Under emergency legislation passed to counter the Coronavirus pandemic, commercial and residential tenants have been offered protection against evictions. However, the measures introduced are accused of being watered down and ultimately not doing enough to protect those most affected by the pandemic.
What exactly has changed?
The eviction ban means that tenants can still be served a notice of eviction under section 21 and 8. However, landlords cannot enforce the eviction through court proceedings for a period of three rather than two months. In simple terms, court proceedings are needed to process eviction notices, and since they are terminated for three months, evictions cannot occur.
The ban on court proceedings also means that landlords cannot seek court orders to forfeit for non-payment of rent and other related charges, for example, service charges and insurance rent.
The ban period will begin on 26th March 2020 and end on 30th June 2020
To quickly highlight, section 21 allows a landlord to serve a notice to their tenant and evict them, except during the period of the first six months of the tenancy. Under section 8, a landlord may evict their tenant during the fixed term of their lease only if they have breached the tenancy agreement. Therefore, whilst the notice-based steps of eviction may still be carried out, an eviction cannot be enforced through the courts.
What remains the same is that tenants will still have to pay the full rent. At the expiration of the three-month period, court proceedings may be filed by the landlords requiring full payment and eviction.
What can tenants do to protect themselves during the pandemic?
Though the measures aimed to protect vulnerable tenants, the relief appears to fall short of providing the comprehensive protection tenants would have been hoping for. If tenants are unable to pay their rent, they are encouraged to engage with their landlord about it and devise a payment plan.
Tenants should check if their tenancy agreement includes any force majeure clauses. Force majeure clauses protect parties if an unforeseeable event occurs, which is beyond their control and prevents one or both the contracting parties from fulfilling their obligations under the contract. The coronavirus pandemic falls under this category as well.
The government has also announced to place workers on the Coronavirus Job Retention Scheme Workers will be paid up to 80% of workers’ wages. Self-employed workers during this period will also be supported, which should provide relief for tenants.
Does the Coronavirus Act really protect anyone?
In truth, the Act only serves to delay tenants being driven out of their rented property and stops short of avoiding the possibility altogether. Given its temporary nature, they will still be liable to pay the accrued rent once it expires. The Act provides short-term protection, but compounds long-term burden as a result.
On the flip side, if the three-month period were to be increased, it is equally worrisome for landlords as this will mean no income for them for an even more extended period. While the Act ensures a roof over tenants, it ignores resulting long-term financial constraints on both tenants and landlords.
What virus-related measures are other countries taking?
In Spain, evictions are restricted, whereas tenancy agreements expiring during the state of emergency will be automatically renewed. The government introduced a “micro-loan” scheme to enable tenants to pay rents with no interest charged.
In Germany, landlords will not be allowed to terminate lease agreements due to rent debts from the period 1st April 2020 to 30th June 2020. For understandable reasons, this period may be increased.
New York implemented similar measures to the UK government. A three-month moratorium has been implemented on evictions for residential and commercial tenants.
New Zealand passed the Coronavirus Response (Urgent Management Measures) Amendment Act, which enabled rent increases to be frozen and gave protection against tenancy terminations. Landlords cannot terminate tenancy agreements unless the tenant is at least 60 days behind in rent.
What can be the alternative in the UK?
Similar to the actions taken by the Spanish government, an alternate strategy adopted by the UK government could be to subsidise rents or provide zero-interest loans to tenants who are unable to pay their rent.
This will ensure two things. Firstly, the tenants will be protected from eviction and an accumulated rent of three months. Secondly, this will also provide income for landlords to pay their bills.
The government has to place greater importance on the never-ending equation of bills and income and produce a solution accordingly. Hence, the best strategy is to provide aid to tenants as rent payment remains inevitable sooner or later.