There are currently a number of legal moratoriums in existence in England and Wales which were introduced by the Government by way of the Coronavirus Act 2020, the Corporate Insolvency and Governance Act 2020 and ancillary regulations in order to provide some level of protection to the public and the economy from the worst effects of Covid 19.
Post the onset of Covid 19 the Government introduced a whole raft of restrictions which, subject to exceptions, brought many legal processes virtually to a grinding halt. In the business sector, by virtue of the Corporate Insolvency and Governance Act 2020, restrictions were imposed on the use by creditors of the statutory demand procedure and winding up petitions ; commercial landlords have been prevented from availing of remedies such as re-entry and forfeiture to recover rent arrears with restrictions imposed, pursuant to the Taking Control of Goods and Certification of Enforcement Agents ( Amendment)( Coronavirus) Regulations 2020, on the use of commercial rent arrears recovery (CRAR) ; residential landlords have endured severe restrictions in relation to the various methods of recovering possession such as section 21 accelerated possession and section 8 Housing Act procedure.
These moratoriums have been extended on various occasions and, notwithstanding the roadmap out of the lockdown, there is no sign that they will be lifted once the current moratoriums expire. On the 9th December 2020 the Government announced a ‘final’ extension to protect those from the threat of eviction by extending the restriction until the 31st March 2021. In England this has been extended to the 31 May 2021. On the 10th March 2021 the Government announced that the restrictions on forfeiture would be extended until the 30 June 2021 with an indication that further steps will be introduced from the 1 July 2021. With residential possession, the current temporary bar expires on the 31st March 2021 but by virtue of the Coronavirus Act 2020 ( Residential Tenancies : Protection from Eviction)(Amendment)(England)Regulations 2021 the relevant period during which extended notice periods of 6 months( with exceptions) is required has been extended until the 31 May 2021. Landlords can currently bring proceedings for possession pursuant to the section 21 accelerated possession procedure subject to 6 months prior notice being given and with section 8 Housing Act procedure the notice period is 6 months but can be reduced to 4 weeks provided there exists 6 months rent arrears or serious anti social behaviour. In the business sector, the current restrictions (subject to exceptions) which prohibit winding up proceedings and statutory demands are due to expire on the 31 March 2021. However, the Government laid regulations on the 11 February 2021 in Parliament confirming its intention to extend its power to make temporary amendments or modify the effects of corporate insolvency and governance legislation for an additional year.
Clearly, ‘final’ moratoriums have not been final and in the circumstances this is understandable. Hence, it would be reasonable to assume that moratoriums will continue to be with us in one form or another throughout the rest of the year as we come out of lockdown to help cushion businesses and individuals from the ongoing adverse impact from the Pandemic. Consequently, various court processes will continue to be on hold and as a result , creditors and landlords, unless they find themselves able to avail of the exceptions to the rules and regulations, will be prevented from availing of the wider range of procedures and remedies which pre-Covid had been available to them.
Linder Myers can advise landlords and creditors in relation to the ways in which the exceptions to the rules and regulations may enable them to continue to use enforcement procedures such as commercial forfeiture, CRAR, statutory demands and winding up procedures in addition to the standard method of judgement debt recovery through the county court which is not subject to any moratorium.