Since the Coronavirus pandemic broke out, there’s been a fair amount of uncertainty felt across the country – and the world. For property investors, landlords and tenants, one of the main questions we’ve been asked is ‘how is Coronavirus affecting evictions?’
The Coronavirus has already had a huge impact on many industries with the number of unemployed people rising by the day. The government has released a wave of financial packages to help during these testing times but unfortunately they won’t help everyone and many will still experience financial hardship, even with these packages available.
We’ve previously covered the main points of these financial packages and the buy-to-let mortgage payment holidays, but many landlords (and tenants) are still wondering what options are available to them should they wish to terminate tenancy agreements during the Coronavirus pandemic.
Here’s a summary of the main changes to possession
The government introduced a new emergency legislation that means landlords are unable to proceed with eviction tactics while the country continues to be in a state of emergency.
Courts will not accept any new possession proceedings during this time either.
The original announcement by the government suggested a ban on serving notices was possible, however landlords can continue to serve notices to quit with a Section 21 or Section 8 if necessary. But if you do, you must do this in line with the new notice period.
The government is encouraging dialogue between landlords and tenants to minimise financial hardship for both parties.
Buy-to-let landlords are able to take advantage of the buy-to-let mortgage payment breaks and are expected to pass this break over to tenants who have been affected by Coronavirus.
At present, these financial measures are available for three months. After this, landlords and tenants should be able to agree an affordable repayment plan to bring rental payments up to date.
The government is aware that this dialogue might not always run smoothly and already have plans to support the communications between landlords and tenants to resolve any disputes.
The government has made it clear that they expect landlords to show compassion during these times and do everything they can to help tenants remain in their homes where possible.
The aim is for no tenant to lose their homes as a result of the Coronavirus.
The financial packages and guidance issued will be in place for three months initially. However, these can be extended at any point should the pandemic continue.
If tenants are able to continue paying their rent as normal, they should make every effort to do so. The government assistance is in place for those affected by Coronavirus and is not intended to be used where not warranted.
Tenants should communicate directly with their landlord to explain that they’ve been affected by Coronavirus. This can then help the landlord make a decision on whether they need to speak to their lender and apply for a payment break or to come to another conclusion directly with the tenant – for example, for a certain proportion of the rent to be paid, or for a complete rental break until the tenant gets back on their feet.
As with any payment breaks, repayments will need to be made. Landlords and tenants should come to an agreement on how to repay the missed/reduced rental payments that is workable for both parties. This might be as simple as increasing the monthly payments slightly until the end of the tenancy to cover the missing ones.
It’s worth landlords being aware of the Coronavirus Job Retention Scheme and highlighting to tenants that this might be something they could take advantage of, if their employer is willing.
Many of the government financial packages lack detail right now. However, lenders have been quick off the mark to provide relief for those who have mortgages and are likely to be affected.
Tenants: It’s important that they communicate with landlords to reach a sensible resolution for both parties if they’re affected by Coronavirus.
Landlords: It’s equally important that you understand the impact Coronavirus is having on a tenants’ ability to continue paying rent and you should work in partnership to come to an arrangement that benefits both parties.
Have a read of the government guidance for further information on what you can do. The government have also put together a complete guide for both landlords and tenants which will be beneficial to read so you know your rights.