The Law Society has welcomed another extension to the ban on evictions - but warned that more tenants could still be made homeless as rent arrears build up.
The government announced yesterday that the ban on bailiff enforced evictions, which was due to end this month, will be extended to 31 May. The requirement for landlords to provide six-month notice periods to tenants before they evict will also be extended until the end of May. Court arrangements and rules introduced last September will be extended to the end of July.
Law Society president David Greene welcomed the news that some tenants who are struggling will be able to stay in their homes until the summer. ‘However, it should be noted that those with significant rent arrears are exempt from the ban, and, as time goes on, it’s likely that more tenants will be evicted as a result of increasing amounts of overdue rent. Eventually, fewer tenants will be protected by the ban and may become homeless,’ he said.
‘When the government begins to taper off these measures on 1 June, it needs to ensure protection is given to both tenants and landlords and ensure legal aid is available to as many tenants as possible.’
Elizabeth Oxendale, an associate in the property litigation team at London firm Forsters, said the government appeared to be ‘kicking the can down the road’.
She said: ‘The exemption for six months' arrears only applies in specific scenarios, and many landlords' claims against tenants do not fall within these rigid criteria. They are now unable to evict tenants who have very significant arrears which may have accrued well in advance of the pandemic. When the ban does finally end, tenants who have fallen into arrears as a result of the pandemic will now find themselves in a worse position.’
A ban on commercial evictions is being extended until the end of June.
Scott Goldstein, a partner at Payne Hicks Beach, said: ‘[The government’s] approach has been that lockdown is a greater threat to tenants than to landlords, but whereas tenants will often walk away from a lease, landlords may have a longer term interest in a property and will suffer severe harm to their businesses if the rent is not paid.
'Some businesses have done well during lockdown and it is not right that they can take full advantage of an eviction ban. The current code of practice rightly encourages dialogue between both sides but landlords are forced to make the most concessions because tenants know that they cannot be evicted or made insolvent. The government should act to address the balance by penalising tenants (especially large occupiers) who do not pay where they have the funds to do so.'
Chloe Benson, a senior associate in Goodman Derrick's real estate team, said: 'Tenants should utilise this time to negotiate with their landlords and to ensure that they have certainty for their business once the moratorium is lifted. Tenants will want to focus on re-opening their businesses and the prospect of a dispute with their landlord and possible forfeiture action hanging over them will simply be a burden which no tenant wishes to encounter.'
The government says it is supporting commercial landlords and tenants to agree their own arrangements for paying or writing off rent debts by 30 June. It has issued a call for evidence on commercial rents to monitor the progress on negotiations.