In response to the CoVD-19 pandemic, the Government has made various changes designed to prevent the tenant/mortgagor from becoming homeless:
The steps taken by the Government do not change the obligation to pay rent/mortgage nor any interest which is payable.The tenant/mortgagor remains liable for this and it should be paid in the usual way. However, the Government has encouraged tenants to speak with their landlord/lender if they are having difficulty in meeting their rental/mortgage payments, with a view to working together to put in place (if possible) a rent payment scheme/mortgage holiday.
What can a landlord do?
The landlord may wish to agree a payment plan, however:
What can a lender do?
A lender should, where possible, agree a mortgage holiday. If this is not possible, the lender may still instruct an LPA Receiver. However any such action is not encouraged by either the Government or, where the mortgage is regulated by the FCA. Alternatively, the lender cold wait until the moratorium is lifted and apply for possession in the usual way.
The Government is considering:
On 19 June 2020, the Government announced that it will be making an amendment to the Corporate Insolvency and Government Bill extending the temporary ban on the use of statutory demands and winding up petitions until 30 September 2020.
A landlord/lender can still take action, However, any such action is not encouraged by the Government or, in relation to lenders, the FCA. Should the landlord/lender wish to apply for possession once the moratorium is lifted, it may take some time for the proceedings to progress through the county courts.
With regard to landlords, there is a concern that:
Meanwhile, landlords must ensure that they maintain the property occupied by the tenant and carry out any necessary repairs as otherwise he could be in breach of the terms of the Tenancy Agreement and also s.11 of the landlord & Tenant Act 1985.
This article is not a substitute for legal advice. Should you require assistance in relation to property litigation issues, please contact a member of Axiom Stone’s Property Litigation team:
Toby Matthews, Senior Associate Tel No. 0203 827 6107 Email: TM@axiomstone.co.uk
Mira Arezina, Associate Tel No. 0203 827 6100 Email: MIA@axiomstone.co.uk