As the spread of the global pandemic continues its course, the UK Government has sent a clear message to the nation: Stay at home. Many residents in the UK are not homeowners, though tenants in rented accommodation. Currently, COVID-19 is the cause of many losing their jobs and others will have had their income reduced by 20%, yet rental agreements are still in place and need to be adhered to. Tenants are concerned that they will not be able to pay their rent and landlords will be mindful of mortgage payments that still need to be met. Nevertheless, emergency legislation has been enacted with the aim of providing a solution to these problems. Therefore, the purpose of this article is to address the changes introduced by the UK Government in emergency legislation and how it affects residential tenants and landlords.
The Coronavirus Act 2020 is the name given to the emergency legislation introduced into UK law and effective from 26th March 2020. It looks to protect tenants who may be unable to pay their rent and encourage landlords to consider flexibility in their approach.
First of all, tenants must continue to pay their rent though if they are unable to do so, they must speak with their landlord and the earliest opportunity. There are a range of possibilities that could be considered – payments in instalments or rent reductions for the duration of the pandemic. An open and frank conversation with the landlord as soon as a tenant can foresee the possibility of running into difficulties is the best approach.
A landlord’s biggest concern is receiving their income however, given the circumstances, there is a chance that an agreement could be struck. By agreeing to a rental reduction, a landlord can guarantee that he will continue to receive an income against the possibility of not receiving anything otherwise. Another option could be to consider a deferral in rental payment during the pandemic and establish a payment schedule. Nonetheless, there is no legal obligation for a landlord to agree. If a tenant cannot pay the full amount, a partial payment of rent is always better than not paying anything at all. Consequentially, a tenant must ensure he keeps record of any offer and payments of rent made to the landlord as this can be seen as an act of good faith and intention from the tenant.
Furthermore, if the landlord and tenant agree a plan to pay off arrears at a later date, it is important that both parties work together to establish an affordable repayment plan which is adhered to. As income is a landlord’s primary concern, he can take comfort in the fact that many banks have already offered a 3-month break on mortgage payments. However, this means that if a landlord misses any mortgage payments in the next three months, their mortgage lender will not look to repossess their property. Unfortunately, not all banks have offered this relief and it is not a legal requirement to do so. Although interest will continue to accrue during this period, this is a positive measure taken by financial institutions and should encourage tenants and landlords to consider their best option moving forward during the pandemic.
In the event that the tenant is unable to pay rent and the landlord looks to evict the tenant, they must issue a notice seeking possession of the property. This notice has a 3-month expiry date and a landlord will not be able to take further action until then. At expiry, a landlord would need to apply to the courts for a possession hearing and cannot force a tenant to leave without a court order. This would normally take around 6 to 8 weeks, however given the current pandemic, it is likely to take longer. On the other hand, if a landlord has already issued a tenant with a notice of intention to possess, he will not be able to take further action until 3-months have passed, starting from the 27th of March 2020. As this is not a situation that benefits the landlord, it should encourage both parties to adopt a flexible and open approach to the situation.
The UK Government has advised everyone to stay at home, to work from home where possible and to protect yourself and others. Nevertheless, this does not relieve a landlord of their duty to ensure inspections are carried out on properties and it does not change landlord repair covenants. There is still a need to abide by existing gas and electricity safety regulations and a landlord still has a duty to maintain a decent, warm and safe place to live. This means that dangerous conditions need to be addressed and cannot persist. Dangerous conditions can be seen as urgent health and safety issues affecting the tenant’s ability to live safely and maintain good mental health. Where a roof is leaking, a boiler is broken and there is no hot water, or where a plumbing issue affects toilet or washing facilities, a landlord should seek to repair this issue. These matters are a collection of issues the UK Government has highlighted as a health and safety issue, though it is not a closed list of matters. A broken washing machine or fridge and a broken front door or window are safety critical matters that are also included as examples of issues that must continue to be addressed. If something needs to be repaired, the tenant must make a local authority, contractor or landlord aware, and follow Government and Public Health England guidance with allowing access to the property.
Finally, in those cases where tenants are looking to move properties and landlords have arranged a viewing for a sale or let, they are encouraged to follow Government advice to stop the spread of the virus. If possible, a tenant should look to remain at the property they are currently in and a landlord should refrain from allowing others to visit a property for a viewing. If this is impossible due to a timeframe in a signed contract, it can be advisable to consider renegotiating timings with the parties involved.
This article is not intended to be all encompassing: nor does it constitute legal advice. However, please get in touch with us if you require more advice on any query. We will be able to help with the issues addressed in this article or any others, whether on real estate matters or any wider business issues. We have a dedicated team addressing enquiries for our real estate clients.