Enforcement in the Time of Covid - 25 March 2021 - 1 Chancery Lane
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Enforcement in the Time of Covid
25 March 2021
Introduction
One year exactly since Coronavirus Act 2020 received Royal
assent.
Debt Respite Scheme (Breathing Space Moratorium and
Mental Health Crisis Moratorium) (England and Wales)
Regulations 2020 come into force on 4 May 2021.
Colleagues Simon Newman and Chris Pask explaining their
impact in Webinar on 28 April 2021.
25 March 2021Residential Possession
Residential Possession Claims post covid…
(All’s Well that Amends Well)
25 March 2021Legal Framework
1. PD55C
2. Overall Arrangements for Possession Proceedings in England and
Wales [“The Overall Arrangements”]
Primary - Coronavirus Act 2020
Secondary - Public Health (Coronavirus) (Protection from Eviction)
(England) (No. 2) Regulations 2021/164
The Coronavirus Act 2020 (Residential Tenancies: Protection
from Eviction) (Amendment) (England) Regulations 2021 SI
2021/284
The Public Health (Coronavirus) (Protection from Eviction and
Taking Control of Goods) (England) Regulations 2020 SI
2020/1290Coronavirus Act 2020
Schedule 29 – in force until September 2020* (now
extended to 31 May 2021)
1. Prescribes new notice periods
Rent Act, Secure Assured Tenancies (inter alia)
2. Modifies prescribed Forms (e.g.3 and 6A)
Sets out procedure for amendmentsThe Coronavirus Act 2020 (Residential
Tenancies: Protection from Eviction)
(Amendment) (England) Regulations 2020
Amend Sched 29 CA 2020
from 28 August 2020New Notice Periods HA 1988
Generally 6 months except:
Ground 14 (alone or with any ground other than 7A) – at once
Ground 14A, 14ZA or 17 (without Ground 7A or 14) – 2 weeks
Ground 8, 10 or 11 (without Ground 7A or 14) where ‘at least 6 months rent
is unpaid’ at service of the notice – 4 weeks
Ground 7A (with or without other grounds) – 1 month
Ground 7 or 7B (without Ground 7A or 14) - 3 months
Section 21 Notices 6 monthsThe Coronavirus Act 2020 (Residential
Tenancies: Protection from Eviction)
(Amendment) (England) Regulations 2021
Extends ‘relevant period’ in CA 2020 Sched 29
to 31 May 2021 (as PD55C)
(that’s it)Public Health (Coronavirus) (Protection from
Eviction) (England) (No. 2) Regulations
2021/164 - ENFORCEMENT
2.—(1) Subject to paragraphs (2), (3), and (5), no person may attend at a
dwelling house for the purpose of—
(a)executing a writ or warrant of possession; or
(b)delivering a notice of eviction.
EXCEPTIONS: The ASB etc grounds
Where
i. an order is made wholly or partly based on arrears (Gr1 HA 85, Gr
8,10,11 HA88) and
ii. There are arrears of 6 months or more
(Reg 2(3)) – previously 9 months pre 23 March 2020
Q: 6 months’ arrears at what date(s)?ENFORCEMENT (2) NB: If the order is made on s21 Ground it cannot be enforced even if there was the required level of arrears (The Corporation of the Trinity House of Deptford Strond v Prescott and Byrne [2021] EWHC 283 (QB)) [The Master Wardens and Assistants of the Guild Fraternity of the Brotherhood of the Most Glorious and Undivided Trinity and St Clement in the Parish of Deptford Strond Commonly Called the Corporation of the Trinity House of Deptford Strond v Dequincy Prescott, Clodagh Byrne] Ensure the Order records the ground and level of arrears
Where are we currently? Evictions stayed until 31 May 2021 – BUT changed exceptions New Versions of Forms 3 and 6A ‘New’ periods for notices continue
Non-possession issues for landlords The repairing obligation is unchanged – revised non- statutory guidance Gas safety – more revised non-statutory guidance states if the tenant is self-isolating, the gas safety check may be postponed until it is safe to carry it out, unless there is a direct risk to the tenant or their household. (Q: where does that leave the landlord’s obligation re s21 Notices?)
Situation on the Ground Different approaches between county courts? R and S hearings largely consistent Remote / face to face hearings less so Covid marking/prioritisation … hard to say! A practical point: courts appear to be answering the phone less But generally dedicated possession email addresses (on Orders)
L&T – Non-residential restrictions
Forfeiture for rent arrears - s.82 Coronavirus Act 2020
Prevents enforcement of a right of re-entry or forfeiture
under a “relevant business tenancy” for the non-payment
of “rent” during the “relevant period”
"rent" includes any sum a tenant is liable to pay under a
relevant business tenancy
25 March 2021L&T – Non-residential restrictions
Forfeiture for rent arrears - s.82 Coronavirus Act 2020
“relevant business tenancy”
(a) a tenancy to which Part 2 of the Landlord and Tenant
Act 1954 applies, or
(b) a tenancy to which that Part of that Act would apply if
any relevant occupier were the tenant
“relevant occupier” a person, other than the tenant, who
lawfully occupies premises which are, or form part of, the
property comprised in the tenancy
25 March 2021L&T – Non-residential restrictions
Forfeiture for rent arrears - s.82 Coronavirus Act 2020
s.23 Landlord and Tenant Act 1954
(1) Subject to the provisions of this Act, this Part of this
Act applies to any tenancy where the property comprised in
the tenancy is or includes premises which are occupied by
the tenant and are so occupied for the purposes of a
business carried on by him or for those and other purposes.
