New guidance from ARLA Propertymark’s legal helpline aims to provide landlords and letting agents with greater clarity based on frequent queries they have received as a result of the Coronavirus pandemic.
More than a week into the official Coronavirus “crisis” and there is still no clear guidance on the practical help that tenants can expect over the coming months to pay their rent, whilst how landlords and agents are expected to deal with the consequences of any “rent holiday” is, at this stage, pure speculation.
A request for guidance on a whole range of issues affecting the letting industry has so far not drawn any response from the Ministry of Housing.
Based on recent questions received from letting agents, here are a few thoughts from the landlord and tenant team at Dutton Gregory LLP Solicitors, which manages ARLA Propertymark’s legal helpline, in response to some of the calls received over the last seven days:
WHAT DO I DO IF A TENANT REFUSES ACCESS FOR A GAS SAFETY INSPECTION?
There are of course a few practical things we can suggest. Ask a tenant if they would be happy for a gas engineer to visit the property if the contractor was suitably protected – face mask, gloves, etc. Point out that it is for the tenant’s own safety that these checks need to be undertaken at least once a year.
If a tenant persists on refusing access, we are suggesting that you drop a line to the local environmental health officer pointing out the dilemma which is facing you and your landlord and ask for the local authority’s guidance. Personally, I do not expect that any response will be forthcoming but at least it puts down a marker that you and your landlord have tried to gain access. I think it is inconceivable that having been warned, a local authority will start enforcement action now or even once the crisis has passed. However, tenants who are refusing access must be contacted as soon as the politicians tell us that the crisis has ended.
THE GOVERNMENT SAYS THAT WE CANNOT SERVE NOTICES OR START NEW POSSESSION PROCEEDINGS
A pronouncement by our Prime Minister and the appropriate legislation being in place, are two quite different things.
The Coronavirus Bill 2020 was introduced to the House of Commons last week. Whilst it gives ministers the ability to make changes to the way in which the court system operates throughout the country, as yet there is no legislation to change the effectiveness of either a Section 8 or a Section 21 notice. Indeed, at the moment there are no specific regulations preventing a landlord issuing possession proceedings or enforcing an existing court order.
COURT HEARINGS
Again, the emergency legislation introduced to Parliament does not limit or cancel existing court proceedings at this time. However, courts are being encouraged to conduct more court hearings by telephone than ever before. This is bound to be a trend that will increase over the coming weeks until such time that the courts themselves are actually suspended.
EVICTIONS
There is no specific legislation preventing the enforcement of a current possession order and if needs be the eviction of a defaulting tenant. However, on Monday of this week, bailiffs in Portsmouth unilaterally decided that for health and safety reasons, they would not be entering a property where there was the remotest suspicion that an occupant might have the Coronavirus. This decision has now been replicated, more or less, across the country. It seems to have the backing of the Ministry of Justice, more I suspect, on the grounds of health and safety than a desire to ignore an existing court order. For the moment, we have not heard of a similar moratorium where possession cases have been transferred to the High Court for enforcement and where, of course, a landlord has the ability to instruct a “private” bailiff, a High Court Enforcement Officer.
Things are changing literally hour by hour but we will be here as long as it is considered safe to be at our desks to pass on what guidance we can.
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All very helpful but I need clarification on one key aspect; can we accept notice from tenants and can we move tenants into properties?!
I don't see why not.
As with everything we are seeing in the press and trade rags, it comes down to what is considered essential movement. There is a huge debate going on about completions and whether people can move home or not. Apparently Michael Gove has said yesterday if you have exchanged then completing is considered essential. I suppose the same principle will apply to lettings. If a tenant gives notice yes you have to accept it. Does a landlord therefore have to suck up the void period until these measures end? It certainly seems that speculative marketing is considered as non essential, but if you have a committed tenant who wants to move into a property when it becomes empty then I dont see why that cant happen. Will have to wait for further guidance I suppose.
If there is a housing shortage, it's crazy to force landlords to keep properties empty. The SNP obviously don't think there is a housing shortage as they have banned Scottish construction workers from working, even where they could do so safely.The UK Government seems to be trying to get a sensible balance.
Things have moved on and the country is on lock down with the aim of reducing the upper curve and saving the NHS from unmanageable overload . That means reducing movement by people as much as possible, including moving house, which would normally include 2 families, moving support such as removal van and drivers, utility companies and so on.
Although Mr Grove may have said " if someone has exchanged contracts they are obliged to complete" I am sure all parties would understand and a delayed completion could and should be applied. The courts would understand and support such a decision.
The same must apply to rental, you must stay put and wait to carry on where we all left off when we are advised it is safe and legal to do so!
Common sense must prevail.
Good Luck and stay well.
goves a twat
My current tenants tenancy ends at the end of the month and I have a new tenant due to move in on 1st April. My tenants have now left but their entire belongings are still in the property. A reputable moving firm was due to pick up the belongings today, but due to the guidance of (British Association of Removers (BAR) they have postponed the job until further notice. To add to that the management of the property are only allowing plumbers etc to enter the building for emergencies. I'm working with a new Estate Agent for the new tenant and they are talking about the tenancy Agreement and obligations but as we are in uncharted waters I don't think that's very helpful.
If the new tenant can pause, i'd be happy for that. My issue is if my new tenant stays where he is for the time being he won't be obliged to pay rent, and will I be able to be compensated from the government for this loss of income. The governments advice is so vague to say the least.
An update. My tenant did move their possessions finally by finding a new removal company that was still operating. However this meant I had to redraw up a new Tenancy Agreement with my new tenant which was pushed back from the 1st (his original date) to the 15th April. Because of this i've lost two weeks rent. There's nothing on the Gov.uk website that says anything about Landlord support during Covid-19 outbreak. I've asked my tenant whose moved out if he'll compensate in some way as a gesture of goodwill but really it looks like i'm the one that will have to carry this.
