Staying on track? The new arrangements for possession proceedings

23.09.2020

The stay on possession claims and evictions ended on Sunday, 20 September 2020.

Image of train tracks into distance

However, possession claims will not be administered as they were before the stay came into effect on 27 March 2020.

Over the past few weeks there has been a steady drip of Government announcements, and changes to legislation and the Civil Procedure Rules. This post summarises some of the key points for housing advisors.

My apologies if the following contains previously available information of which readers are already aware. This article is my attempt to gather in one place the most pertinent recent developments. Not least so I can fully get to grips with the nuances myself.

Notice periods

The Government introduced regulations on 28 August 2020 which changed the periods of notice which tenants must be given before an application is made to court for possession.

The new notice periods apply for notices in England which are given on or after Saturday 29 August 2020.

In most cases six months’ notice must be given. However, there are exceptions.

For assured shorthold tenancies (the default type of tenancy granted by private landlords and housing associations), if landlords are using the ‘no fault’ section 21 procedure, at least six months’ notice must be given.

This means that the minimum period for a s.21 notice has incrementally increased as follows:

  • Notice given prior to 26 March 2020 - 2 months
  • 26 March 2020 to 28 August 2020 - 3 months
  • 29 August 2020 - 6 months (Coronavirus Act 2020, Sch.29, para 7).

At the same time, the ‘life’ of a s.21 notice served on or after 29 August 2020 has been extended, so that the landlord must claim possession within 10 months of the date on which the notice was given.

Where a landlord is serving a s.8 notice on an assured tenant because of rent arrears (Grounds 8, 10 and 11), the general rule is that six months’ notice must be given. An exception applies if the rent arrears are equivalent to (or exceed) six months’ rent when the notice is served. In this case at least four weeks’ notice must be given (CA 2020 Sch.29, para 6).

Otherwise the rules are a hodgepodge where the period required depends on the type of tenancy and grounds used.

The rules are a minefield for landlords. Landlords would be well advised to obtain legal advice. The implications of getting something wrong are made worse by the fact that it will take many months to obtain possession.

Private landlords might also want to join the NRLA and take advantage of their excellent advice service for members (unlimited telephone advice for only £75 per year? Bargain!).

The long notice period, combined with existing legal complexities and the delay in obtaining possession, may result in a particularly foul aftertaste for private landlords. It’s quite possible that they won’t find out for the best part of a year that a s.21 notice was never actually valid. I pity the ‘accidental’ landlord who unwittingly fails to give the correct ‘How to Rent’ guide (or falls foul of one of the many other technical rules governing s.21 validity), but doesn’t realise their mistake until the substantive hearing of their claim.

Still, it should provide rich pickings for homelessness teams and tenants’ representatives, including duty advisors at the review stage of the amended possession process (about which see below).

Wales

The position on notices in Wales is similar but thankfully less complex.

The requirement on landlords to give six months’ notice, which commenced on 24 July 2020, is due to expire next week, on 30 September 2020.

However, on 15 September 2020 Julie James AM announced in the Senedd that notice periods will remain at six months until 31 March 2021, with arrangements being reviewed in December 2020.

The Minister confirmed that an exception will apply where a notice is given on grounds of anti-social behaviour or domestic violence. In these circumstances the notice period will revert to the pre-COVID-19 position.

I understand that a formal announcement will be made and regulations laid before the end of September (at the time of writing no regulations have been published on legislation.gov.uk.

It’s worth noting that in due course Welsh tenants are likely in any event to benefit from a right to six months’ notice (subject to successful passage of the Renting Homes (Amendment) (Wales) Bill and implementation of the Renting Homes (Wales) Act 2016*).

The Bill, which seeks to amend the 2016 Act before it comes into force, also aims to prevent a landlord serving notice for the first six months of a tenancy, effectively guaranteeing a 12-month tenancy.

On 15 September 2020 the Minister also confirmed that private tenants in rent arrears will soon be able to apply for the previously announced low interest Tenant Saver Loans. Benefits and debt advice will also be available to private tenants via a helpline provided by Citizens Advice Cymru.

Possession - generally

Applications for possession could still be made during the stay. It’s just that the court were not processing them or progressing existing claims.

An exception arose from 20 April 2020, whereby certain claims were excluded from the stay. Practice Direction 51Z was amended to exclude certain types of claim, namely:

  • Claims against trespassers to which rule 55.6 applies,
  • Applications for interim possession orders, and
  • Applications for case management directions which are agreed by all parties.

The stay on possession claims ended on 20 September 2020. Practice Direction 55C (which, somewhat nonsensically, came into force on 23 August 2020) is now practically in effect.

PD 55C temporarily modifies the existing rules governing possession claims (Part 55) for an “interim period” until 28 March 2021.

