rent arreers uk covid

According to surveys done by the homelessness charity Shelter and the National Residential Landlords Association and sources from YouGov, a bit over 3% of tenants are building up arrears. That still means over 227,000 private renters are at risk of losing their homes once the ban on evictions is lifted.

Rent does not merely cover housing, of course, but also commercial spaces. Both have rather urgent since jobs in commercial spaces being closed or lacking customers can easily lead to housing bills going unpaid.

Private renters, England, weighted % in rent arrears Estimated number of people in rent arrears
I am behind with rent payments/ in rent arrears [As at June 4th-11th 2020] 5% 442,403
I am behind with rent payments/ in rent arrears [As at June 4th-11th 2020, but was up to date with rent as at March 1st] 3% 226,785

Source: YouGov survey of 1,058 private renters in England, online, 16+, weighted to be presentative of England’s private renters using official statistics, fieldwork 4th June to 11th June 2020.

Addressing inability to pay home rent has been a primary concern for coronavirus relief efforts, and the chart shows that government and private efforts had managed to put a dent on what would have been a cascading effect.

However, as coronavirus restrictions begin to relax, there is another looming insolvency disaster that could have people lose their jobs and homes.


It’s not a matter of Tenants vs Landlords

This should not be considered a question of tenants vs landlords because both are getting incommoded by government incompetence. Landlords have to worry about their tenants going to be out of business since it would be difficult to find another renter at the same terms. Evicting people from their homes would not allow them to claim landowner remedies.

Long-term self-interest are what drive landlords to be agreeable about rent, since once business goes back to normal it would be significantly easier to get familiar businesses with ready clientele up and running again compared to finding new tenants who still need to move into and overhaul the premises.

Attitudes vary, however. Take for example, one of Shelter’s case studies:

Case study: Jeanny, 48, lives in Bournemouth with her three children.

She was furloughed from her retail job at the start of the pandemic and is still unable to return. Jeanny asked her landlord for some flexibility on paying her rent, but her landlord refused and has asked the family to leave the home they have rented for four years by 4 October.

Jeanny said: “It was a complete shock. I thought my landlord would at least say ‘let’s talk’ about the rent before threatening me with eviction, when I told her I couldn’t quite pay my full rent after my pay was cut. Before the pandemic, I’d always paid my rent on time every month for the four years we’ve lived here.

“Being under all this pressure is having a massive impact on everyone in the family. It affects my sleep, it’s on my mind all the time. I talk about it with my older children, and we try and work out where we can get the money from to top up the rent. I’m already buying cheaper food and looking for other ways to cut back. It’s incredibly stressful. I don’t want it to come to an eviction through the courts. I don’t want my children to go through that.”

If the landlord is unwilling to entertain an adjusted payment plan and is intent on eviction, renters can only seek their own remedies. The three percent that are under threat of eviction are only those who are unable to pay their rent directly – how many more are managing to barely keep their payments going?


Restrictions on landlord remedies through the pandemic

The Coronavirus Act imposes a moratorium on forfeiting leases

Sections 82 and 83 of the Coronavirus Act gives a moratorium on landlords’ ability to forfeit leases of commercial property for non-payment of rent in England, Wales, and Northern Ireland. It is due to expire on 31 March 2021. This applies to most commercial leases, but less so for those with terms of less than six months.

The Act also provides protection from eviction to residential tenants via extending their notice period for eviction.

Important here also is that the Coronavirus Act protects landlords from inadvertently waiving their right to forfeit for non-payment of rent and other charges. So they may continue to demand rent and requests for consent (for viewing, etc.).

Landlord rights to remedy

The Coronavirus Act only suspends the right to forfeit the lease for non-payment, not a suspension of payment. Landlords retain the right to charge interest on arrears as specified in the lease, or to bring debt recovery proceedings, or have recourse to parent companies or other guarantors, or access to deposits or other forms of security for payment.

