Help for Residential Landlords & Tenants

The government announced on the 18 March 2020 a radical package of measures to protect renters and landlords affected by coronavirus. The aim is to ensure that no renter in either social or private residential accommodation will be forced out of their home during this difficult time.

Emergency legislation is being taken forward as an urgent priority, so that landlords will not be able to start proceedings to evict tenants for at least a three-month period. The aim of these measures is to ensure that no renters in private or social accommodation needs to be concerned about the threat of eviction. The scope of the provisions is not yet clear. This may only cover those in financial difficulties and rent arrears, leaving options open to still deal with problem tenants. We will know more as the draft legislation is published.

The government has also recognised the additional pressures the virus may put on landlords and have confirmed that the three month mortgage payment holiday announced earlier this week will be extended to landlords whose tenants are experiencing financial difficulties due to coronavirus. Again, it is not yet clear what the mechanism will be for claiming this relief.

This aim is to alleviate the pressure on landlords, who will be concerned about meeting mortgage payments themselves. So it is expected that no unnecessary pressure should be put on tenants as a result.

At the end of this period, it is expected that landlords and tenants will work together to establish an affordable repayment plan, taking into account tenants’ individual circumstances. These arrangements will need to be properly documented to ensure adherence and no knock-on impact longer-term on the rights under the Lease.

The ‘pre-action protocol’ on possession proceedings is now being extended to include private renters and to strengthen its remit. This will support the necessary engagement between landlords and tenants to resolve disputes. Critically, it will put an onus on Landlords to reach out to tenants to understand the financial position they are in.

The government are also expected to issue guidance which asks landlords to show compassion and to allow tenants who are affected by this crisis to remain in their homes wherever possible.

New measures are being issued daily and these remain uncertain times. While we wait for clarification of the new measures, Landlords are encourages to reach out to their tenants and open a dialogue to work together through the crisis. It is better to have a proactive and planned approach that safeguards the interest of both parties, rather than allowing tenants to drift into arrears and panic.

If you make any temporary arrangements with tenants, these should be recorded in writing and include the following considerations:

• Any arrangement should be specified to be ‘agreed without prejudice to the terms of the lease’
• You need to have what is to be paid and when clearly recorded to avoid future disagreement. There is an expectation for Landlords to be flexible and fair in what is agreed.
• If there is to be a payment holiday to coincide with a 3 month mortgage holiday for the landlord, then either a repayment plan or provision for one to be put in place upon review at the end of 3 months should be recorded. The expectation is that the rent should still be repaid by the tenant over time.
• If there is a reduced rent or alteration to the timing of payments, then a time period for which the arrangement will be put in place should be recorded. For example, it may be in place for 3 months and then subject to review.

If you need assistance putting arrangements in place with tenants please contact our Claire-Elaine Arthurs at claire-elaine.arthurs@gunnercooke.com.