Property litigation weekly update
This week's bulletin reports on residential eviction procedures and the new right to manage regime alongside further insight from around the firm and some positive news. After nearly 5 months of our weekly updates, our bulletin will be taking a short summer break and will return in September! We look forward to updating you then.
Lifting the stay on residential evictions – what do Landlords need to know?
From 24 August, landlords of residential property in England and Wales will again be able to initiate or proceed with pre-existing eviction procedures against tenants, following the lifting of the stay on evictions introduced in March as a result of the Covid-19 pandemic.
With this date looming, landlords in the sector should note:
- Despite the ban on evictions, (unless otherwise agreed) rent has still fallen due during the period of the stay;
- Last week the Scottish Government outlined plans to extend the ban on evictions by 6 months. Whilst there have been calls in England for a further extension, it does not appear that the stay will be extended;
- The anticipated Pre-Action Protocol in respect of private rented sector evictions has yet to materialise. However, the Master of the Rolls' working group is inviting landlords to sign up to a "public pledge" to pursue only priority cases (such as those involving anti-social behaviour, domestic abuse, rent arrears pre-dating Covid-19, tenancy fraud, unlawful subletting or abandonment) from 24 August to 31 October. This is designed to send a clear message that landlords should continue to sustain a tenancy as far as possible, and not seek possession from those who have faced Covid-19-related economic hardship;
- The new temporary Practice Direction 55C comes into force on 23 August 2020. We summarised PD55C and how possession claims are to be progressed in a previous edition accessible through this link;
- There is likely to be a fairly lengthy backlog in the County Courts once the stay is lifted – landlords may have a long wait for a hearing, in whatever form that may take; and
- It seems likely that the information provided in a Reactivation Notice will be used to triage cases and will be reviewed by a Judge prior to listing, although we await publication of the working party's report on how these cases are to be dealt with.
We will keep you posted on any further significant developments, and please contact us if you need any assistance navigating the new rules.
Expansion and control - the new right to manage
The right to manage regime set down in the Commonhold and Leasehold Reform Act 2002 has been fraught with complications and issues for leaseholders exercising their right. The recent report by the Law Commission sets out proposals to reduce costs, widen availability and make the process less complicated, mirroring the enfranchisement proposals.
Whilst the proposals will be a welcome prospect for leaseholders, landlords are set to lose further control and costs recovery in a claim whilst having additional obligations.
The Law Commission report sets out a number of expansions to the right to manage, which include:
- The inclusion of houses, by making the right available to 'residential units' with less strict requirements for a building to qualify
- Clarification that shared ownership leaseholders can qualify with less than 100% ownership
- Multi-building claims on estates are proposed, with the selection of buildings determined by a single RTM Co
- Simplification of the notice serving procedure and more robust rights to information for leaseholders
From a practical point for landlords, the potential new issues include:
- Right to manage costs cannot be recovered through the service charge with litigation costs borne by the parties
- Control over consent for assignments, underletting, charging and crucially alterations will all rest with the RTM company, with the landlord's right reduced to a right to receive notice and object
- Landlords may have a duty to reconcile service charge accounts prior to the acquisition of management and be bound to pay over uncommitted service charges on the day of acquisition
- Insurance is to be obtained in the joint names of the landlord and RTM company
When considered in light of the enfranchisement regime reforms proposed, the prospect of freehold ownership for an investor is perhaps becoming less attractive. New avenues may be opening up for leaseholders who aside from wanting to control management, can seek to eradicate landlord's consent fees with less of a fight.
Further information as to the enfranchisement reforms can be found here and for advice about the reforms or enfranchisement in general please contact enfranchisement specialist, William Bethune.
Insight from around the firm
- The draft Building Safety Bill is the Government’s legislative response to the Grenfell Tower fire and Dame Judith Hackitt’s review of the building industry, “Building a Safer Future” – read our Essential guide to the draft Building Safety Bill.
- With the 23 September 2020 deadline fast approaching, public sector bodies have limited time to comply with the Public Sector Bodies (Websites and Mobile Applications) (No.2) Accessibility Regulations 2018 and ensure their websites are appropriately accessible – read our article here.
- Kenyan wildlife officials have reported a recent elephant baby boom. The Kenya Wildlife Service has reported that the nation’s elephant population has more than doubled since 1989, partly as a result of better management of poaching. This year, thanks to some heavy rainfall and reduced international travel, there has been a marked 'baby boom'.
- The Global Wind Energy Council has predicted that offshore wind energy capacity will grow eightfold by 2030, which could create 900,000 jobs over the next decade.
- New Alzheimer's research suggests that a blood test could detect the disease years before symptoms - important because early treatment can halt or greatly reduce its progress. More research is needed but early studies are positive.
- Morrisons has started trials to replace plastic 'bags for life' with paper alternatives in all of its shops.