A leading property law firm says the government’s ‘eviction ban by the back door’ means many buy to let properties are likely to be repossessed in the coming months.
The government claims there is no overall eviction ban because courts are still open and possession cases can still be heard. However, it has also said that there there will also be a moratorium on all evictions during lockdown, over the Christmas period running from December 11 to January 11, and thereafter in areas designated for Coronavirus as tiers 2 or 3.
“It means that even though the courts will process residential possession claims, up to and including a possession hearing, but tenants will not be evicted for an indefinite period” says the property litigation firm Hagen Wolf.
A statement from the company says: “Given that areas can be moved into Tier 2 or 3 overnight, this in practice means no evictions for the foreseeable future. However, that could change if the Lord Chancellor seeks to impose legally dubious exceptions. Good luck evicting anyone right now, or for the foreseeable future, whatever the reasons.”
Even more ominously, the firm says that for many landlords, who are already entering month 10 of no rental income following the earlier eviction bans, these further delays could prove a bridge too far.
“The goodwill of mortgage lenders will only stretch so far. Without further government support or regulation, we anticipate an increase in the numbers of banks taking possession of buy to let properties, either through the courts or via Law of Property Act receivers. Fortunately, rights to a further three months mortgage holiday have been announced if lenders apply quickly, but this means bigger mortgage payments going forwards” the firm states.
Now the company is urging landlords to speak to their lender and tenant about the situation.
“If the lender agrees to a payment holiday, it may create some breathing room, and a tenant may agree to vacate the property and surrender the tenancy. Doing so will allow the property to be to re-let. Be wary of having an empty property for which you have not only mortgage obligations but also council tax and utilities” it advises.
It says the alternative is for the landlord to focus on recovering arrears from the tenant, rather than possession of the property.
“There are no restrictions on applying for a County Court Judgment against the tenant, and it can be reasonably quick to apply using the Money Claims Online system” says Hagen Wolf.
“However, trying to enforce any CCJ then to recover the money may prove difficult as bailiffs agree not to enter properties in Tier 2 or Tier 3, or during a lockdown, to recover goods under a writ of control, and if the tenant is unemployed or has no assets your options will be severely restricted.”
The current situation arose because on October 21 - in news given relatively little publicity at the time - the Lord Chancellor and Secretary of State for Justice, Robert Buckland QC MP wrote to bailiff organisations asking them not to undertake any evictions in areas that have been classified as Tier 2 or Tier 3 under current Covid alert systems.
On November 5 he wrote a further letter asking bailiff organisations not to undertake any evictions during the lockdown unless these were cases relating to illegal trespass, squatters, nuisance or antisocial behaviour, domestic abuse, fraud or deception and properties unoccupied following the death of a tenant.
“How bailiffs are supposed to know the story behind individual evictions is unclear” says Hagen Wolf.