With so much change facing the nation and unanswered questions leaving landlords feeling nervous and unsure, it is no surprise that both landlords and tenants are finding things confusing.
Many of you joined the Howsy team and Landlord Action’s Paul Shamplina as we worked through some of the trickiest issues facing landlords today – from how to manage essential maintenance, to managing tenant relationships.
You can watch the video playback of the webinar below:
We received many questions regarding this topic, and have done our best to answer them fully. You can check out the answers below:
Q. Is there any help from the government for landlords?
A. There are a few schemes that landlords can take advantage of that are aimed at preventing money being spent – such as rental property mortgage deferrals. Scottish landlords (who own five or less properties and are not classed as businesses), can now benefit from interest-free loans which cover up to 100% of lost rent if their tenants are having difficulty paying rent during the crisis. However, there are currently no grants or loans specifically aimed at landlords.There are a number of grants, loans and tax breaks that could help landlords during this time, but much depends on personal circumstances. To see what you personally are eligible for, click here.
Q. In the event that a tenant is made redundant and is unable to pay the rent, what can the landlord reasonably expect and for the long term?
A. This really does depend on the tenant and landlords’ circumstances. It is likely that the tenant will be in the process of claiming Universal Credit or housing benefit, so it might be worth looking up the Housing Allowance for your area and starting with that as a base figure. Speak with your tenant about their outgoings and what they can reasonably afford – it is better to receive a guaranteed amount for a period, than ask for an amount that they won’t be able to afford, even on month one.
Q. My rental rate has been fixed for 3 years and is now up for renewal. What is a reasonable fair amount to increase it by?
A. Now may not be the best time to consider increasing your rent, with most household taking significant hits on their incomings. However, if you do choose to, it is worth only increasing to within the market rent of your area, otherwise you risk pricing your property out of the market. Have a look on Rightmove and Zoopla for similar properties in the area, and set your figure accordingly.
Q. My overseas tenants plan to return home before the end of the contract. Are they still liable for the rent?
A. Yes, the contract is still active for the duration, unless it is ended by mutual agreement or invoking a break clause. If your tenants are returning home and you are happy for the agreement to end, you can agree to agreement mutually and remarket the property, which would require the agreement to cease to be set out in writing (email is fine).
Q. Can a tenant ask for payment holiday without providing any evidence of having been financially affected by COVID-19?
A. Your tenant is able to can ask, but you are under no obligation to agree to it. It is advisable to ask for some evidence of financial impact, as you many need to pass this on if you are planning to apply for a mortgage holiday.
Q. My tenant’s friend is replying to messages on her behalf saying she is in Intensive Care, and can’t use her phone to organise rent payment. What do I do?
A. That’s a tricky situation! If you have a guarantor, it may be a good idea to make contact with them – initially, gently to see if there is anything you can do to help, if the property needs checking etc. If you are unconvinced that the tenant is in hospital, their guarantor should be able to confirm or deny. If they are not in hospital, you could then pursue the guarantor for unpaid rent (if the tenant still fails to pay). Tread very carefully though, and remember to be tactful, it’s a horrible, horrible situation and one that nobody hopes to find themselves in.
Q. If my tenants are furloughed to 80% of their monthly wage, is it my duty to reflect that by offering a 20% discount on rent?
A. You don’t have a legal responsibility to do so, but at this time, it is a nice gesture if you are able. Building strong relationships with your tenants is key to a smooth ongoing relationship, and if you are able to work together to get through the tough time we are all facing – hopefully short term pain – they are more likely to be able to stay in the property, a great benefit to you in the long run!
Q. How do I set a repayment scheme if tenants fall into arrears?
A. Theoretically, the easiest way is to work out the defect, and the length of time left on the lease, and split the amount evenly. If there is an arrears of £1200, with six months left to go, you could add £200 to the monthly rent, for example. Whilst on paper, this makes sense, do consider that it is highly likely that your tenant will have ongoing financial issues that extend past this initial pinch point, so hiking the rent could lead to further arrears later down the line. If you are able to swallow any of the arrears, it’s great to do so, and then spread the repayments evenly, to a more manageable figure. Make sure everything is documented, and that the tenant agrees to the plan in writing.
Q. My retired tenant refuses to pay rent during the current lockdown. What do I do?
A. If your tenant has been reliant on a pension to pay the rent, it is unlikely that their income will have been impacted too heavily by the current crisis. It would be a good idea to ask for proof that there has been an income impact. If they are unable to provide this, notify them that you will have no option but to pursue for unpaid rent on once the ban on court actions is lifted, unless they are able to start payments again.
Q. Is it best just to negotiate with tenants who may not be able to pay this month’s rent?
A. Absolutely. Speak to your tenants and try to understand their financial situation If you can come to an agreement, it makes life significantly easier, and you will all know where you stand.
