As things stand, people who rent homes are at serious risk of homelessness and other repercussions from their landlords as a result the Covid-19 pandemic.  In the short and medium term renters will accrue arrears as incomes go down (due to reductions in wages or simply being laid off), and as more immediate needs overtake obligations to landlords.  Evictions and debt will surely follow. In the longer term the financial fallout is also likely to have a significant effect on the property market, which may persuade landlords to try to evict renters before selling up. This comes in the context of an existing and very serious housing and homelessness crisis.

The easiest and most effective way of protecting renters during this COVID-19 crisis and its repercussions is to reformulate the legal basis on which landlords can evict them.  At the moment landlords can do this in one of two (lawful) ways:

1) Asking for a ‘no fault’ eviction at the end of a tenancy (or during a rolling month-to-month tenancy), which is a mandatory basis for possession (the court must order the eviction); or

2) Establishing one of the ‘grounds’ for possession under schedule 2 to the Housing Act 1988 (which include rent arrears and other breach of tenancy).  Some of these are mandatory, some are discretionary (rent arrears can be either or both).

Tackling these premises for eviction can take a number of forms, but we suggest two here.

First, it is essential to suspend ‘no fault’ evictions indefinitely.  Otherwise, with the best will in the world, no mechanism can be effective: even if rents were totally waived landlords could simply evict tenants on a Section 21 basis. The UK is already an outlier amongst European nations in maintaining ‘no fault’ evictions in any case, and this crisis underlines the flaws in the law in this regard. The Conservative Party already committed to abolishing Section 21 (representing no fault evictions) in 2019, so this would simply be following through on that promise.

Second, the ‘grounds’ for possession could be reformulated.  

At the moment, where a discretionary ground is raised the question is whether the eviction is ‘reasonable’ – the courts look at (for example) the level of arrears and make a judgement as to whether they are too high. In practice this means that if rent arrears still stand as grounds for eviction, many tenants will remain susceptible to homelessness and debt, either now or in the future.

But there is another concept within land law (an old concept, but still recognised in Scotland and some agricultural cases) of ‘greater hardship’: in these cases, the courts have to look at the competing interests and work out which party would suffer the most from the outcome of the case. 

This would be a much better system than the current climate because, as it stands, the courts would probably find it ‘reasonable’ to evict someone who is in very high arrears and has no prospect of paying them back (most likely leading to a huge number of possession orders made after the pandemic). In contrast, if the ‘hardship’ concept was in play, the courts would probably not evict that same tenant if the landlord’s business interests were weighed against the prospect of homelessness; in a great many cases (but not necessarily all) it would be fairly clear that the tenant would suffer much greater hardship should the court rule against them.

With the hardship grounds in place, the repayment of any accrued rent arrears could be managed by the court, precluding evictions and smoothing the economic hardship felt by renters.  Renters could be ordered to repay the arrears at a rate that does not cause them more hardship than an eviction would.

In many ways this is preferable to the indirect route to avoiding homelessness that the government is currently pursuing: by supplementing wages and incomes to avoid arrears accruing in the first place. The government’s approach – whilst to some extent necessary – channels public money into the hands of asset-holding landlords and (even worse) mortgage lenders. It seems counter-intuitive to allow tenants to remain in arrears,  but by removing or lessening the real-world consequences of those arrears (homelessness) the debt becomes far less important – particularly if a large number of households are in the same position.

The obvious concern for landlords is that ‘smoothing the bite’ would disincentivise rent payments, and leave them with no recourse against tenants who deliberately default. But the courts would, of course, consider any allegation of ‘deliberate’ conduct when assessing relative hardship.

The virus comes on top of an existing housing and homelessness crisis. Any reforms passed now should have the longer-term aims of addressing the root causes.

The proposals set out above would also have the longer-term effects of helping to de-financialise the housing market (by giving tenants greater recourse to legal help) and reducing homelessness. The abolition of section 21 and greater security of tenure would make landlordism less attractive, as evictions and rent increases would be more difficult to secure (the current system of very short-term tenancies allows rents to rise incredibly quickly).  Removing these props to the profitability of private sector renting would take some of the heat out of the property market, and help house prices to approach their value as homes, rather than financial instruments. Abolishing section 21 would also, at a stroke, remove the single biggest cause of homelessness.

Nick Bano is a lawyer specialising in housing, homelessness and equality law.

Franck Magennis is a laywer with a broad public, civil and criminal defence practice.