Commercial Rent Arrears Recovery (CRAR) extended minimums

 Of importance to commercial tenants is an expansion on the minimum amount of unpaid rent before the landlord can exercise CRAR procedures – that is, to allow landlords of commercial properties to recover arrears by taking control of their tenant’s goods and selling them. It now amounts to 366 days’ worth of rent that must be outstanding before the landlord can enforce CRAR.

These protections will apply until 31 March 2021.

 No one can be removed from their home if they have contracted COVID-19

While some residents or landlords might think it is reasonable to do so for safety, it is explicitly forbidden during this time.

On the other hand, landlords are not legally obligated to provide alternative accommodations for tenants if they have contracted the virus. Just as they may not be removed from the property, those living within the property must also take action to prevent spreading the virus. Residents should follow government-issued guidance on maintaining social distancing in multi-household spaces.

Tenants do not have the right to withhold rental payments

Unless the terms of the lease allow it, a tenant cannot withhold payment of their lease due to financial difficulty or health reasons. Landlords may be prevented from bringing possession proceedings but rent will continue to accrue with interest during these months.

Rent reductions can only be granted voluntarily by the property owner in order to avoid renter insolvency and have better chance to recover arrears.

This is why most relief programs seek to enable renters to pay their rent instead of provoking rent disputes. Any talks with their landlords for rent adjustments need to be documented and legally binding.


evictions uk housing

Before your landlord can evict you

Your landlord can evict you if you fall behind your rent – not even COVID-19 has changed this. However, in summary your landlord must give you at least six months notice before they can evict you… unless you owe six months rent or engaged in anti-social behavior. Then you get four weeks notice to find a way to either keep tenancy or leave.

Two weeks’ notice period applies where the possession is sought on the grounds of offence committed at a riot, domestic violence, acquiring the tenancy as a result of a false statement or illegal residency within the UK.

The eviction ban have been extended to March 2021, and it is unknown if it will be extended further. However once the restriction on evictions end, we might see a wave of eviction notices as landlords desire to let in more solvent tenants. COVID-19 has not changed the need for renters looking for better and more convenient accommodations for their work and family, and property owners have a limit to how much they can be made to support a household without due compensation. 

Will you be automatically evicted once the notice period expires?

Most private and social tenants and licensees can only be evicted with a court order, which the landlord can apply for if they have served the tenant with a legal notice and the time has expired. A notice served by itself is not enough to evict a tenant, a court order or warrant is required.

A landlord cannot use violence or threat of violence to evict someone, in any circumstances. If they do not follow the appropriate legal procedures, they may be guilty of illegal eviction and/or harassment.

Exceptions to the halt on enforcing eviction orders

Bailiffs are not allowed to enforce evictions until 31 March 2021, except in cases relating to: illegal occupation, anti-social behaviour, eviction of perpetrators of domestic abuse in the social sector where the victim is housed elsewhere and where the property is unoccupied following the death of a tenant.

Can COVID-19 be used to argue for a frustrated lease?

Renters and owners are both tied carrying out their contractual obligations in their tenancy agreement. Commercial renters who find themselves unable to pay their rent obligations due to being shut down by coronavirus might look to argue that COVID-19 has caused frustration – i.e., without default of either party the contractual obligation has become incapable of being performed.

Unfortunately the bar for a frustrated lease is quite high – the renters must show that the lease obligations would have been impossible to perform due to the disease or lockdown. It is not enough to show that the terms of the lease was harder to carry out due to business disruption or financial difficulties. COVID-19 has not made it so that tenants would be permanently incapable of occupying their premises.

Renters cannot unilaterally ask to break their leases due to COVID.

Mediation instead of going to court is the best option

According to the London School of Economics and Political Science there will be “a slow burn of evictions that will go on at least into 2022. This will leave more and more tenants – and sometimes their landlords – facing months of insecurity, mental stress and hardship.”       

