Covid-19 has impacted life in countless ways. While the initial lockdown period is now behind us, more local lockdowns are still being declared in order to dampen sharp rises in cases. This presents a few practical problems for businesses operating in these areas. Landlords who had been intent on evicting tenants might find themselves unable to do so.
During the initial phase of lockdown, the Coronavirus Act 2020 enacted sweeping change across a whole range of UK law. Among the measures was an extensions to the period before landlords could begin legal action to evict tenants. Instead of waiting two months, they had to wait three.
A ban on rental evictions came into force, and was extended three times. The third of these extensions, announced in august, would be effective until September 21st, and also required that landlords provide tenants with six months notice – which effectively means no evictions until March 2021.
What about Lockdown Areas?
More specific restrictions apply in lockdown areas. If there’s a restriction on gathering in homes, then bailiffs will not be allowed to step in and evict.
What about Christmas?
All of this means that there’s a backlog of problem tenants of the sort that landlords would have ideally evicted. It follows that, when the ban is lifted, these tenants will be evicted en masse in a short space of time. Looking to avoid the negative optics that comes from this ugly event occurring over Christmas time, the government has said that evictions will not be permitted over the festive period. The only exceptions here are in cases where domestic abuse is a factor.
The Housing Secretary, Robert Jenrick, summarised the problem: “It’s right that we strike a balance between protecting vulnerable renters and ensuring landlords whose tenants have behaved in illegal or antisocial ways have access to justice.”
As such, tenants who have displayed antisocial behaviour, fraud, or other criminality, can still be evicted under a section eight notice.
Section 8 & Section 21 Notices
Landlords can evict tenants by issuing section-8 or section-21 notices. The latter is often called a ‘no-fault eviction’, as it contains no requirement that a reason for the eviction be provided. However, this changed in June – landlords must now provide details about how the tenant might have been effected by the lockdown (and the virus itself).
Section eight notices already require that the landlord have a reason to evict – and this still applies.
Rent Guarantee Insurance
The upshot of all of this is that Landlords are faced with a potential loss of income. Incomes have been widely depressed by the lockdown, and thus many renters have fallen behind. According to research from StepChange, a debt charity, around 590,000 tenants in the UK are in debt, which works out at just over £1,000 per household. Of these, according to housing charity Shelter, 120,000 have been handed an eviction notice. In these cases, many of the landlords may be acting illegally – and thus they’d be wise to reconsider.
Landlords are inherently exposed to risk. This risk can be offset through insurance. For example, if a tenant damages a property, an insurer might be able to step in and cover the cost. But there are also insurance products which guarantee rent even if the tenant can’t provide it. During this crisis, and crises which might arise in the future, landlords can look to this kind of protection to safeguard their income.