Coronavirus Act 2020: What are the implications on tenancy?

May 1, 2022 3:59 pm Published by

The Coronavirus Act 2020 (CVA 2020) came into effect following the widespread impact of COVID-19. In response, the Act was declared a legislative emergency and effectuated the emergency registration of healthcare professionals, international travel restrictions, compensation for loss of earnings and travel and subsistence costs, paid by Parliament.1 Along with heavy implications on the public sector, a subdivision of this Act considers the state of tenancy operations.

Coming into force on Royal Assent, the Act granted residential tenancies protection from eviction during the relevant period; the “relevant period” refers to a length of time in which legislative action is necessary (considered the Coronavirus period, following Assent on 25 March 2020).2 This subsection of the Act concerns situations where rent is overdue or improperly paid, where the relative enforcement is overturned during this period. This includes rent that existed before the passing of the Act, where eviction enforcement is halted until the Act’s expiry, subject to the actions of the relevant national governing body.3

Eviction proceedings were dealt with accordingly:

  • Practice Direction 51Z (PD 51Z) prohibited on-going and potential eviction cases from going forward, ending on 25th June 2020.
  • The Civil Procedure Rules 1998 (CPR 55.29) ensured similar protections and temporarily replaced PD 51Z, which extended to 23rd August 2020 and was further extended to 20th September 2020. 
  • Practice Direction 55C (PD 55C) came into force following the expiry of CPR 55.29 and was extended until 30th July 2021 and further extended until 30th November 2021.4

Additionally, upon Royal Assent, business tenancies were granted protection from forfeiture. This subsection of the Act concerns rent payment, where a lack thereof no longer warrants a forfeiture of the business in the relevant period. Despite these protections, CVA 2020 specified that protection is granted on the basis of rent-related concerns. Therefore, it does not inhibit forfeiture or eviction for other reasons, provided “the landlord [has a] regard to the tenant’s ability to remedy a breach during the COVID-19 outbreak” if eviction were to take place on a non-rent basis.5

Approaching expiry of the Act, Section 82(12) of the Act granted powers to extend the duration of the “relevant period” and was enacted multiple times on 30th September 2020, 31st December 2020, 31st March 2021 and then 30th June 2021.6 The concluding regulations in Schedule 29 of the residential tenancy protection in England and Wales (CVA 2020) states that “Any power to make regulations under this Schedule…may be exercised more than once [and] may be exercised so as to make different provision for different purposes or different areas.”7 As such, the relevant national governing body was able to extend this division of the Act beyond its expiry date, despite reversions to policies from other subdivisions of the Act. ‘From 1 October 2021, notice periods for residential tenancies reverted back to their pre-pandemic timescales…However…the “relevant period” in Schedule 29 to the CVA 2020 has been extended to 25th March 2022 meaning that the government retains its emergency powers to impose longer notice periods until that date.’8

However, following the expiry of certain subdivisions within the Act (which rendered CVA 2020 partially expired), these protections are now revoked in England “by authority of the Secretary of State for Housing, Communities and Local Government.”9 The flexibility towards rent and eviction no longer apply and there still remains a large issue of unpaid rent accrual. As policy extensions were applied and the relevant period was further extended during the pandemic, the accrued gap in rent collection became a substantial issue. The tenancy process regarding both business and residential sectors were largely interrupted by the immediacy of CVA 2020’s implementation. 

The Coronavirus Act report: March 2022 addresses this issue, stating the introduction of “the Commercial Rent (Coronavirus) Bill, which came into force as an Act of Parliament on 24 March 2022.”10 This bill seeks to settle rent-related matters through means of arbitration, if not already settled by an agreement between the tenant and landlord. Business Minister Paul Scully believes that by reaching an agreement in line with a Code of Practice, this legislation will prevent a large number of cases from having to take place in court, and where rent affordability is a concern for tenants, “landlords should try to share the burden, so we can all move on.”11 The government response to implications on tenancy, following COVID-19 restrictions, is ideally that tenants and landlords will have to navigate their differences to reach a mutual agreement, and the process of arbitration should only operate as a last resort.

Endnotes

  1. ‘Emergency volunteers’ in ‘Coronavirus Act 2020: public sector implications’, Practical Law Company (Practical Law Public Sector).
  2.  ‘Postponement of elections, referendums, recall petitions and canvass’ in ‘Coronavirus Act 2020: public sector implications’, Practical Law Company(Practical Law Public Sector).
  3.  ‘Residential tenancies: protection from eviction’ in Coronavirus Act 2020: public sector implications’, Practical Law Company (Practical Law Public Sector).
  4.  ‘Residential tenancies: protection from eviction’ in Coronavirus Act 2020: public sector implications’, Practical Law Company (Practical Law Public Sector).
  5.  ‘What the CVA 2020 did not restrict commercial landlords from doing’ in Coronavirus Act 2020: public sector implications’, Practical Law Company (Practical Law Public Sector).
  6.  ‘Provision’ in ‘The Business Tenancies (Protection from Forfeiture: Relevant Period) (Coronavirus) (England) (No. 2) Regulations 2021’.
  7.  Coronavirus Act 2020, Schedule 29.14 (1a, 1b).
  8.  ‘Residential tenancies: protection from eviction’ in ‘Coronavirus Act 2020: public sector implications’, Practical Law Company(Practical Law Public Sector).
  9.  ‘Signature’ in ‘The Business Tenancies (Protection from Forfeiture: Relevant Period) (Coronavirus) (England) (No. 2) Regulations 2021’.
  10.  ‘Coronavirus Act report: March 2022’, Department of Health and Social Care.
  11. ‘New law to resolve remaining COVID-19 commercial rent debts now in place’, 
  12. Department for Business, Energy & Industrial Strategy, Department for Levelling Up, Housing and Communities, and Paul Scully MP.

Bibliography

Coronavirus Act 2020 https://www.legislation.gov.uk/ukpga/2020/7/contents/enacted

‘Coronavirus Act 2020: public sector implications’, Practical Law Public Sector https://uk.practicallaw.thomsonreuters.com/w-024-6673?documentSection=co_anchor_a530604)

Coronavirus Act report: March 2022, Department of Health and Social Care https://www.gov.uk/government/publications/coronavirus-act-report-march-2022

‘New law to resolve remaining COVID-19 commercial rent debts now in place’, Department for Business, Energy & Industrial Strategy, Department for Levelling Up, Housing and Communities, and Paul Scully MP https://www.gov.uk/government/news/new-law-to-resolve-remaining-covid-19-commercial-rent-debts-now-in-place
‘The Business Tenancies (Protection from Forfeiture: Relevant Period) (Coronavirus) (England) (No. 2) Regulations 2021’ https://www.legislation.gov.uk/uksi/2021/732/made

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