Q. Tenants moved in Dec and moved out January after one month. Since then the house has been empty. I’ve tried to ask for 3-month holiday on mortgage and been refused. What is the next step?
A. If the tenancy agreement has been ended, you can market your empty property, and see if there is an opportunity to get a new tenant in place. If the agreement is still ongoing, the tenant (and their guarantor) is still liable for the rent. There are also plenty of government schemes in place that may help you in the meantime, you can find out more here.
Q. My tenants are not paying. They claim it is because of C-19, yet they receive benefits. What do I do?
A. There has been no change to the delivery of benefits, so your tenant will still be receiving the correct amount. If you are in an area where Universal Credit is in place, you may be able to apply for an Alternative Payment Arrangement (there are certain requirements that must be met, more details are available here) where housing allocation is paid directly to the landlord. Speak to your local authority, they should be able to help.
Q. My tenants are self-employed and without income. How do you suggest I negotiate changes to the rent to both party’s benefit?
A. Registration for the Self Employment Income Support Scheme opened this week, which allowed individuals to check their eligibility and register for Government Gateway details. Those who are eligible will be able to claim a taxable grant worth up to 80% of their average trading profits up to a maximum of £7,500 (equivalent to three months’ profits), paid in a single instalment. It is hoped that payments will be made by the end of May. Self-employed loans have also been launched, which are available now, if eligible. Up until now, there has been little support for the self-employed, so if you can it may be worth speaking to your tenants about what they can afford now, or if they will be able to make a lump sum payment when the grants come through.
Q. Can I apply for managed Universal Credit payments without informing tenant?
A. Yes, you can do so online or through the post. You can start the process online here.
Q. If my tenant requests a rent payment holiday, does he have to make up arrears at later date?
A. Yes. Rent payment holiday is a red herring, the correct term is rent payment deferment, meaning that the amount payable is simply being shifted over to a time when the tenant can afford to pay the rent back. However, many landlords are choosing to allow complete breaks for their tenants, understanding that a significant drop in income is going to make it difficult to make p such a hefty deficit.
Q. How to get gas safety certificates done during lock down period?
A. If your gas safety check needs to be carried out during lockdown, you should make all efforts to ensure that it is still done. Speak to your tenant and engineer before it takes place, and remind them both of the relevant social distancing requirements – this may be tricky but it is very important. Your engineer may also be wearing PPE (face masks etc) so pre-warn your tenant that this may be the case.
Q. What to do when tenants refuse access for gas safety tests, as potentially this means you can’t serve notice.
A. If your tenant is self-isolating, it is likely that they will not want an engineer to enter the property, nor would it be safe for the engineer to do so. In this instance, correspond with your tenant in writing (email is ideal) getting dates of isolation, and ask them to confirm in writing that they will not allow access. Ask for a date in which they would be happy for you to gain entry, and arrange the check for as soon as possible after this date.
Q. What legionnaire measures to take when returning after the lockdown, as the sealed system has been turned off by the tenants.
You can read more about how to check your property for legionella here.
Q. Electrical safety survey is due to be done. Will my liability insurance still be covered if it is not done due to Covid-19?
A. You should check with your insurance company; many are being very understanding of this unusual situation. If your tenant is willing to allow access, do try and still have the checks done if it safe to do so. If access not possible, make sure you build a paper trail showing that you have tried to gain access, and your tenant has refused (and why).
Q. My tenants are reluctant for tradesmen to conduct EPC & gas safety certificate renewals. What are the consequence for landlords?
A. Failing to ensure that you have all vital landlord legislation carried out can have serious ramifications. With regards to a gas safety check, if this is not carried out correctly, any remedial work acted upon and documentation issued to your tenant, you will be unable to issue a section 21, potentially face a hefty fine or even a criminal conviction should anything go wrong with the gas installations within your property. EPCs are less important to complete urgently, until you come to market your property. At this stage, a valid EPC must be provided to new tenants, or you will not be able to issue a section 21, should you need to.
Q. What particular responsibilities do managing agents for blocks of flats have at this time?
A. Managing agents are still responsible for anything that they are contracted for, however many are finding some of the physical checks difficult under current conditions. Speak to your agent and make sure you understand exactly what they are still able to oversee – ultimate responsibility will fall to you, the landlord, if legal requirements are not complied with, so be sure to know what is and isn’t being carried out.
Q.What should I do about about fixing fences?
A. You have a responsibility to ensure that your property is safe and secure, and often a fence will be a big part of this. If safe to do so, and you can obtain the materials, it would be ideal to fix the fence. Additionally, you should be able to adequately socially distance in a garden.
Q. What PPE would you recommend if visits to a rented property are required, and how should I to achieve social distancing (e.g. for repairs)?