If the Government is helping self employed people earning up to £50k, it should also help landlords caught in this kind of dilemma but don't hold your breath! I really can't see what is so risky about allowing families to move their own stuff between properties. I accept we can't expect others to take that risk for us. However we need to remember most people have a mild illness and are able to be back at work in two weeks, so there should be a growing immune workforce as time goes on.
Hi, A quick question. My wife relies on the rent from her properties to live on. With the tenant rent holidays likely to bite, her income will disappear. As far as I can see, the only help is a BTL mortgage interest holiday but that does not bring money to her - no rent paid = no income.
As far as I can tell, she will not be considered self employed so what options are available to her for some form of income support? Just universal credit or am I missing something here?
Nobody seems to reply here. As far as Gov.uk state it seems all the focus is on current tenants and their rent. I think you are right as things presently stand it's just Universal Credit if she were to qualify.
Hi Antony. Current guidance from government is published FYI. Google Covid 19 guidance for LLs & TTs. TTs are not entitled to rent holidays, and HMG hasnt even implied they can have one, but up to your wife whether she agrees to one. Lobby groups have made so much noise about them that many LLs think they exist or have to give one.
I have only seen 5 BTL lenders offer a holiday so far, so dont assume you will be entitled one, best check. It is not a right as HMG would have you believe on TV, there will be an application process as well, albeit most lenders underwriting depts are closed, so you could be in for a wait.
No you arent missing anything. The self employed offer isnt as generous as Mr Sunak would have us believe anyway. It is based on average profit from last 3 years declared in accts in tax returns, so very few people will be eligible for much. Directors dont qualify either. So yes, universal credit, but again there is a 100+ page application form which normally takes weeks to process even when the DWP isnt processing 1000s of extra claims.
Hi,
We offer landlords guaranteed rent where we take the property on a lease agreement between us and the landlord and sublet the property. Coivd-19 has had a huge impact and as a result tenants are not capable of paying full rent. I would like to know where we stand on this, are we still obliged to pay the landlord the full rent or do we notify them and duly pass on all rents received from the tenants even if they are not full amounts?
Hi Sharan,
If you and I had a lease agreement and you sublet my property, I would want you to continue paying me the full price we originally agreed upon, I'm afraid.
Us landlords have been messed about too much by this government, and I feel that we now have to start drawing the line.
I would be quite happy to discuss a rent plan with you. For example, pay what you can now, and the rest when possible.
This would be my gesture of goodwill, because let's not forget, although we remain compassionate in this terrible situation, we must not lose the fact that business is still business.
I would still want to be there for you and your tenants once this all blows over, but if I don't eventually get my money, I would go bankrupt, which means we would both lose.
My granny once said to me "If you keep the strong, strong, they will continue to look after the weak. But if you weaken the strong, and you all become weak, then who looks after who?"
Hi Sharan, you are obliged to continue paying the rent as normal, the 2 agreements are separate and not relevant to each other.
With an offer from you to guarantee rental payments to Landlords, you must surely have a pretty substantial insurance cover to protect yourself?
I assume you are not under the misapprehension that all tenants pay all rent in full, at all times?
If so, then you are mad!
If not, then I assume that because of your very attractive yet foolhardy, guarantee, you MUST pay the Landlord what you have promised.
Thank you for your reply, from what I know this is not an insurance related rent guarantee, therefore the answer to your question would be no. I wanted to know from a legal point of view what options we have
Thanks
Really?!! Really!???? You really expect that you wouldn’t have to pay rent? What planet are you in? And I agree your promise of rent guarantee is ludicrous as you are now trying to get out of paying. A guarantee is a guarantee.,
This current CV19 issue is revealing the flaws in the RTR business model.
Of course the problem for LL is that the RTR LL absconds and there is little a LL can do about it.
There is no such thing as a RTR guarantee unless you are a corporate with company reserves.
There is NO insurance company that will guarantee rent for RTR's.
The RTR guarantees are worthless which is why I wouldn't consider entertaining the strategy.
Major RTR operations like Northwood are a better risk but they take a large chunk of rent for their risk of guaranteed rent.
I am currently in this scenario where I have a Guranteed Rent Lease Agreement (started in June 2019, 5 year lease) and the Agent has written to withdraw the guarantee "due to Covid-19" and also advised that they will only pay me if / when tenants pay.
I want to find out what legal recourse I have to;
1. Ensure rent is paid, including the arrears that will undoubtedly build up.
2. How To end the lease. I do not mind inheriting any existing tenants in my property, even if they are not paying rent. I can take the loss, but just want clear of this agent outfit.
Any pointers would be highly appreciated.
Sounds to me as if the agent has already broken this agreement, I would be talking to the tenants direct.
Hi Syed, it will all be in the small print of the agreement. If they have a clause saying they can under certain cirucmstances suspend of cancel the gauranteed element then there may be little you can do, if there isnt then you can challenge it or declare they are in breach of the terms. I found an agreement this week (not to do with lettings) where they actually had a pandemic clause buried in very tiny writing near the back. When you sign them you pretty much ignore these clauses as you think they will never be applicable so you dont question them. Who would when it has never happened?
Yep give agents notice - that you are going to manage it.
The lease agreement is pretty basic and luckily with no hidden clauses. I will declare breach of terms and try to get property back - even with tenants.
Thank you for the reassurance. I might need a good legal rep now. This agent will not play easy.
Good, if the agent doesn't like it invite him to take you to court, he would be laughed out of court if he were stupid enough to try it, which of course he won't.
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