10th April 2020
As Covid-19 has swept the UK the Government have put in place measures and regulations to ensure that individuals, families and businesses are supported in order to keep going.
If you are a landlord, whether you have one property that you let out privately or a large property portfolio, there are a few things that you now need to be aware of in order to comply with new regulations.
Homeowners and landlords are entitled to a 3-month mortgage payment holiday. All lenders are enforced to offer this in order to help people in financial hardship and keep them from losing their homes. Landlords who have tenants that are struggling to pay their rent will need to provide proof of this in order to apply for a mortgage holiday themselves. You will need to check that you qualify for this, so speak to your lender.
In order to offer tenants some protection during the coronavirus pandemic, there is a ban on tenants being evicted by their landlords until June 2020. No new claims will be heard at court for 90 days, but this may be extended if matters continue to worsen. The government is expecting landlords and tenants to work together to come up with feasible plans to stop anyone being in a vulnerable position at these times.
Until September 2020 Landlords must give their tenants 3 clear months’ notice if they wish to terminate the tenancy or sell the property.
To adhere to social-distancing rules some changes have been temporarily made for landlords conducting right to rent checks. Checks can now be carried out by video call and ID / documents can be sent via email or a mobile app.
Landlords should encourage their tenants to abide by regulations and limit contact as much as possible. Now is not the time to visit your tenants, carry out inspections or non-urgent home improvements. However, you do still have a duty to maintain properties that you let out and if urgent repair works are needed then you must organise this to be done safely without putting you, your tenants or contractors at risk.
The Government have essentially put a freeze on the property market with very few transactions taking place since the end of March. This means that you are unlikely to be able to purchase at the moment and mortgages will be difficult to obtain as banks are not actively lending. On top of this most estate agents are closed or working remotely without property visits, valuations or viewings taking place.
During this time there will be very little movement in the rental market either. Your tenants may well be coming to the end of their tenancy or want to move out, perhaps to be with family during this time. But it will be difficult for you to re-market the property and move in new tenants. If you have a vacant property you may wish to consider using this time to make repairs and improvements to the property (as long as it is safe to do so under the latest government guidance) or take advantage of a mortgage holiday on the vacant property so you are not out of pocket. You may need to be mindful that clients could be stuck renting for longer than anticipated due to their purchases or future rentals being on hold. You will need to discuss with your tenants how this is managed.
This is a time where the country needs to all pull together in order to survive and come out the other side of this challenging pandemic. You may need to think outside of the box when it comes to ensuring the protection of your income and the safety of your tenants. Are you in a position to offer good tenants a rent break? Can you take weekly payments if this helps? Are you able to temporarily offer them a reduced rent if their income has decreased? Can you point them in the direction of help, such as Universal Credit?
Although we outline above some ideas on how to support your tenants during this difficult time, it is important to be compassionate but firm at the same time. This is not an excuse for renters to fall behind on their rent and rely on the new protection or kindness of their landlords. Landlords have mortgages and bills to pay too. Be clear about your expectations and let them know how they should contact you about any issues in paying their rent.
This will not last forever and although it is hard to see the light at the moment, we know that the UK will come out the other side of this. You will still want to keep hold of reliable tenants who keep your property in good condition and keep up to date with their rent.
Remember that giving payment holidays may affect your income and tax bill next year, so ensure that you have documented everything clearly and speak to your bookkeeper or accountant for advice.
Make sure that you follow the terms of your tenancy contract and keep copies of all communication with your tenants. Work out what your critical figure is. What bills can be reduced or delayed? Do you have funds elsewhere that you can draw on? Although it is nice to be generous during these difficult times (especially if you have long-term tenants that you have become fond of) you need to ensure that you are not putting yourself in a vulnerable position.
As we all feel the pressure, take this time to look at your property portfolio as a business and consider where you can make cuts and changes. Perhaps you can review your landlord’s insurance? Negotiate a better deal with the letting agent that you use? Or consolidate all your utilities using a comparison website or broker?
For further information or legal questions about property, landlord and tenant matters or disputes please get in touch with our Property Law Team who continue to offer advice and property services during this time.
If you are using this time to tidy up your property portfolio, re-mortgage or are getting properties ready to sell, then please speak to our experts who can provide you with an estimate to help you on your way.
Call our switchboard on 01256 844888, email firstname.lastname@example.org or visit our website for more information or to speak to our online assistant who is available 24/7.
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The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.
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