A. We would suggest following government advice with regards to PPE. Currently there is no strict measures in place, however a face mask is a great idea if you are going to be working in close contact with other people. Following social distancing guidelines are a must, you can find clear information on these measures here.
Changes to the eviction process
Q. Can a tenant be evicted if they stop paying and break contract without notice?
A. Not at the moment, no. All court action for eviction is on hold until at least 25th June 2020.
Q. Is a Section 8 notice served prior to lockdown still valid to commence possession proceedings or does a new notice need to be served?
A. Effectively, a pause button has been pressed on any notices that were served prior to 26th March, that were currently progressing. These will recommence after the 25th June, when courts reopen. No new notices will need to be served.
Q. I have a possession order and was awaiting a date for a bailiff to attend. What is the current status regarding bailiffs?
A. Bailiffs are not working currently, and will not do so until courts reopen on 25th June.
Q. What is happening with new tenants, viewings and move ins?
A. Current government guidelines suggest that property moves should not be undertaken unless essential. With regards to viewings, you could consider utilising video technology to carry out a digital viewing, you can find information on how to do this safely here. If you don’t fancy taking on the task yourself, Howsy are now offering virtual viewings at empty properties, speak to us today on 0330 999 1234 to find out more
Q. During restrictions, if a tenant vacates a property at the end of an AST can another tenant move in straight away?
A. It is not advisable to move into a vacated property straight away. Recommendations suggest leaving a clear 72-hour period without any interaction in the property allows any risk to be minimised, which helps make the process safer for everyone.
Q. How can I market my properties in central London during COVID-19?
A. Here at Howsy we are working as normal, and are able to help you get your property live and marketed! You don’t pay a penny until a tenant moves in, so now is a great time to take advantage of plenty of people browsing the portals! Additionally, we are offering three months’ free management to new landlords during this period, so it’s a perfect time to get started on our simple management platform too.
Q. How do I manage inventories with disputes on cleaning/damages?
A. Inventories are tricky currently. If your tenant has vacated the property, it’s a good idea to leave the property empty for 72 hours (the ‘safe time’) before going in and carrying out an inventory review as normal – take lots of photos, and make comprehensive notes. You can then send an outgoing inventory report digitally, and raise any concerns via email, making sure to keep a paper trail. All deposit services are still working fully, so will be able to help with any disputes, as normal.
Q. Are video visits being advised?
A. Absolutely! Read more here. If you don’t fancy taking on the task yourself, Howsy are now offering virtual viewings at empty properties, speak to us today on 0330 999 1234 to find out more
Q. What is the situation for empty rental properties which the government will not allow people to move into?
A. The government are currently allowing moves to take place, if the move is deemed essential. We are following the changes closely, and recent news suggests that letting and sales agents will be among the first organisations to be allowed to get back to ‘business as usual’ – great news for landlords and tenants. Keep an eye on the blog for further information.
Q. Any suggestions about checking a property when tenants leave? Do we trust videos before refunding deposits?
A. Whilst it is great for your tenants to provide a video to you, it is still advisable to check your property yourself if you can. Do wait 72 hours after the tenants have vacated before visiting the property though.
Q. What advice would you give on preparing a void and reletting during the current situation?
A. You can market a property as usual, but possibly prepare yourself that the process may take a little longer than usual.
Q. We have tenants leaving on 31 May. If we observe social distancing, can we market the property during May?
A. You can market the property during May, but it would be unwise to consider any viewings – before or after your tenants have moved out. Once they have moved out you could consider creating a video walk through, which can be added to your online marketing.
Q. Can ASTs be signed digitally?
A. Absolutely. An AST can be signed using digital technology, and complies fully with the Electronic Communications Act 2000. The only exceptions to this are if the tenancy agreement is for longer that three-years. It is also important to remember that guarantor agreements are a legal deed, and signing must therefore be witnessed and cannot be safely signed electronically, in case of dispute.
Q. I have student tenants with tenancies due to start in July, with tenants possibly being unable to move in. What is your advice?
A. We hope there will soon be some new on what we can expect for students, after all, time is creeping ever closer for those looking to head to uni come September! Until we have definite facts, it is difficult to judge on a good course of action. If the universities go back as normal, you want to keep your properties ready for the students, but if not, you need to cover your cots. You could consider short term holiday lets as an option should worst-com-to-worst, but as the news changes quickly and details flood in, if you can hold out until the end of May, you might have some more definitive answers.
Q. I am looking to rent out a property which until now has been holiday lets only. Is now as good a time as any to begin an AST?
A. Now is a good time to get your property on the portals, there is nothing lost by getting it up and potential tenants viewing it! It’s believed that lots of landlords will be exiting the market, so if you are able to provide a property for tenants who may be looking to move, it could be a great time!