(2) In this Part of this Act the expression “business”
includes a trade, profession or employment and includes
any activity carried on by a body of persons, whether
corporate or unincorporate.
25 March 2021L&T – Non-residential restrictions
Forfeiture for rent arrears - s.82 Coronavirus Act 2020
“relevant period”
From date the day after Act came into force - 26 March
2020.
Period has been extended by three months at a time.
Period will be extended to 30 June 2021 from 31 March
2021 when Business Tenancies (Protection from Forfeiture:
Relevant Period) (Coronavirus) (England) Regulations
2021/283 come into force.
25 March 2021L&T – Non-residential restrictions
Forfeiture for rent arrears - s.82 Coronavirus Act 2020
Prevents court making an order for possession in existing
proceedings to take effect before the end of the relevant
period
s.82(4) to (6) – High Court
s.82(7) to (10) – County Court
25 March 2021L&T – Non-residential restrictions
Forfeiture for rent arrears - s.82 Coronavirus Act 2020
s.82(2) – During “relevant period” waiver of right to forfeit
for non-payment of rent can only arise by an express
waiver in writing.
25 March 2021L&T – Non-residential restrictions
Commercial Rent Arrears Recovery (“CRAR”)
Tribunals, Courts and Enforcement Act 2007
s.77 – CRAR not exercisable unless the net unpaid rent is at
least a minimum amount
Normally 7 days –
Taking Control of Goods Regulations 2013/1894 reg. 52(1)
25 March 2021L&T – Non-residential restrictions
Commercial Rent Arrears Recovery (“CRAR”)
Taking Control of Goods (Amendment) (Coronavirus)
Regulations 2020/1002
Came into force on 29 September 2020
Reg. 52(2) – during “relevant period”
276 days’ rent where notice of enforcement given / goods
are taken control of on or before 24 December 2020
366 days’ rent where notice of enforcement given / goods
are taken control of on or after 25 December 2020
25 March 2021L&T – Non-residential restrictions
Code of Practice for commercial property relationships
during the Covid-19 pandemic
Voluntary code and does not change the underlying legal
relationships
Encourages parties to recognise mutual interest in business
continuity and the possible advantages of negotiating new
arrangements.
25 March 2021Insolvency
1. Winding up petitions
– Creditors are prevented from petitioning on the basis of
statutory demands made between 1 March 2020 and 30
June 2021 (extended only yesterday from previous 31
March deadline); also generally restricted from petitioning
unless Covid has had no financial impact on debtor, or “but
for” Covid, the debtor would have been in the same
position;
2. Termination clauses in supply contracts
– Suppliers prevented from relying on termination clauses
which engage on insolvency or breach of contract. Must
now continue to supply, even where there are pre-
insolvency arrears (n.b. exceptions: financial services
companies and small entities). Suppliers can apply to court
for permission to terminate on grounds of hardship (also
now extended to 30 June 2021);
25 March 2021Insolvency
3. Relaxed entry requirements to new
Moratorium procedure
– Waived requirement that company subject to a
winding up petition must obtain a court order to
obtain a moratorium; relaxed requirement for
monitor’s assessment of likelihood that a moratorium
will rescue company as a going concern; relaxed
requirement that company must not have been
subject to insolvency process in the previous 12
months; certain companies carrying on regulated
financial activities which would otherwise be
ineligible are eligible. Also yesterday extended to 30
September 2021;
25 March 2021Insolvency
4. Wrongful trading
– IA 1986 allows liquidators and administrators to
apply for a declaration that directors are liable to
personally contribute to the assets of the company
where directors have allowed company to continue
trading beyond the point at which insolvency
procedure was inevitable. CIGA 2020 provides that
the court will not take into account losses incurred
during the period in which businesses were suffering
from the impact of the pandemic. Initial suspension
ran from 1 March – 30 September 2020, then re-
introduced from 26 November 2020 – 30 June 2021
(also extended just yesterday from previous date of
30 April).
25 March 2021L&T – Non-residential problems
Does L want possession anyway?
•What would L do with property is it was recovered?
•Liability of business rates?
•Can T benefit from government support?
Why might L want possession?
•To prevent damage to property
•Redevelopment
•Pre-empt insolvency process
Will an injunction do?
25 March 2021L&T – Non-residential problems
Is there a “relevant business tenancy”?
Are the premises occupied?
Pointon York Group Plc v Poulton [2006] EWCA Civ 1001
Are the premises occupied by a “relevant occupier”?
Proceedings or peacable re-entry?
25 March 2021L&T – Non-residential problems
Rent concessions, AGAs and s.17 notices
Will a rental concession release a surety?
Is the concession contractually binding?
MWB Business Exchange Centres Ltd v Rock Advertising Ltd
[2016] EWCA Civ 553
Does the AGA allow L to give time for payment?
When does a s.17 notice need to be served?
When doe the “charge become due”?
Scottish & Newcastle v Raguz (No. 2) [2008] UKHL 65
25 March 2021Insolvency
1. Debtor Travel company, badly hit by pandemic.
• Can it enter moratorium?
• Can creditors petition to wind up?
• Supplier obligations?
• Director duties/liabilities?
2. Bicycle company
• Boom in sales during pandemic;
• Financial difficulties attributable to poor management/fraud;
3. Financial services company
• Eligible for moratorium?
• Wrongful trading considerations?
• Supplier obligations?
25 March 2021Enforcement
Q&A …
25 March 2021Zachary Bredemear
zbredemear@1chancerylane.com
Richard Cherry
rcherry@1chancerylane.com
Conor Kennedy
ckennedy@1chancerylane.com
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