Residential landlords and Coronavirus: what you need to know
The Covid-19 crisis has prompted the Government to introduce emergency legislation suspending evictions, issue guidance about rent and mortgage payments, and provide financial support for those affected by the lockdown.
The temporary changes are considerable – but necessary to keep everyone safe and limit the spread of the pandemic.
According to Housing Secretary Robert Jenrick: “The Government is clear – no renter who has lost income due to coronavirus will be forced out of their home, nor will any landlord face unmanageable debts.”
Changes to rent
Many people on lockdown are unable to work. The Government has introduced a wide-ranging package of financial support measures, including 80% of pay for workers on furlough, easier access to Universal Credit and Statutory Sick Pay, and a £500 million hardship fund.
It has also promised that the Local Housing Allowance will cover at least 30% of the market rents in each area.
So most tenants should be able to go on paying their rent, but some may struggle.
As a responsible landlord, you’re strongly advised to work with your tenants to find solutions if they’re suffering financial hardship. You could agree to drop the rental price for a few months, or to defer payment until after the lockdown. If you can afford it, you could even waive rent for the duration.
It’s advisable to put your agreement down in writing, and make it clear it is temporary.
After the lockdown period has ended, you’ll need to agree a repayment plan. Again, the Government is advising you to work with your tenants to find a solution that works for everyone.
Changes to evictions: Coronavirus Act 2020
It’s vital that everybody has a home to stay in during the lockdown, for their own safety and for the good of public health.
Under the Coronavirus Act 2020, until 30th September 2020, landlords will now need to give their tenants at least three months’ notice before starting possession proceedings.
Once this notice period has expired, they still need to obtain a court order to evict tenants, and currently, all housing possession cases in the courts have been suspended for three months.
The Government is strongly advising landlords not to start possession proceedings before the end of September, or longer if the pandemic continues.
It also intends to extend the pre-action protocols that apply to the social housing sector to cover the private rental market. This means that private landlords will be obliged to try to reach an agreement with tenants before commencing court action.
Exceptions to the Coronavirus Act 2020
The Act applies mainly to tenancy agreements in the private and social housing sector.
It does not generally cover people whose accommodation is linked to their job, many of those who have licences to occupy rather than tenancy agreements, or lodgers.
However, such landlords are strongly advised to comply anyway.
Relief for landlords
Many lenders have agreed to provide mortgage holidays for anyone who cannot meet their payments. This includes landlords with buy-to-let mortgages whose tenants cannot pay rent.
Contact your mortgage lender if you need to arrange a break from mortgage payments but be aware that interest will still accrue during this period.
If you’re experiencing financial hardship, you may also be eligible for one of the Government’s schemes to support people during the Covid-19 outbreak.
Houses of Multiple Occupation (HMOs)
In HMOs, the Coronavirus can quickly spread throughout the household. However, you are not allowed to remove somebody from an HMO because they have the virus or are likely to come into contact with it, such as healthcare workers.
Nor are you obliged to find them separate accommodation.
Instead, try to encourage all housemates to follow cleaning guidelines and practise the recommended social distancing measures wherever possible.
How can you help your tenants?
Listen to their concerns. If there’s going to be a problem, it’s best to start tackling it at an early stage. Approach them by email or phone to check they’re ok.
If you do need to visit, respect the two-metre distancing rule and wash your hands thoroughly before and afterwards.
You are still legally obliged to carry out essential repairs to tenants’ homes. This includes anything that enables tenants to stay warm, healthy and clean, such as broken boilers, windows or washing machines.
However, you’ll need to shelve any plans for non-essential works such as decorating, and should take a pragmatic approach to inspections and maintenance work.
Finally, it’s not clear when this crisis will end, or when evictions will be permitted once more and Government has warned that it could extend the relevant legislation.
Indeed, many people are hoping it will lead to a permanent positive change in the private rental sector, with landlords and tenants communicating better and working together more closely to resolve issues.
Collaboration is also key when it comes to finding the right landlord insurance. Here at Stride, we have over 40 years of experience working with landlords to find tailored solutions that work for their unique circumstances. Call our team today on 0800 840 6699 to find out more.