Annex: Draft Coronavirus (Protection of Assured Tenants) Bill
Explanatory Notes
Overview of the draft clauses
1)The draft clauses would allow the courts to choose whether to order private tenants to give up possession of their homes in two situations where normally such orders are mandatory. Those situations are:
- high rent arrears (usually 8 weeks or 2 months’ rent)
- the end of an assured shorthold tenancy.
Territorial application of the draft clauses in the UK
2)The draft clauses would extend to England and Wales, which is a single legal jurisdiction. But housing is a matter within the legislative competence of the National Assembly for Wales, and the clauses would therefore apply only in relation to tenancies in England.
Commentary on the draft clauses
3)The draft clauses relate to assured tenancies only. These are tenancies under the Housing Act 1988. The court would have a new discretion when considering ordering possession under:
- Section 8 of the 1988 Act on the basis of Ground 8 in Schedule 2
- Section 21 of the 1988 Act
4)All (relevant) possession proceedings are currently stayed until late June 2020. The draft clauses would change the powers of the courts temporarily, once they start hearing possession proceedings again. The new powers would apply at hearings which take place between their enactment and the end of 2020. This is a temporary change. The legislation could (though the draft does not) include power for the Government to extend this period.
Clause 1: Application
5)This draft clause would ensure that the new powers apply at any court hearing in period between enactment of the clauses and the end of 2020. It introduces the main clauses (2 and 3) and defines what is meant by the 1988 Act.
Clause 2: Higher rent arrears: court discretion
6)This draft clause would require the court to read the 1988 Act as if Ground 8 were in Part 2 of Schedule 2 rather than Part 1. Under section 7 of the 1988 Act, if a ground appears in Part 1, the court must make an order for possession (except in very limited circumstances). If a ground appears in Part 2, the court has a discretion to order possession, if it considers it reasonable to do so.
7)The draft clause would require a court, when deciding whether it is reasonable to order possession, to give particular thought to the extent to which the arrears (or any part of them) were caused (or contributed to) by the coronavirus.
8)Reading the 1988 Act as if Ground 8 were in Part 2 of Schedule 2 would also mean that the court would have the extended discretion (set out in section 9) to adjourn proceedings, or to suspend or postpone possession, on condition the tenant pays towards the rent and arrears (unless this would be unreasonable or cause exceptional hardship).
9)The clause would allow a court to dispense with the need for a notice where it is just and equitable and ground 8 is relied on. The court has this power for most other grounds but not for high rent arrears. However, if possession is no longer mandatory, allowing the court to grant possession in the absence of a notice (but only where this is fair) strikes an appropriate balance.
10)The draft clause ensures that nothing it contains affects the validity of a notice. This ensures that a notice is not invalid because, for example, it refers to Ground 8 as a mandatory ground for possession (as does the currently prescribed form). It may be that the Government would prescribe new forms.
Clause 3: Expiry or termination of assured shorthold tenancies: court discretion
11)This draft clause would deal with situations where a landlord seeks possession because of the expiry or termination by notice of an assured shorthold tenancy. Normally, the courts must grant possession if a landlord has served the right notice (often known as a “section 21 notice”) at the right time. The draft clause would operate by instead giving the court a discretion to order possession if satisfied that this would be reasonable.
12)The draft clause would also give the courts the extended discretion in section 9 (to adjourn proceedings or suspend or postpone possession) in these cases.
13)As with clause 2, this clause would require a court, when deciding whether it is reasonable to order possession, to give particular thought to the extent to which any arrears (or any part of them) were caused (or contributed to) by the coronavirus. But it would also require the courts to consider whether the landlord was motivated to seek possession because of rent arrears.
Clause 4: Meaning of coronavirus and associated expressions
14)This draft clause defines what is meant by coronavirus (using an existing statutory definition) and explains that rent arrears should be considered to have arisen because of coronavirus:
- regardless of whether a tenant has had the virus
- where the arrears have built up or not been reduced because of the virus
- whether the virus was the only cause or just one factor
- whether the virus directly or indirectly (perhaps, for example, because of legislative measures to control the spread of the virus) caused the arrears
Clause 5: Extent, commencement, expiry and short title
15)The draft clauses would extend to England and Wales. This is the legal “jurisdiction” (or body of laws) which the changes to the law would form part of. The changes would only have any practical effect in England. They would come into force when enacted and would expire at the end of 2020, after which at any hearing of possession proceedings the court would apply the law as it stands at the moment.
Published: 22 May 2020