The economic impact of the coronavirus pandemic on residential tenants and landlords cannot be underestimated.
Many tenants have lost some or all of their usual income, as a consequence of which they are no longer able to pay their rent. This is having a knock-on effect on landlords, who are still required to comply with their mortgage payment obligations but are not receiving the necessary level income from their tenants to meet these obligations.
If the scenario outlined above sounds all too familiar, there are steps that landlords and tenants can take with a view to easing financial burdens during these unusual and difficult times.
Landlords and Tenants - teamwork
Landlords and tenants should try and work together to agree more flexible arrangements in respect of rent payments. Such arrangements may include but are not limited to deferred payments and payment plans.
This approach is being actively encouraged by the Government and should be seriously considered as a mutually beneficial way forward for landlords and tenants alike. It is hoped that more flexible arrangements will help to keep tenants in their homes for longer and will also help landlords to recover rent arrears without the need to resort to litigation at a future point in time.
Word of caution - when agreeing such arrangements, Landlords must be clear that such arrangements are made entirely without prejudice to their legal rights, which should remain fully reserved at all times.
In the event that tenants are financially affected by the coronavirus pandemic, Landlords should consider applying to their mortgage provider for a 3 month mortgage payment. Landlords are expected to pass this relief onto their tenants. This should serve to alleviate the financial pressure on the landlord if the tenant is unable to pay rent; it should also mean that no unnecessary pressure is placed upon tenants currently experiencing financial difficulties as a consequence of the pandemic.
Whilst the pandemic remains ongoing, Landlords are not permitted to commence possession proceedings. Furthermore, up until 30th September 2020, Landlords must provide tenants with at least 3 months' notice prior to the commencement of the same (the Coronavirus Act 2020 refers).
Tenants are encouraged to speak to their local authority, who should be able to provide useful advice and assistance. Local authorities may also be able to provide access to a hardship fund if deemed necessary and appropriate depending upon individual circumstances.
Tenants experiencing financial difficulties should also check to see if they are eligible for Universal Credit.
If you are a landlord or tenant currently experiencing problems with rent arrears and require further advice, please contact the Dispute Resolution team on 01245493939.
This is not legal advice; it is intended to provide information of general interest about current legal issues.