Advice for landlords amid COVID-19 changes
In a fast-paced changing environment, much is being announced by the Government to support businesses. In a recent press briefing, Chancellor Rishi Sunak and Prime Minister Boris Johnson promised to do “whatever it takes” to support the UK economy through an unprecedented challenge, promising a 3-month mortgage “holiday”, £330 billion in loans (equating to 15% of GDP) and £20 billion in other aid to help businesses pay for supplies, rent and salaries.
However, the Labour party claim that over 20 million people (eight and a half million households) rent their homes from private, council or housing association landlords, including three million households with children. Labour says that two thirds of private renters and more than 8 in 10 social renters have no savings, according to government data.
There are 2.6 million buy-to-let landlords in the UK, but their mortgages are not part of the “payment holiday” measures introduced by the banks. If there is widespread non-payment of rent by tenants losing their jobs, landlords are likely to default on their loans and possibly be repossessed, and the tenants evicted. The Residential Landlords Association wants landlords to be given the same access to payment holidays as conventional mortgage holders.
During Prime Ministers Questions today, Labour Leader Jeremy Corbin urged the Prime Minister to suspend home rental fees and ban evictions of tenants during the coronavirus crisis. It is understood that John Healey, the shadow housing secretary, will be publishing draft legislation which Labour is urging the government to adopt immediately.
The new law would mean any non-payment of rent due to Coronavirus would not count as legal grounds for eviction. A statement from the party says: “The move would bar landlords from evicting tenants who are off work and not getting paid due to Coronavirus, by changing the legal basis on which landlords can seize possession of a rented property to exclude arrears which have built up due to the effects of the coronavirus pandemic.” It would initially cover any arrears that accumulate between March 1 and September 1 “with the option to be extended as necessary”.
Business Secretary Alok Sharma told BBC Breakfast that measures which will offer support to renters will be announced “very shortly”.
Mr Johnson told the Commons: “I can indeed confirm that we will be bringing forward legislation to protect private renters from eviction. That is one thing we will do.” But he didn’t say exactly what the law for renters would do.
Housing associations have now confirmed they will not evict tenants who are affected by the virus and fall behind on rent payments, Kate Henderson, of the National Housing Federation, which represents housing associations in England, has confirmed.
The campaign group Generation Rent is calling for a temporary halt to all section 21 “no fault” evictions and section 8 evictions for rent arrears. It wants the five-week wait for housing benefit removed, and for rents to be frozen for a year.
What should landlords do in the meantime?
The Guild of Letting and Management (GLM) has thrown helpful light on the responsibilities and recommended approach for letting agents, landlords and property managers where a tenant is self-isolating due to coronavirus.
Gas safety check is due
The Health and Safety Executive Gas Safety advice line advise the following:
- Keep a dialogue open with your tenant. Keep records of any discussions that take place with tenants who are self-isolating;
- Save all email correspondence from the tenants in question. Ask the tenant to explain in an email that they are self-isolating and are advised not to allow visitors to the property.
- Book an inspection for as soon as possible after the tenant has completed the self-isolation period.
- Inform the local authority housing team that you are unable to complete the inspection at this time.
Access for repairs
Is there an immediate risk to safety, for example water supply, sanitation and heating failure? If so, attempt all possible steps to complete the repair. Follow NHS guidance on social distancing.
Landlords may also wish to offer additional support for vulnerable tenants, such as the elderly, disabled and those will a long-term illness.
Tenants facing financial difficulties
Be sympathetic. Keep a dialogue open. Have a positive discussion about how best to manage the situation. Where possible, agree a reduced rent and future payment plan for arrears. Some landlords will have insurance cover if rent is not paid at all, but the small print of those policies may rule out some claims.
Tenant asks to end the tenancy early because their circumstances have changed due to the outbreak
While you legally could enforce the terms of the tenancy and claim rent for the remaining period, it may be better to negotiate an end to the tenancy with the tenant and seek to re-let the property. You should check such an action doesn’t breach terms of your mortgage provider or insurer before agreeing to an early surrender.
The tenant pulls out of the tenancy prior to the start date
Tenants may seek to do this for several reasons. Some tenants may have been caught by travel restrictions and unable to travel to the UK, others may have seen a job offer withdrawn or a course cancelled. Where a holding deposit has been taken, you may choose to only retain the costs of setting up the tenancy, rather than the whole amount.
Houses with multiple occupation
Tenants should follow the Government advice. Tenants should be encouraged to inform housemates if they are self-isolating or have become ill as the whole household will need to self-isolate.
Landlords may wish to consider displaying copies of government advice notices in common areas, and supply soap and/or sanitiser. Public Health England (PHE) has released some posters which HMO landlords may find helpful to display in common areas of their properties.
Should a deep clean be necessary, the landlord should bear the cost. Cleaning of properties between tenancies should be thorough.
Landlord in financial difficulties
If you experience financial difficulty, due to not receiving expected rental income, or because your regular employment has also been affected by the coronavirus outbreak, seek to discuss this with your lender and consider putting a payment plan in place, rather than simply not paying. Mortgage providers are offering to defer home loan repayments for up to three months, although individual banks have different rules. This does not generally extend to landlords’ buy-to-let mortgages, but landlords’ groups have called on banks to treat these in the same way.
We can review and advise landlords in relation to a tenancy agreement and on negotiations with tenants.
Where a tenant has failed to pay rent for a period, where appropriate, we can assist a landlord in serving a Section 8 notice, giving the tenant 14 days’ notice to give vacant possession of the property. Following this time, proceedings can be issued seeking an order from the Court for a possession order, along with payment of rent arrears, interest, solicitors costs and Court fees. Alternatively, or in addition, a Section 21 notice can be served where appropriate, giving the tenant 2 months’ notice to give vacant possession, following which the landlord can pursue a possession order alone.
If you are a landlord concerned about the impact of Coronavirus and would like legal support, we have a team of specialist property dispute resolution solicitors ready to help. Please call 0117 906 9400 or email email@example.com