On 27 March 2020, Practice Direction 51Z (“PD51Z”) introduced a 90 day stay on all proceedings brought under CPR Part 55 and all proceedings to enforce an order for possession by a warrant or writ of possession (as discussed in this previous Law-Now article).
As a result of concerns raised by various landowners and representatives clarification was issued in April 2020, which confirmed that the stay does not apply to claims against trespassers (persons unknown) or to interim possession orders. This 90 day stay under PD51Z will come to an end on 25 June 2020, and a new rule, CPR rule 55.29, will come into force: extending the stay until 23 August 2020.
When will CPR rule 55.29 apply?
The new rule will apply to proceedings which were stayed immediately prior to 25 June 2020, and to proceedings brought between 25 June 2020 and 22 August 2020. The stay under this rule will expire on 23 August 2020. It is important to note that CPR 55.29 does not prevent a claim being brought, notwithstanding that it may be stayed. Further, for the purposes of the application of any rule under the CPR to proceedings stayed by CPR 55.29, time does not run and no notice is required to be given by the court.
As with PD51Z, CPR 55.29 will not apply to a claim against trespassers to which CPR 55.6 applies, proceedings under the interim possession order procedure, an application for case management directions that are agreed by all parties, or a claim for injunctive relief.
The fact that claims against trespassers are excluded from this extension to the stay of possession proceedings will be good news for landowners who are concerned about trespass at this time. These landowners should continue to put in place measures to physically protect their property from access by trespassers.
However, both PD51Z and CPR 55.29 will represent a disadvantage to any landlord who wishes to obtain possession by court proceedings against a tenant who has not paid rent or otherwise breached their lease. This impact will be most keenly felt given the current moratorium on forfeiture for non-payment of rent which we anticipate will be extended beyond the current period set to end on 30 June 2020. A landlord could issue proceedings for possession, but these would be stayed until 23 August 2020, and could only file directions for a case management hearing if these directions have been agreed with the tenant.
Landlords should consider whether there are other methods available to them to recover lost rent, for example through drawing down on rent deposit deeds or exercising guarantor provisions. The ability to take action by way of statutory demands and winding up petitions is likely to become more restricted as a result of upcoming legislation in the form of the Corporate Insolvency and Governance Bill which may be in force by the end of this month. They should be aware that some methods of enforcement, including statutory demands, winding up petitions, and the Commercial Rent Arrears Recover (CRAR) regime have been restricted due to the current pandemic and so will likely no longer be suitable.
Landlords and tenants should therefore seek to maintain positive and open communications in order to work together.
This article was co-written by Ciara Berry.