In addition, the Master of the Rolls (Head of Civil Justice) issued “Overall Arrangements for Possession Proceedings in England and Wales” (OAPP) on 17 September 2020.

The Overall Arrangements provide a helpful overview of the changes to the administration of possession proceedings, which have been introduced to manage pandemic-related demand.

There is an expectation that no possession claim is issued before a compromise is sought. This expectation does not override the statutory rules governing whether possession must be granted. However, landlords would be well advised to explore alternatives to a possession claim. Settlement should be considered, not least because of the time it will take to evict.

In addition, social landlords and mortgage lenders will want to ensure they can demonstrate compliance with the respective pre-action protocols.

The Government appears to have sensibly abandoned its stated intention to introduce a pre-action protocol for private landlords, at least for the time being.

A system of “case marking” will operate whereby the court can designate that a case is (or is claimed to be) a direct result of COVID-19. Any defendant or private claimant can request that their case is case marked (see OAPP, paras 29-31).

Reactivation

If a possession claim was made before 3 August 2020 the claim will not progress unless it is ‘reactivated’.

It is important to note the date here. There are two types of possession claim for present purposes, namely where:

  1. The claim was made before 3 August 2020.
  2. The claim was made on or after 3 August 2020, or where a final order for possession has been made.

Claims falling into category (1) are caught by the “reactivation notice” requirement (PD55C, 2.1).

Rule 2.1 provides that, unless the court directs otherwise, no stayed claim will be listed, relisted, heard or referred to a judge until one of the parties to the claim files and serves a reactivation notice.

A party – it will usually be the landlord – must confirm to the court (and the other party) that they wish to proceed with the claim. The reactivation notice may be filed and served on or after 21 September 2020.

If the notice was filed before 21 September the Overall Arrangements suggest that the court will deal with it in due course at some point after 21 September (housing lawyers had previously highlighted a risk that a court might return a premature notice or treat it as ineffective, given that reactivation notices arguably did not exist in law until 21 September).

A template notice is available on the HM Courts Service website.

However, as the form of notice is not prescribed by regulations, a failure to use the template is not fatal.

The reactivation notice must:

  • Confirm that the party wants the case to be listed, relisted, heard or referred to a judge.
  • Set out what knowledge the party has regarding the effect of the pandemic on the defendant (except where the proceedings relate to an appeal) (2.3).
  • Be accompanied by a rent account for the previous two years, where the claim is based on rent arrears (except in an appeal) (2.4).
  • Include proposals in respect of directions and hearing dates, where case management directions were made before 20 September 2020 (5.1).

See PD 55C for full details of the requirements relating to reactivation, as the above is a summary.

If a reactivation notice is required but not filed by 4pm on 29 January 2021 the claim will be automatically stayed (2.6). This does not however prevent a subsequent application to lift the stay. Furthermore, an application for relief from sanctions is not required under CPR, r.3.9.

It appears that the courts will not be notifying landlords of the requirement to serve and file a reactivation notice. Landlords without legal representation may be oblivious to the fact that their case is going nowhere.

If the other party does not agree with the contents of the reactivation notice or associated information they must file and serve a response within 14 days.

Effect of pandemic

The requirement for the landlord to confirm what knowledge they have about the effect of the pandemic on the defendant and their dependants also applies to new claims, i.e. those made on or after 3 August 2020 (PD 55C, 6.2)

The danger for a landlord is that if they fail to provide this information the court is likely to adjourn the claim.

The Civil Procedure Rules do not require landlords to make inquiries of tenants prior to confirming their knowledge of the effect of the pandemic on them and their dependents. However, it is perhaps advisable to do so. And it is certainly in the spirit of the non-statutory guidance for landlords, which wisely suggests:

Before taking steps to recover possession of your property, you should consider discussing any underlying problems with your tenant, either directly or through a mediation service, and try to resolve these without recourse to court action. This could save you time and money.

If the landlord is unable to contact the tenant they would be well advised to put their inquiry in writing. And if a landlord has made best efforts to contact the tenant but has been unable to ascertain the effect (if any) of the pandemic, it may be beneficial to confirm this in the reactivation notice.

Conversely, tenants (and their representatives) may wish to notify the landlord of any effects the pandemic has had on them and their dependants.

These new procedural requirements should not affect the statutory rules governing whether the court should grant possession in circumstances where there is a mandatory right of possession (e.g. s.21, Ground 8 rent arrears). However, landlords and their representatives will want to take care, not only that the reactivation notice and confirmation of knowledge complies with the procedural requirements, but that so far as possible, the contents are accurate.

In short, landlords will want to avoid the risk of a (further) delay or adjournment.

