Taxation and trusts; No fault divorce delayed and more.

Contents:

• No fault divorce - delayed until April 2022
• Eviction protection extended for businesses

 

No fault divorce - delayed until April 2022

(AF1, RO3)

The implementation of the Divorce, Dissolution and Separation Act 2020 has been delayed until 6 April 2022.

The Divorce, Dissolution and Separation Act 2020 will allow individuals in England and Wales to obtain a divorce or dissolution merely by filing a statement of irretrievable breakdown of the marriage or civil partnership, without any need to demonstrate that the other spouse's or civil partner’s conduct is intolerable, or to prove separation for two years. 

The main aim of the changes is to reduce conflict and help children and families by making the process less acrimonious. This is a reform of 50 year old divorce laws and is intended to ensure that the process better supports couples to move forward as constructively as possible.  

It was enacted in June 2020 with the intention of bringing it into force in autumn 2021 and a schedule was confirmed by HM Courts and Tribunals Service (HMCTS) as recently as last month.  

However, the Ministry of Justice has now announced that the online service to support it will not be fully developed and tested before the end of this year and has changed the commencement date to 6 April 2022. 

In answer to a parliamentary question, Parliamentary Under-Secretary (Home Office) Chris Philp said: 

“…the Ministry of Justice has worked closely with the Family Procedure Rule Committee to identify the significant changes needed to Family Procedure Rules and supporting practice directions, and to devise some key new procedures. Those procedural changes are critical as they will shape amendments to family court forms, the online digital divorce service, and information on gov.uk. The Family Procedure Rule Committee has now consulted on draft rule amendments and is working to finalise these rules post consultation. 

In parallel, officials have begun work to identify, design and build the necessary amendments to court forms and, importantly, amend the new online digital divorce service while the procedural rules themselves are being finalised. This work includes consideration of commitments made during the passage of the Act through parliament to improve the information and signposting for couples when they navigate the legal process of divorce, dissolution or separation. 

The Ministry of Justice is committed to ensuring that the amended digital service allows for a smooth transition from the existing service which has reformed the way divorce is administered in the courts and improved the service received by divorcing couples at a traumatic point in their lives. Following detailed design work, it is now clear that these amendments, along with the full and rigorous testing of the new system ahead of implementation, will not conclude before the end of the year.” 

Philp has promised that the Government will use the extra time to strengthen signposting to family mediation as a means to resolve arrangements for children and the division of assets on divorce. 

Eviction protection extended for businesses

(AF2, JO3)

The Government announced on 16 June, that businesses that have had to remain closed during the pandemic and are unable to pay rent on their commercial property will continue to be protected from eviction.

Legislation will be introduced to ringfence outstanding unpaid rent that has built up when a business has had to remain closed during the pandemic. Landlords are expected to make allowances for the ringfenced rent arrears from these specific periods of closure due to the pandemic, and share the financial impact with their tenants.

The legislation will help tenants and landlords work together to come to an agreement on how to handle the money owed – this could be done by waiving some of the total amount or agreeing a longer-term repayment plan.

This agreement should be between the tenant and landlord, and, if in some cases, an agreement cannot be made, the law will ensure a binding arbitration process will be put in place so that both parties can come to a formal agreement. This will be a legally binding agreement that both parties must adhere to.

In order to ensure landlords are protected, the Government is making clear that businesses who are able to pay rent, must do so. Tenants should start paying their rent as soon as restrictions change, and they are given the green light to open.

The moratorium on commercial evictions was first introduced in April 2020 to help struggling businesses through the pandemic and was later extended until September of last year.

The policy was then extended further, but had been due to end at the end of June.

This measure will now be in place until 25 March 2022, alongside the restrictions on landlords’ abilities to recover rental arrears through the seizure of goods. Restrictions on the service of statutory demands and winding-up petitions, implemented through the Corporate Insolvency and Governance Act 2020, are also set to be extended - for a further three months.

Further information

The extension applies to all businesses, but the new measures that will be introduced by primary legislation will only cover those impacted by closures. This mean that rent debt accumulated before March 2020 and after the date when relevant sector restrictions on trading are lifted, will be actionable by landlords as soon as the tenant protection measures are lifted.

The arbitration process will be delivered by private arbitrators but in accordance with guidelines which the Government will set out in the legislation, and they will have to go through an approval process to prove their impartiality.

A Government response to the call for evidence on commercial tenancies will be published in due course.

The review of commercial landlord and tenant legislation will be launched later this year and will consider a broad range of issues including the Landlord & Tenant Act 1954 Part II, different models of rent payment, and the impact of Coronavirus on the market.

The Ministry of Justice have confirmed that the restriction on the use of the Commercial Rent Arrears Recovery (CRAR) process by landlords will also be extended. The total number of days’ outstanding rent required for CRAR will remain at 554 days. This measure will continue to provide protection to tenants of commercial leases with rent arrears accumulated during the coronavirus period, while protections from forfeiture for business tenancies are in place under the Coronavirus Act 2020.

 

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