Their analysis showed that most arrears cases do not lead to formal legal processes and evictions. Most tenants are more likely to find some other place cheaper to live in, move in with parents and friends or share in overcrowded housing arrangements, find a new job, or come to an arrangement with their landlord. COVID-19 has disrupted this processes, but argue that the highest return comes from allowing people facing possible eviction to contact local authorities as soon as possible.

Local authorities have to support homelessness prevention as part of their regular responsibilities and as such may better support tenants in large numbers to keep their residences through negotiation or sometimes incentives with landlords. Local Housing Allowance and other benefits may help renters avoid falling into rent debt.

While it is the better option, one must still exercise due diligence and carefully vet their representation. Mediators are not regulated – some mediators have professional qualifications, others not. Mediators that are members of professional bodies have standards of conduct and should be insured in case terms go wrong. A regulated solicitor can also serve as a mediator or recommend an established firm.

Consulting with a legal professional is always useful in finding all options for financial remedy.

cryptocurrency law uk

There is an ongoing legal problem with the use of cryptocurrency and cryptoassets when it comes to building wealth and protecting funds from seizure. Lawyers and those seeking legal counsel need to be prepared to deal with new laws and precedent regarding the use, discovery, recovery, and freezing of cryptoassets as part of trial investigations.


Are cryptocurrencies properties?

Before any question is raised to cryptocurrencies being subject to a freezing injunction, first it must be established if cryptoassets can be considered property at all.

When compared to other traditional assets, such as fiat currency, real estate, trusts and etc., cryptocurrencies are revealed that:

  1. They are not a chose in possessions (i.e., a tangible personal property that can be possessed or transferred), since they are virtual and not tangible items. It is not possible to posses a single cryptocurrency coin, but only to be granted access to said item via a wallet key that may be stored on more traditional media such as storage drives or printed out.
  2. They are not a chose in action (i.e., assets that carry with them rights to recover money or debt, such as titles, inheritances, bank accounts and bonds) since they do not contain or provide any enforceable right to the bearer to be repaid or transformed into other forms of property.

Therefore, to enable cryptocurrency to be defined as a ‘property’ that possesses value that can be pursued in court, it may be required to create a classification for intangible property.

Fortunately however, there are case precedents that establish that cryptocurrency can be considered property by international courts. Cryptocurrency –

“meet the four criteria set out in Lord Wilberforce’s classic definition of property in National Provincial Bank v Ainsworth [1965] 1 AC 1175 as being definable, identifiable by third parties, capable in their nature of assumption by third parties, and having some degree of permanence.”

Therefore cryptoassets are subject to a freezing injunction.

The question therefore becomes, are cryptoassets at all enforceable to being frozen under an injunction?


Finding value in pairs of random numbers

The most famous example of cryptocurrency is Bitcoin. Essentially, a Bitcoin is a piece of cryptography – a unique sequence of lines and numbers – that is then encoded into a blockchain, a line in a distributed ledger. This ledger is stored independently in potentially millions of computers all over the world, without any one person or organization to claim ownership or identify the owner of a particular bitcoin. This anonymity and resilience against government-backed currency manipulation and unlawful seizure of property is supposed to be the main selling point of cryptocurrency.

A piece of cryptocurrency on the blockchain is composed of two codes – a public key, which is broadcast to the system, and a private key that is known to no one but the sender. This key opens the ‘wallet’ which decrypts the public key using the private key as proof of ownership facilitating transfer. The private key is a string of numbers that can be stored anywhere, from a text file, on usb device, embedded onto a physical coin, or written out on a piece of paper.

The private key enables anyone knows of it to deal with the cryptocurrency in the wallet. At no point in the transaction are personally identifying details such a name or location ever involved (in contrast to bank transfers which require account details). Once a digital token or coin is transferred, it is irreversible. The inability to force a freeze or refund nor to identify the recipient presents problems to anyone who hopes to recover from a cryptocurrency-based scam.

When considered part of a portfolio, cryptoassets do have their value and growth potential. For cryptocurrency to be viable as investment properties, the owner must retain possession of the private key for their crypto wallets.

