislation, many renters could end up with large rent arrears, but come out of the three month period with no means of paying it off, and they would still be able to be evicted after the period of protection expires. Landlords and tenants are being encouraged to work together and put payment plans in place to address this issue.

What should tenants do next?

• Where residential tenants can afford to continue to pay their rent, such rents should be paid.
• If residential tenants cannot afford to pay all their rent but could pay a proportion, the tenants should have a discussion with their landlords to see if a reduced rent could be agreed. This will prevent a build-up of rent arrears over the three month period.
• If residential tenants cannot pay their rent, they do not need to worry about being evicted during the next three months in light of the statutory protection in place. However, tenants should think ahead to the future and work together with their landlord to discuss payment plans for payment of any rent arrears accrued over the three month period to avoid the risk of eviction once the three months have passed.

Comment

Landlords and tenants working together will be crucial in these testing times and communication will be key. It should help improve relationships between landlords and tenants so that everyone can get through this together.