Pre-hearing review

The Overall Arrangements confirm a new stage in the possession process. A review date will be held at least four weeks before the substantive hearing.

This applies to both stayed and new claims, and will usually be the first date that is listed.

The review date provides an opportunity to review the claim and for the claimant and defendant to reach agreement where possible. The judge will not be present, and the defendant will have access to free advice from the duty scheme.

Importantly, 14 days before the review date the claimant should:

  • Provide a bundle (copy of all case documents) to the court.
  • Confirm to the court that the documents have been provided to the defendant, and
  • Confirm that they will be contactable on the review date (OAPP, para 49).

On the review date a judge will separately conduct a short review of the documents towards the end of the day. The parties will not be present at this later appointment.

If the parties agree directions or reach an agreement which resolves the case, an agreed order can be drafted for the judge to approve.

Generally, a date for the substantive hearing of the claim will be set on the review date (if not already notified when the court notified the parties of the review date).

No court fee is payable, either in respect of the review date or any order the court makes on the review date.

The Overall Arrangements suggest that the substantive hearing should be 28 days after the review date (para 39).

Another possible outcome of the review date is that the claim is adjourned or dismissed, for example if a landlord’s documents are not in order.

Priority

Clearly, the pandemic poses serious challenges for the court service when administering possession claims. Courts will not simply be picking up where they left off by dealing with applications in the order in which they were made.

Most obviously, there is a large backlog of existing possession claims. There will surely also be an increase in new possession claims. Many landlords will have not lodged claims during the stay, and the economic consequences of COVID-19 will of course also impact on the number of claims in the system (Generation Rent have estimated 55,000 tenants received notice between March and August, a figure disputed by the Government).

The Overall Arrangements introduce new guidance on listing and how claims should be prioritised.

While listing priorities are a matter for the relevant judge at each court, the Overall Arrangements suggest cases should be prioritised where the following are alleged:

  • Anti-social behaviour.
  • ‘Extreme’ rent arrears, i.e. 12 months’ rent, or 9 months’ rent which amounts to more than 25% of a landlord’s total annual income.
  • Squatters, illegal occupiers and persons unknown.
  • Domestic violence (set out in claim and with DV agencies alerted).
  • Fraud or deception.
  • Unlawful subletting.
  • Abandonment, non-occupation or death of defendant.
  • Temporary accommodation allocated by an authority which is specifically needed for reallocation as temporary accommodation (para 43).

Subject to the above, prioritisation will be given to claims issued before the stay commenced on 27 March 2020 (para 44).

There will undoubtedly be claims which arguably fulfil the above criteria, but which may not be prioritised. The most obvious example is where a landlord seeks possession because of rent arrears or anti-social behaviour, but these matters did not form part of the claim, e.g. because the s.21 procedure was used.

No doubt landlords will use the reactivation notice (or, for new claims, confirmation of knowledge of effect of the pandemic) to include additional information, to seek to influence the priority afforded to their claim. Indeed, section 4 of the Government’s template reactivation notice enables landlords to indicate if one of the aforementioned situations apply.

Hearing

Parties will generally not be notified of a hearing date when the court issues a possession claim.

Unsurprisingly, the rule which provided that the court should list the first hearing within 8 weeks (CPR 55.5) is disapplied (PD 55C, 4.1).

Parties must be given 21 days’ notice of any hearing in relation to a claim that was stayed or that is relisted in response to a reactivation notice (PD 55C, 3.1).

In respect of claims made before 3 August 2020 where no possession order has been made, any trial date which was set prior to 27 March 2020 will be vacated, unless a reactivation notice, rent account and updated draft directions can be filed and served 42 days before the hearing (PD 55C, 2.5).

If this is not possible the hearing will be relisted.

Parties will ordinarily be offered a physical hearing. There are three exceptions:

  • The claim is an Accelerated Possession Claim and the existing rules provide for a possession order to be made without a hearing.
  • Where the parties agree (subject to the court) that a hearing is held by telephone or video, or
  • If ‘contingency arrangements’ are required.

If, upon considering an Accelerated Possession Claim, a judge decides that a hearing is required, that hearing will ordinarily be listed as a substantive hearing. However, the judge may direct that a review date is listed, to enable the defendant to obtain legal advice.

The Overall Arrangements suggest that judges will be expected to deal with accelerated claims (which are initially considered on the papers) during any spare time which arises on possession days when slots for substantive hearings are freed up (para 61).

Now I imagine that your average district judge works very hard and is extremely efficient. But I can’t be alone in wondering how effective that arrangement will be in clearing the backlog. At the very least, it reinforces the impression that your bog-standard s.21 cases are likely to be languishing at the bottom of the pile.

As before, it’s important that assured shorthold tenants do not assume that the judge will necessarily identify errors made by the landlord and list the claim for a hearing (not least because the contents of the claim form needs to be checked for accuracy).

