Actionable arrears cases defined

The government has defined the parameters where rent arrears possession can proceed in updated legislation.;
Update on arrears

In new legislation which came into effect on the 17th of November, the English government has prolonged the emergency rules that prevent possession orders by the courts until January 11th 2021.

Rent arrears were finally added to the list of exemptions from the ban. However, until now the government had not defined the parameters where rent arrears possession could proceed.

“Substantial” arrears possessions can proceed

The definition of ‘substantial’ by the government has now been given as those who are owing over 9 months’ rent before March 2020.

Concerns are being raised in the landlord community as to how long it will take those cases that fall short of the ‘substantial’ limit to regain possession, and how many tenants will take advantage of this legislation to avoid paying for a further portion of rent.

Ben Beadle, National Residential Landlords Association’s Chief Executive said:

“In trying to arrive at a compromise the Government has failed to help those in genuine need whilst rewarding those whose arrears have nothing to do with the pandemic, and in some cases are wilfully not paying their rent.

“This is doing nothing to help those tenants who are trying to do the right thing and seeking to pay off their debts.

“Instead of prolonging the problem with short-term fixes, the Government needs to urgently bring in a financial package to enable tenants to pay off rent arrears.”

The sentiment, very much echoed around the landlord community, is that this week’s legislation does nothing to address the housing debt accrued since the start of the Covid-19 pandemic, or help those in England whose situation is genuinely affected by the pandemic.

Financial support in other parts of the UK

The rest of the UK is handling rent arrears as the result of Covid-19 differently, which means the impact on potential evictions varies.

Wales is utilising the ‘Tenant Saver Loan Scheme’ to enable tenants to take out a temporary loan to pay rent arrears. Scotland’s ‘Tenant Hardship Loan Fund’ offers a similar function.

Many buy to let landlords could be facing as much as 18-months of rent arrears without sanction, which raises concerns around those purposefully avoiding paying rent.

Other circumstances in which evictions can still take place include where there has been evidence of anti-social behaviour or domestic abuse.

Other barriers to possession
Cancelled court dates and calls for an extended bailiff Christmas amnesty appear to have exacerbated an already challenging situation for some landlords.

This week’s legislation is a step in the right direction toward helping landlords who have been impacted by rent arrears from tenants which pre-date Covid-19, but, there is still a long way to go.

More support has been called for, for landlords who have been struggling through this system since the beginning of the year.

The new legislation can be found on the government website.

This information should not be interpreted as financial advice. Mortgage and loan rates are subject to change.