Since early in the Covid-19 crisis there has been a stay on residential possession proceedings in the courts. This means that all existing possession proceedings were stopped in their tracks and any new proceedings that were issued were processed initially and then similarly stayed. The stay is expected to come to an end as from 24 August 2020.

There has been some understandable scepticism about the stay actually ending on 24 August. That the stay was extended at short notice from its original end date at the end of June has not helped. However, the situation is somewhat different this time. First, there have been clear statements in parliament that the stay will end on 24 August. Second, and more tellingly, new court procedural rules have already been put in place and they are due to come into force the day before the stay ends, on 23 August. The machinery to deal with the stay ending in August has therefore been put into place.

Proceedings after the end of the stay

Once the stay is lifted, the new procedural rules will come into effect in respect of restarting existing stayed cases, as well as in respect of new cases that are to be commenced. One of the key problems for many claimants will be that cases which have not already had a possession order made will remain stayed until such time as one of the parties involved gives a reactivation notice to the court and the other party setting out what they require the court to do and also any effects on the tenant caused by the pandemic.

In addition, if a possession claim is based on rent arrears there is a requirement to provide a two-year schedule of payments 14 days before the hearing to the court and the defendant. Without this the hearing will be de-listed.

Finally, there is a requirement to provide further copies of all of this material at a hearing along with notices confirming compliance with any pre-action protocol applicable to the proceedings, such as the protocol for social landlords or the protocol for mortgage repossession.

Considering Covid-19 effects

The next major concern is what the court is actually supposed to do with information about the effects of Covid-19 on a defendant. The underlying law is not being changed and so courts do not gain any new powers. Instead, they gain more relevant information. But this can only be exercised within the current discretion they have.

So, for example, a court dealing with a landlord’s claim for possession under section 21 of the Housing Act 1988 has no discretion. If the notice is valid possession must be given, if it is not valid then possession must not be given.

Thus, knowing about the effects of Covid-19 on the defendant provides little benefit to the court. Likewise, in relation to a mortgage, the basic consideration that the mortgage term should not be extended and, taking into account this fact and the overall debt, the realistic prospect of the occupier paying the mortgage down within the term remains unchanged.

While the fact of problems caused by Covid-19 will provide an explanation for the debt and in some cases will give confidence that the mortgagor’s income will improve as they return to work, it cannot change the overall test. If the mortgage has become unaffordable and there is no prospect of recovery, that this was caused by Covid-19 is irrelevant.

Breathing space

It is hard to avoid the conclusion that the court service is setting up a series of largely procedural hurdles to possession proceedings, mainly for the benefit of local and national government. The fact that there are apparently no plans to update claim forms and guidance to make the new requirements clear only endorses this view.

Next steps

Claimants should recognise that they need to make sure that their paperwork is exquisitely correct and that they comply with all the new time limits. If they do not, they can expect cases to be adjourned or dismissed summarily. Given that the courts will be facing a large backlog of cases that will not be cleared quickly, alternative options should also be considered, whether that is a deal, a mediated settlement or a claim for debt.

David Smith, partner, JMW Solicitors LLP