Property litigation weekly update – 17 September 2021
In this week's bulletin, we report on the new notice periods and new forms for residential tenancies, the imminent increases in Court fees as well as a reminder of some practical top tips when dealing with a break notice. All this, alongside recent insights from our colleagues around the firm and some positive news.
Residential tenancies – old notice periods but new forms, is this the last of it?
Following the introduction of the Coronavirus Act 2020, the Government increased notice periods to 6 months for most grounds when seeking possession (including Section 21 Notices), with exemptions for certain serious cases such as high arrears or anti-social behaviour.
From 1 June 2021, the notice periods were reduced to 4 months in most cases (save for the most serious).
From 1 August 2021, notice periods for cases involving less than 4 months' unpaid rent were reduced to 2 months.
New regulations will now come into force on 1 October 2021.
The Coronavirus Act 2020 (Residential Tenancies and Notices) (Amendment and Suspension) (England) Regulations 2021 will do the following:
- extend the relevant period under Schedule 29 of the Coronavirus Act (Protection from Eviction) from 30 September 2021 to 25 March 2022, so that the government will retain its emergency powers to impose longer notice periods;
- suspend paragraphs 2, 3 and 5 to 10 of Schedule 29, so that notice periods revert to pre-pandemic levels with effect from 1 October 2021; and
- substitute new forms of notices (to apply from 1 October 2021 onwards) for seeking possession under section 8 and section 21 of the Housing Act 1988, and under section 83 of the Housing Act 1985 for fixed-term tenancies.
So the upshot is that, whilst the possibility of further changes (at least until 25 March 2022) cannot be ruled out, from 1 October 2021 we will be back to the pre-Coronavirus notice periods but will have to use the new forms of notice.
Transitional arrangements apply to ensure the latest changes will not affect notices served by 30 September 2021, however many landlords considering serving notice at the time of writing might consider it prudent to wait until 1 October 2021.
Get your claims in! Court fees set to rise with the introduction of the Court Fees (Miscellaneous Amendments) Order 2021
With the coming into force of the Court Fees (Miscellaneous Amendments) Order 2021, we will see increases to 128 court fees with effect from 30 September 2021.
The increase in court fees follows the publication of the Ministry of Justice's response to its own consultation, in which it proposed to increase fees "in line with historical inflation dating from August 2016 to the start of the 2021/22 financial year".
The Court Fees Order amends a number of previous orders including the Civil Proceedings, Court of Protection and Magistrates' Courts Fees Orders. The list of affected court fees is set out in sections 4-7 of the Order, but includes claims issued in the County Court and High Court.
Alongside this, the Help with Fees income thresholds have been slightly increased and can be found in section 8.
It is suggested that the proposed increase to court fees reflect historic inflation, and therefore does not amount to an increase in real terms. The Ministry of Justice have also noted that the uplift to the Help with Fees income thresholds applies the backdated inflation, to "ensure that any user who may not be able to afford courts or tribunal fees can still access these services with the help of a full or partial fee remission".
Whilst the increases to Court fees may not be substantial when viewed individually, organisations who bring claims in significant volumes will feel the effect. Further, anyone issuing a claim which is time critical for reasons of limitation needs to take care to ensure the correct issue fee is paid to avoid their claim becoming statute-barred due to failure to pay the correct fee.
Practical insight - dealing with break notices
Break notices served to terminate leases have traditionally provided scope for disputes and litigation, and the need to approach lease breaks with caution (and good professional advice) remains paramount.
When serving notice to determine a lease, it is important to ensure that all contractual requirements are satisfied. When receiving a break notice, careful scrutiny may reveal scope for challenge and provide valuable commercial leverage.
For the party looking to break, the consequences of not validly exercising a 'rolling' break can be significant and the consequences of not validly exercising a 'fixed' break can be catastrophic.
Points to consider when serving or receiving a break notice include:-
When? When can the lease be terminated? What are the timing requirements in respect of giving notice? What period of notice is required, when does notice need to be served, and is a party's ability to give notice subject to any pre-conditions which need to be satisfied at the point of giving notice (or at some other time)?
Who? When serving notice, it is critical to identify the correct parties – both sender and recipient. Checks need to be made (legal documentation, communications between the parties, rent demands, title information for registered proprietor details, etc). Does the lease require any other party to be served, such as an agent?
What? What information or wording does the break notice need to contain? Is the intended effect of the notice entirely clear? It is essential to ensure that the wording of the break notice complies with the lease requirements, and usually sensible to ensure that it reflects the language of the break clause.
How? How does notice need to be served, ie. by what method(s)? Methods of service are often provided for in the lease drafting, and are sometimes mandatory. Alternatively or additionally, statutory provisions concerning the service of notices might apply. Time needs to be allowed to take advice to identify the requirements and satisfy them.
Where? Where does a break notice need to be served? Should notice be served at the address of the party as specified in the lease; at the registered office of a company or another place of business; at the home or business address of an individual; and/or at a specific address which has been detailed in the lease or notified for the service of notices? Time should be allowed to analyse the position, get it right, and confirm service before the deadline. Additional time is required in more complicated cases, e.g. where a party is based abroad.
Other questions exist too. Where there is any element of doubt, it may be prudent to serve multiple notices (each without prejudice to the validity of any of the others).
Even where the potential hurdles for valid service of notice have been overcome, termination of a lease often remains subject to other conditions which need to be satisfied at another point in time (e.g. the break date). More on those another time…
Insights from our colleagues around the firm
Flexible and agile working
Podcast - Positive influencers: a conversation with Leanne Tritton
A post-pandemic fraud landscape: invitation to take part in our survey
£185,000 payout won by woman who had her flexible work request refused
Positive news stories
One of London's busiest streets goes car free
Young British talent, Emma Raducanu, wins the US Open
The UK sees a rise in 'green jobs'