Watkins Ward Group Investigations reviews latest COVID advise for landlords and tenants
The purpose of this advisory guidance is to help landlords and tenants review the implications of the Coronavirus Act 2020. The Act provides protection to social and private tenants by delaying when landlords can start proceedings to evict tenants. The provisions of the Coronavirus Act 2020, which increased the required notice period length, have now been extended through legislation.
This means that from 29 August 2020, with the exception of the most serious cases, landlords are not able to start possession proceedings unless they have given their tenants 6 months’ notice. These serious cases include those in relation to anti-social behaviour (including rioting), domestic abuse, false statement and where a tenant has accrued rent arrears to the value of over 6 months’ rent.
The stay on possession proceedings expired on 20 September 2020 and landlords will now be able to progress their possession claim through the courts. Courts will carefully prioritise the most egregious cases, such as those involving anti-social behaviour and other crimes. Longer notice periods and new court rules apply whilst the period of national restrictions is in place and apply in all local tiers when the national restrictions are lifted.
To protect against Coronavirus (COVID-19) transmission, the government has changed the law to ensure bailiffs do not to enforce evictions in England over the period of national restrictions, which are in force until the beginning of the day on 2 December, and, following the lifting of these restrictions, there will be no bailiff enforcement throughout December, and over Christmas, until 11 January 2021. This means that no eviction notices are to be served until 11 January at the earliest and, given the 14 day notice period required, no evictions are expected to be enforced until 25 January 2021 at the earliest. The only exceptions to this are the most serious circumstances: illegal occupation, false statement, anti-social behaviour, perpetrators of domestic abuse in social housing, where a property is unoccupied following the death of a tenant and extreme rent arrears equivalent to 9 months’ rent with any arrears accrued since 23 March discounted.
Repairs, maintenance and health and safety
Tenants have a right to a decent, warm and safe place to live. Where safe to do so, it is in the best interests of both tenants and landlords to ensure that properties are well maintained, kept in good repair and free from hazards.
After the national restrictions have been lifted, then landlords can take steps to carry out repairs and safety inspections.
As a tenant, should I stop paying rent during the pandemic?
Tenants should continue to pay rent and abide by all other terms of their tenancy agreement to the best of their ability. The government has made a strong package of financial support available to tenants, and where they can pay the rent as normal, they should do. Tenants who are unable to do so should speak to their landlord at the earliest opportunity.
In many if not most cases, the COVID-19 outbreak will not affect tenants’ ability to pay rent. If your ability to pay will be affected, it’s important to have an early conversation with your landlord. Rent levels agreed in your tenancy agreement remain legally due and you should discuss with your landlord if you are in difficulty.
What can I do about rent arrears?
Tenants should continue to pay rent and abide by all other terms of their tenancy agreement to the best of their ability. Tenants who are unable to do so should speak to their landlord at the earliest opportunity.
As part of the national effort to respond to the COVID-19 outbreak it’s important that landlords offer support and understanding to tenants who may start to see their income fluctuate.
An early conversation between landlord and tenant can help both parties to agree a plan if tenants are struggling to pay their rent. This can include reaching a temporary agreement not to seek possession action for a period of time and instead accept a lower level of rent, or agree a plan to pay off arrears at a later date. Where a landlord does choose to serve notice seeking possession for rent arrears or has done so already, the notice period and any further action may be affected by legislation lengthening the notice period.
Where appropriate, if disputes over rent or other matters persist, landlords and tenants are encouraged to consider mediation. Mediation allows an independent third-party to assist those involved to try to reach a mutually acceptable agreement to resolve their dispute, without the matter needing to go to court.
If a landlord and tenant agree a plan to pay off arrears, it is important they both stick to this plan, and that tenants talk to their landlord immediately if they are unable to do so.
A major package of financial support to enable people to continue paying their living costs, including rental payments. This includes support for businesses to pay staff salaries through the Coronavirus Job Retention scheme and we have strengthened the welfare safety-net with a nearly £9.3 billion boost to the welfare system.
The Coronavirus Job Retention Scheme has been extended until March with employees receiving 80% of their current salary for hours not worked and further economic support announced. The Job Support Scheme, which was scheduled to come in on Sunday 1 November, has been postponed until the furlough scheme ends.
If tenants fall into financial difficulties due to a change in their employment or earnings, for example, they may qualify for Universal Credit. Property Guardian licence agreements are a valid tenancy arrangement for receiving housing costs support in Universal Credit. Students are also able to claim Universal Credit under certain circumstances. Find more information.
Local authorities can provide support for tenants to stay in their homes. If tenants are experiencing financial hardship, they may be able to access new funding; we have made £500 million available to fund households experiencing financial hardship and are determined to take action to support people in need.
For those renters who require additional support, there is an existing £180 million of government funding for Discretionary Housing Payments for councils to distribute to help people with rent payments in the private and social rented sectors.
I’m a landlord. What can I do about mortgage repayments?
The mortgage holiday will be extended, with applications open to 31 January 2021. Borrowers, including those with a Buy to Let mortgage, who have been impacted by Coronavirus and have not yet had a mortgage payment holiday will be entitled to a 6-month holiday, and those that have already started a mortgage payment holiday will be able to top up to 6 months without this being recorded on their credit file.
The Financial Conduct Authority (FCA) has been clear that for borrowers who have taken 6 months’ holiday and continue to face ongoing financial difficulties, firms should continue to provide support through tailored forbearance options. This could include granting new mortgage payment holidays. Mortgage customers in this situation should speak to their lender to discuss their options.
If a landlord is concerned about their financial situation they should discuss this with their lender.
There will be a moratorium on the enforcement of lender repossession until 31 January 2021, except for in exceptional cases (such as a borrower requesting proceeding continue).
I’m a shared owner. How does this affect me?
Most shared owners will pay both rent and a mortgage. Like other mortgage holders, shared owners who are struggling to meet their mortgage payments as a result of COVID-19 will be able to access the support outlined above. Most shared owners will also be covered by the Coronavirus Act 2020, meaning their landlords will not be able to start possession proceedings unless they have given shared owners the required notice. There is further information about the provisions in the Coronavirus Act 2020 at section 1.8.
Shared owners should continue to meet their financial commitments where possible. The government has introduced a strong package of financial support, so where they can, shared owners should still pay the rent to their landlord and mortgage to their lender as normal. Shared owners who are unable to do so should speak to their landlord and mortgage provider at the earliest opportunity.
As a landlord, should I stop charging rent during the pandemic?
Landlords are not required to do this. Most tenants will be able to pay rent as normal and should continue to do so, as they will remain liable for the rent during this period.
There is no ‘one-size fits all’ approach, as each tenant’s circumstance is different, and some will be worse affected in terms of their ability to pay than others. It is important for landlords to be flexible and have a frank and open conversation with their tenants at the earliest opportunity, to allow both parties to agree a sensible way forward.
Is my money protected? – Tenancy Deposit Protection and Client Money Protection
The deposit protection requirements have not changed. Landlords (and agents acting on behalf of landlords) must continue to uphold all their legal obligations relating to Tenancy Deposit Protection, and the usual process to return a deposit should be followed if a tenancy ends during the pandemic.
Client Money Protection requirements have also not changed. All agents who hold money on behalf of landlords and tenants are required to comply with the legislation on Client Money Protection.