Comment on government’s proposed emergency legislation to prevent the eviction of tenants

Mark Steggles, partner at law firm Thomson Snell & Passmore comments on the government’s proposed emergency legislation to prevent the eviction of tenants.

“The government has announced that it intends to pass emergency legislation to prevent landlords from starting proceedings to evict tenants for at least a 3-month period in the light of the coronavirus outbreak. The purpose behind the legislation is to take the pressure off tenants who cannot afford to pay rent as a result of not receiving any income in the current climate.

“Responding to concerns about the impact this may have on landlords, the government confirmed that the 3 month mortgage payment holiday plans announced earlier in the week will now be extended to landlords whose tenants fall into the above category, such as landlords with buy-to-let mortgages. This avoids the financial pressure being passed from the tenant straight to the landlord and is a shift in government policy.

“The obvious concern is that this doesn’t solve the issue; it simply pushes the issue down the road for 3 months. To combat this, the government suggests that the legislation will provide that after the 3-month period has expired, landlords and tenants will be expected to work together to establish an affordable repayment plan taking into account the tenants’ individual circumstances. Further guidance on this point will follow.

“It appears that possession proceedings that have already been issued will still continue (albeit access to the court for hearings may well be restricted in the coming months) but even if possession orders are obtained, enforcing such orders may prove difficult. It is also currently unclear whether this legislation will extend to possession proceedings that are unconnected to payment of rent e.g. if the tenant is causing a nuisance.

“The measures proposed by the government will come as a relief to tenants and the fact that the measures for mortgage holidays will also be extended to Buy to Let landlords is sensible. However, this approach risks storing up trouble when this crisis is over because the interests of the tenant, the landlord and the lender will conflict at that time”.

Kindly shared by Thomson Snell and Passmore LLP