I assume that with the Coronavirus, my case is “on hold”?
Absolutely not! Both the Firm and the Courts are very much open for business and have over recent years both invested large amounts in technology which means that we can all work remotely. We can progress claims, issue proceedings, file Witness Statements, deal with Court Directions and attend hearings by way of telephone or video conference. The barristers we use are exactly the same. There may be some delays in final hearings where the Courts want the parties to attend, but the day to day work is very much “business as usual”.
So, I can proceed with any action as I would normally?
Yes, we are speaking with Clients every day on the phone or by video link to take instructions on new cases and discuss tactics on existing matters. If you have anything you wish to discuss, please contact us by phone in the usual way.
But I have heard that I can’t take action to remove my tenant if they stop paying their rent?
Yes, that is correct insofar as the government have introduced a 3 month moratorium for all rented properties. In other words, you can’t start court proceedings at the moment. However, our view is that a discussion regarding the rent during these three months should be had between the parties and if a reasonable repayment proposal can be achieved, then this is better for all concerned than the three months coming to an end and a large debt having accrued. The moratorium will also come to an end at some point, and we take the view that if Landlords use this period to “get their ducks in a row” then as soon as possible, we can take action through the Courts which will, in turn, lessen the financial impact on our Clients.
OK, so I can’t take steps to remove my Tenant for non-payment of rent at the moment, but can I take steps to gain possession of my property for any other reason?
The way the law has been changed at this time appears to indicate that where Notice was to be given to any Tenant to vacate residential property, such notice may now not be for less than three months. As such, Notices can still be served, its just that the notice period is for a longer timescale before court action can be commenced. Unfortunately, it would appear that this is for all grounds of seeking possession, including no fault claims under the Accelerated Possession route, and as such, any possession, be it for rent arrears or not, are going to be affected by the change.
What about my commercial premises? What if I don’t get the rent from my Tenants?
The government has also introduced a three month moratorium on seeking possession of commercial property through forfeiture for rent arrears, undoubtedly in anticipation of their subsequent closure of them. So, unfortunately, if you don’t get rent from your tenants, there may be little you can do until the beginning of July 2020 when, at this time, the moratorium is due to be lifted.
Right, but what if my Tenant comes to me and wants to leave the property? Can they do so whilst I can’t pursue for possession due to rent arrears?
Ultimately, there do not appear to be any new restrictions on the ending of a tenancy or lease by a tenant. If they want to leave before a contractual term has ended, this will still require the agreement of the Landlord. You may refuse to grant consent, thus meaning that all obligations under the term of the agreement are to continue. But, from our understanding, there is no reason you cannot agree a surrender on terms, e.g. if all arrears are paid, or agree a surrender and commence a separate debt action for the monies that are due to you – there are no restrictions on such court actions and these can be commenced at any time.
Can I look to terminate my commercial contract by reference to the force majeure clause?
This is a big question at the moment and one that is set in individual circumstances for each client. As such, each matter is different and each answer will be different. If you feel you need to consider this with us then please do speak with us. It is also worth noting that force majeure will be a contractual remedy, but if the contract is frustrated, we can consider this as an alternative avenue also. It is also worth considering how the present circumstances may interplay with any MAC (Material Adverse Change) or MAE (Material Adverse Event) clauses.
If you have any further questions arising from these points or for any other queries relating to dispute resolution call us now or contact us using our online form and we will help you through this difficult time.
