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Possession proceedings were stayed on 26 March 2020, shortly after the nationwide COVID-19 lockdown was announced. This suspension of proceedings remained in place for almost six months until 21 September 2020.

Following the lifting of the stay, the Government’s Working Group on Possession Proceedings has published guidance on the provisions for dealing with possession proceedings. These guidance is referred to as the ‘Overall Arrangements’.

The most relevant provisions in the Overall Arrangements for possession proceedings:

  • ‘Careful efforts to reach compromise’ must be taken prior to issuing new proceedings, or re-activating existing proceedings.
  • Any applicable pre-action protocols must be followed, and evidence provided of compliance.
  • Existing claims will require a ‘Reactivation Notice’ to be issued before 29 January 2021, failing which the claim will be automatically stayed.
  • Any knowledge the claimant has as to the effect of pandemic on the defendant and their dependents must be set out in the particulars of claim for new possession claims.
  • Defendants have the ability to ‘COVID mark’ a claim if it has arisen due to COVID related circumstances.
  • Priority listing will be given to certain types of cases including, amongst other grounds, high rent arrears (usually over more than 12 months) subletting issues, antisocial behaviour issues, death of leaseholder, and abandonment of property.
  • Claims issued prior to the stay on 26 March 2020 will also be given priority.
  • Claims will be given a ‘Review Date’ before the final hearing which allows time for:
    • Defendants to receive ‘duty scheme advice’;
    • Parties to reach agreement;
    • Parties to be referred to mediation, if they agree.

Considerations for property managers

We do not yet know what approach the court will take to these new provisions or how they will be interpreted, but we have canvassed opinions within the Brady Solicitors team and provide our thoughts below:

With claims for arrears or ground rent and service charge, a defendant often does not respond and is difficult to locate, making ‘careful efforts to reach compromise’ very difficult. It is not clear what the expectations will be, but it seems it would be unfair for a court to penalise a freeholder or RMC/RTM claimant who took all reasonable efforts to contact a defendant and was unaware of any COVID-related circumstances.

It would though be prudent for managing agents to check if any contact with the defendant has been made prior to issuing or reactivating any possession proceedings – or any preceding money claims.

Compromise may be key

We recommend taking a balanced approach to collection action following any correspondence relating to COVID. It remains to be seen whether courts will be expecting better efforts towards compromise, but it seems likely.  In COVID cases, we expect consideration will have to be given to reducing administration fees and/or offering instalment arrangements in order to settle cases. A freeholder or RMC/RTM that does not act reasonably could well be penalised by the courts in costs.

Are your leaseholder contact records up to date?

Efforts to ascertain the correct address of a debtor should be made prior to possession proceedings being issued. Key to this is making sure you provide your legal advisers with these up-to-date contact details, so they can make all the necessary efforts to contact the debtor.

Expect an emphasis on settlement

Prior to the pandemic, very few forfeiture cases were defended. It remains to be seen if that will continue to be the case. Where claims are defended, emphasis will be on settlement. Review dates will be by telephone, which means it will be a bit like a small claims mediation, save that presumably there will be a direct conversation between the claimant’s advisor, the defendant and the duty adviser.

So, in summary…

Reassuringly, the Overall Arrangements do list cases to be treated with priority as we set out above. Also, claimants are required to provide details of ‘material arrears’ outstanding prior to March 2020, indicating perhaps that the court will be less lenient with pre-pandemic debts.

At Bradys we are striving to help our clients to maintain a balance of efficient arrears recovery and adherence to the new provisions. Steps we will be taking to collect debts in-line with the new guidelines are:

  1. Seeking instructions before we proceed to a Possession Claim on:
  2. Any contact with the defendant and details of this contact, particularly any attempt to settle;
  3. Contact details for the debtor, including telephone number and email address;
  4. Any knowledge the claimant has as to the effect of pandemic on the debtor and/or their dependents.
  5. Carrying out a trace on the debtor to check we have the right address, and contacting any new addresses found in that trace.
  6. Reviewing the case to see if it meets one or more of the conditions for being dealt with by the court as a priority case:
    • Substantial arrears of more than 12 months;
    • Antisocial behaviour allegations;
    • Any issues of subletting;
    • Abandonment of property, or
    • Death of the leaseholder,

If you are a managing agent struggling with how to tackle your debts in an effective but fair manner or have queries on the new process, contact the expert and informed team at Brady Solicitors on propman@bradysolicitors.com. We would be pleased to help you understand your options.