Government publishes advice for landlords and tenants during the coronavirus crisis
The Government published ‘COVID-19 and renting: guidance for landlords, tenants and local authorities’ on 28 March 2020.
This guidance gives details of measures to help renters during the current coronavirus crisis. It clarifies the proposals, which the Government announced previously, for a temporary ban on evictions.
These measures could give renters some relief. But, if you are a buy-to-let landlord, you may be worried about what will happen if your tenant fails to pay the rent and you cannot get your property back.
The guidance stresses tenants should continue to pay their rent where they can and to discuss any problems with their landlord. Your tenant will still be liable for the rent during their occupancy. If they are struggling financially because of the crisis, the possibility of missed payments and default increases. So, it makes sense to address any issues proactively. This could involve agreeing a deferral of some of the rent together with a plan for paying off arrears later. Further, if tenants are falling into arrears and this is affecting a landlord’s ability to pay an associated mortgage, landlords are encouraged to speak with their lender to see if a payment holiday can be agreed.
The guidance explains the effect of the new Coronavirus Act 2020 on possession proceedings. The Act increases the period of notice a landlord must give to a tenant before issuing proceedings to recover possession of property under most types of tenancy. The majority of notices must now provide three months before proceedings can be issued and if the Government considers it necessary, this could be increased to six months in the future. Landlord’s should be aware that this three-month notice period applies equally to non-fault possession proceedings under Section 21 Housing Act 1988 and fault-based possession proceedings under Section 8 Housing Act 1988
In theory, the Act does not prevent you serving notice, or affect a notice which has already been served. However, any proceedings issued will be stayed for a period of 90 days. This means any action to evict your tenant will be paused, and the guidance strongly advises landlords against commencing or continuing eviction proceedings during the current crisis.
The coronavirus crisis is affecting both landlords and tenants in unprecedented ways, and there may well be further changes in the forthcoming months. You can, however, reduce the risks by keeping up to date with developments and discussing any potential issues with your solicitor early on.