My last article a couple of months ago dealt with the position regarding possession proceedings in respect of residential tenancies. Since that time there has been significant change, and it is now worth comparing the current position in respect of possession proceedings relating to residential tenancies and commercial tenancies.
The moratorium on evictions in residential tenancies has been lifted. The restrictions on seeking possession of property where a tenant is in rent arrears have been somewhat eased.
Notice periods of intended possession proceedings, where rent arrears are involved, have been reduced from six months to four months, except where at least four months’ rent arrears are due and owing – in that situation, the notice period runs for four weeks only. From 1 August it is intended that the longer notice period will be reduced to two months.
The obvious result of this is that residential tenants no longer have the degree of protection from eviction they had before 1 June 2021. It should still be borne in mind though, that there is likely to be a backlog in the courts dealing with possession claims and subsequent evictions.
If the situation regarding possession of residential tenancies suggests the start of the return to what was once normal, the situation regarding possession of commercial tenancies suggests the opposite.
The current position is that landlords cannot enforce forfeiture of a lease and eviction of the commercial tenant for non-payment of rent and cannot use the Commercial Rent Arrears Recovery procedure unless there are at least 18 months of rent arrears in play. While the current restrictions run until 30 June, the Government has announced an intention to extend the restrictions to 25 March 2022.
It has further been stated by the Government that it intends to introduce legislation which allows for specific rent arrears, accruing due to tenant business closure during the pandemic, to be ringfenced.
The landlord and tenant will be required to try and reach an agreement over those ringfenced arrears (in respect of possible write-off of debt, repayment schedules etc), and compelled to attend an arbitration to achieve a legally binding settlement if no voluntary agreement can be made between them.
We now seem to have a slightly odd, contradictory situation. The position regarding commercial tenancies is obviously designed to support businesses and its employees and workers, to help them recover from the impact of the pandemic.
That ‘protective’ logic is not entirely surprising. The same logic, however, does not seem to apply now to residential tenancies (and so often to those same employees and workers). Residential landlords are likely to be happier than their commercial counterparts at the current time.
For further information please contact d.keeling@bellbuxton.co.uk, visit bellbuxton.co.uk or call 0114 2495969.