Tenants should obtain legal advice at the earliest opportunity. Potential defences should be raised via the Reply Form, which should be returned within 14 days of receiving the possession claim (or 14 days minus the time which has elapsed before 27 March and after 20 September).

The need for the Court Service to facilitate social distancing will greatly reduce the numbers of cases that can be heard on any one day. There will not be “block lists” on possession days for obvious reasons. Furthermore, court centres will generally be allocating the same number of court rooms and days per week to possession proceedings as they did before March 2020 (although additional buildings might be used in future).

The Overall Arrangements give an example of a typical listing for a possession day (see page 13). This provides for 10 substantive hearings. For most courts this is far less than the numbers formerly dealt with under the block list system.

In addition, the typical possession day (as envisaged by the OAPP) includes 10 review appointments, and 45 minutes at the beginning of the day for urgent hearings of applications to suspend, stay, set aside, vary or postpone orders.

It is suggested that 15 minutes will be allowed per hearing with time between for COVID-19 safety measures. A case may be listed for a longer hearing in the usual way, e.g. if required to hear evidence and argument.

Enforcement

14 days’ notice of an eviction is now required in both county courts and the High Court (except for pure trespassers, i.e. not including trespassers who formally had permission; CPR 83.8A(2) and (6)).

Bailiffs may not execute possession orders where the property is situated within an area subject to a local lockdown (Minster’s statement on 10 September 2020).

This means that evictions will not be proceeding in the increasing number of areas that are currently being subjected to local restrictions.

In addition, evictions will not be scheduled from 11 December 2020 to 11 January 2021 “except in the most serious circumstances, such as cases involving anti-social behaviour or domestic abuse.” Guidance will be issued to bailiffs for the above purposes.

Timescales

The Overall Arrangements helpfully provide some indicative dates of when certain events are likely to start occurring (see page 12). These include:

  • 6 October 2020 - Earliest date for evictions where a claimant had already obtained a warrant, and where there is no application to set aside or stay the warrant.
  • 19 October 2020 – First review dates, in relation to cases listed as a priority. First opportunity for many defendants to obtain legal advice via the duty advice scheme.
  • 16 November 2020 – First substantive hearing dates. Again, this will be for the few cases which have been prioritised and landed on top of the pile.

An illustrative timeline for a possession claim is also provided (OAPP, page 12).

Time will tell whether the provisions outlined in the Overall Arrangements, including the stated timescales, are realistic and deliverable. Unsurprisingly there is an explicit acknowledgment that arrangements may need to be revised.

To my untrained eye ‘contingency arrangements’ seems to be the term used to describe measures that might be required to tackle full-on administrative meltdown. The measures that are envisaged as potentially required include additional courts, extra judges and widespread adoption of remote hearings. Remote hearings have thankfully been avoided thus far, given the adverse effects for accessing duty advice.

Mortgage default

Possession claims by mortgage lenders have largely been postponed until 30 September 2020.

On 14 September 2020 the Financial Conduct Authority issued guidance.

Legal advice

The arrangements for duty advice in possession cases have been revised. Non-means tested advice will be available to defendants:

  • 28 days before the substantive hearing (i.e. on the review date) (this is new), and
  • at the substantive hearing (as before).

Apparently, the Legal Aid Agency will also be issuing new contracts to ensure the availability of legal assistance.

MCHLG guidance

The Government has stressed the importance of communication, negotiation, and compromise.

On 17 September 2020 the MHCLG issued four sets of non-statutory guidance for:

NRLA pre action guidance

The NRLA has published a “Pre-Action Plan: Managing arrears and avoiding possession claims”. Their nine ‘golden rules’ provide helpful clarify for private landlords on what action should be taken before serving notice and initiating a possession claim.

Conclusion

As ever when it comes to coronavirus, it’s a case of ‘watch this space’. After years of court closures and underfunding the Court Service has the unenviable task of trying to clear the backlog.

It will be clear from the above that progress will be long, slow and painful for many landlords, not least because further lockdowns have the potential to blow the rickety ship that is civil justice further off course.



*Even before the pandemic the Renting Homes reforms had been significantly delayed. Last year the Welsh Government had committed to implement before the current term ends in Spring 2021. Now the stated intention is autumn 2021. The Government has committed to providing six months for stakeholders before the 2016 Act is implemented, after it’s been amended by the current Bill. In addition, a lot of secondary legislation will be needed. I haven't heard how the required collaboration with HM Courts Service is going regarding forms and procedure. Perhaps we should run a sweep stake on the month in which these long-awaited changes to Welsh landlord and tenant law will actually happen. I don’t know about you, but I’d bet long.

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