Where do I start? Every industry is affected by Covid-19 and the complete shutdown of business.
We are in unchartered waters and all just trying our best to adapt to this new, hopefully temporary, ‘norm’.
I have been inundated with phone calls from landlords worried that their tenants may not be able to pay the rent because of possible job losses, and my sympathy goes out to every tenant and landlord facing such uncertainty. What I cannot stress is enough is we are all in this together and therefore must work together to come through the other side.
So, what do we know?
The government has brought in lots of new legislation and fiscal measures to try and help ease the burden of this virus, from the job retention scheme and non-repayable grants to increasing Universal Credit and deferring income tax and VAT payments. But we know for many, it is still going to be a real struggle to stretch finances over the next few months, so it is understandable that both tenants and landlords are concerned.
Notice period extended:
Until September 2020, landlords must give tenants three months clear notice for all Section 8 and Form 6a (Section 21) notices. This law may possibly be extended.
The Ministry of Housing, Communities and Local Government (MHCLG) has also halted all ongoing housing possession claims.
Therefore, no new claims can be issued, any hearings will be adjourned and also bailiff appointments will be vacated for this three-month period. This suspension of housing possessions action will initially last for 90 days, but this can be extended if needed. The government has made it clear no tenant should face eviction during this pandemic.
Tenants’ still liable: However, guidance also states that tenants are still liable for their rent and should continue payment as usual, with support available to those who find themselves in financial hardship.
Mortgage holiday available:
The Government has also introduced a ‘mortgage holiday’ of up to three months for landlords whose rental income is affected. Landlords apply to their lender for this and must be able to prove that their tenants have been affected by Covid-19.
First of all, communication is key, now more than ever. I am urging landlords to work with their tenants. Pick up the phone, drop an email, send a text, reach out to see how they are affected by this crisis and similarly explain how it is affecting you.
Letting agents’ branches have had to close, although some do have skeleton staff answering the phones remotely. If you have your property managed, you may want to contact the letting agent to see if they have spoken to the tenant, otherwise get in contact with the tenant yourself.
No viewings, check outs, inspections or inventories will be taking place.
The Government has advised against move-ins, but if there are contractual obligations, then the guidance of maintaining a safe distance must be adhered to. Landlords remain legally obligated to ensure properties meet the required standards therefore landlords still need to deal with urgent essential health and safety repairs, especially for elderly and vulnerable tenants. Nonessential work can be delayed but I would advise landlords to keep a record of communication explaining to tenants why certain maintenance requests have not been carried out.
Support your tenant
Many landlords choose to evict tenants when they fall into arrears, but as we all know, these are unprecedented times, and landlords will find that previously punctual tenants may struggle to pay rent on time. That is why it is in the best interest of all tenants and landlords to work together, understand each other’s limitations and establish a reasonable payment and review plan when the time is right.
The government is also looking to strengthen the “pre-action protocol” on possession proceedings to include private renters – meaning that private landlords looking to begin possession proceedings will have to engage with their tenants more extensively first.
This will help landlords and tenants to agree reasonable repayment plans where rent arrears may have arisen as a result of the crisis.
If your tenants have been forced to reduce their earnings, what capacity do you have to mirror this in their rent?
If you are struggling to keep up with mortgage payments, contact your lender as soon as possible to see if you can take a mortgage holiday. Ultimately, landlords want to retain good tenants and tenants want to remain in their homes, so my plea to you all is to take a long-term view and support each other.
As a leader in this industry and a landlord’s advocate/friend, I promise to help you as much as I can. If you have any questions or need some advice feel free to write to me. Paul@landlordaction.co.uk or reach out to me on LinkedIn or Twitter.