In practice, a piece of cryptocurrency is as valuable as only what someone else may pay for it in fiat currency. Its value can vary greatly, more than stocks, which is why some prefer to use it as a vehicle for speculation as much as its traits of secrecy and security.


investment cryptocurrency

Standardized Freezing Orders Adapted to Handling Cryptocurrency

It is required to use a standard form of wording when writing a proprietary freezing injunction to restrict the use of specified assets. Any departure from the standard wording must be drawn to the attention of the judge. Accordingly, a freezing order ought to feature the words –

  • Until the return date or further order of the court,
  • the respondent must not remove from England and Wales
  • or in any way dispose of, deal with or diminish the value of the following assets
  • which are in England and Wales, namely:
  • [specify in detail]


Therefore, when dealing with cryptocurrency, there are special considerations compared to traditional assets:

  • Immediately it must be proven that the person has possession of these cryptoassets via the physical possession of the public key, whether it be in the form of emails, registration in a cryptocurrency exchange, a usb device, or any other storage medium.
  • Being that cryptocurrencies are stored in a blockchain, which simultaneously exist in many computers all over the world, there is no need to prove that the asset exists in England and Wales,
  • The respondent and others must be prevented from moving cryptoassets around, which can only be done by securing their possession of the public key and preventing this public key from being used in any other computer. Remember, anyone with the public key can manipulate the wallet containing the crypto-assets.
  • Ironically, the same fact that cryptocurrency must be taken for granted to exist in England and Wales also means that moving them means removing them from England and Wales because once any transfer is done, those digital tokens become anonymized and could be anywhere under a new private key or converted to fiat currency.
  • Cryptocurrency assets must not be referred to in terms of monetary value, since their prices in the exchange vary heavily and suddenly, but instead must be noted in specific amounts of tokens and coins.


Exerting Control over the Cryptocurrency Assets

The difficulties regarding the intangibility and highly complicated nature of cryptoassets would require orders that deal with disclosure and the instruction of experts. Since the identification of cryptoasset holdings rely on the possession of private keys, it is correct that the first thing to do is to obtain physical possession and analysis of devices which may contain the relevant ‘wallets’.

Should the respondent be using a wallet provided by a cryptocurrency exchange, it is possible to order a freeze on these account. A company that provides such a financial service would comply under the force of law. Obtaining the respondent’s passwords to cryptocurrency exchanges would also allow monitoring of the assets held in place.

A cryptocurrency exchange usually serves also as a means for speculation, buying and selling cryptocurrency the same way as foreign exchange speculation takes advantage of fluctuating differences in currency value. Cryptocurrency, as property, can even be included in trusts. Cryptoassets used as a legitimate investment vehicle that require identification information can more easily be frozen.

Cryptoassets held as a reserve however need more aggressive measures.

An order for the seizing, custody, and preservation of devices that may contain the private keys is sanctioned by certain sections in the Family Procedure Rules 2010. It may be more important to obtain this custody immediately than just a conventional freezing order.


Disclosure of Crypto-Assets

As cryptoassets are valid property, they must be disclosed under an order. This order may precede the freezing order. Disclosing the existence of crypto assets to an Expert instructed by the court may be the only way to get those devices which may contain access to the ‘wallet’ returned.

As long person subject to the investigation and freezing order does not;

“sell, transfer or otherwise deal with the cryptocurrencies whose details are stored on the USB devices [and (other devices)] returned by the Expert save with the written consent of the applicant or pursuant to a further order of the court, and the respondent must not instruct, encourage or otherwise permit any other person to do so on his behalf.”

If the respondent actively attempts to hide and transfer assets rather than disclose them, they would be subject to a criminal charge of perjury, have their assets continually be examined and again in the future for signs of malfeasance, and once discovered would possibly be subject to other criminal charges such as tax evasion, etc.

Article by solicitors North East UK