Q. My insurance states that tenants have to be in professional employment but some of them have lost their job. What to do?
A. Speak to your insurance company – most are being very understanding about the challenges that coronavirus is causing, and it is unlikely that this situation would cause your insurance to be invalid. However, all insurance companies are handling this situation differently, so be sure to check with yours to see what their policy states.
Q. Would agreeing to a temporary rent reduction invalidate our AST?
A. No, you are only agreeing to a temporary adjustment, so the figure stated on the ST is still the rental rate. However, you should be sure to confirm the amount that you are adjusting to in writing, with the dates that the change is implemented from and to, and when your tenant will be expected to go back to paying the full amount. If this needs reviewing, issue another document with revised dates, but keep the original!
Q. My tenants’ 12-month agreement ends in July. Can I roll this on to a monthly basis for them?
A. Yes, you can. If you do nothing, your tenant’s current contract will naturally become a periodic agreement, which rolls onto a monthly contract. The details all stay the same (rental rate etc), the only change is that your tenant will now only have to give one month’s notice to leave (as each month is effectively the start of a new month long contractual period), whereas you still have to give two (when you are allowed to give notice again). If you want to make any changes to the agreement, you may be better to bring the current agreement to a close and reissue a new fixed term contract. This allows you to make changes to clauses within the contract, should you wish to. This will need signing, and you will need to issue all the documentation that you would need to at the start of any tenancy in order for it to be valid. This is a lengthier process though, and if you don’t need to make any changes, an unnecessary complication.
Q. If a tenant cannot pay the rent, can he just hand in the keys and walk away? Is there anything the landlord can do?
A. If a tenant hands in the keys and walks away, legally they are still responsible for the property unless a surrender is agreed with the landlord. You can still pursue the tenant, or their guarantor, for rent payments, however do consider that no courts are currently working at this time. If you believe that the tenant is unlikely to return or make any further rent payments, you could consider agreeing to an early surrender, which is a voluntary ending of the lease. This would forfeit any right the tenant has to the property and bring the lease to an early end, allowing you to re-market your property.
Q. How do I manage, viewings and repairs at HMOs during the lockdown?
A. Make sure you speak to all tenants, to make sure none of them are self-isolating, or displaying any symptoms before you visit the property. You should only carry out essential maintenance during this time, so anything other than that (viewings, inspections etc) should wait until it is safe to do so. If you have to attend, ask all tenants to respect social distancing rules, and make sure you stick to them yourself too. You can find up to date information here.
Q. A tenant in my HMO says he doesn’t want me coming into the house in order to check a departing tenants room state. Can I?
A. Coronavirus aside, your tenant is within their rights to deny you access to the areas of the property which they have exclusive access to (their bedroom and any other rooms that they pay for private use of), although you are allowed access to the shared areas. You should always give notice to do this, although unlike non-HMOs, you do not legally have to provide 24-hours’ notice (it is best practice to do so though). Legally, they cannot prevent you from accessing the property and the empty bedroom, however given the current situation, you should check why the tenant doesn’t want you to attend. Could they be self-isolating? Or displaying symptoms? If so, it may not be safe for you to enter the property anyway.
Q. Have empty en-suite room in HMO with individual contracts. Can a construction worker who is building a hospital move in on May 17th?
A. This is a tricky one, as moving any new tenants in will ultimately put your existing tenants at risk, as you cannot expect your new tenant to self-isolate in their private room and not make use of the shared facilities, such as the kitchen and living space. It may be wise to speak to your existing tenants, and get their thoughts on the matter. Whilst it is great to be able to offer support to key workers at this time, if this risks your existing tenants wanting to leave and potentially defaulting on rent, you should weigh up the risks versus benefits of the decision. On the other hand, they may be quite happy to take extra precautions in the property, in which case you would be able to proceed.
Q. My tenant of five years has sadly passed away. Is there anything different that I need to do at the end of the tenancy?
A. Legally, your tenant’s estate remains responsible for the tenancy for the duration of the lease. Generally, it is best to make contact with your tenant’s executor and agree an early surrender of the tenancy, which would allow you to re-market your property, and leave your tenant’s family free of the responsibility of the lease. It is also worth considering whether or not the tenant was a sole occupier in the property. If the tenant lived with a spouse or civil partner, as long as the property was the partner’s principle home, they have the option to ‘inherit’ the lease, and become a successor to the tenancy. This is not mandatory, but is an option that is open if they choose to take it.
Q. Do you charge full management fees if renters don’t pay rent?
A. Here at Howsy, we understand that this is a very troubling time. We have extended an offer of three months free management during this time to try and alleviate some of the pressure for our landlords, and hope this may go some way to helping smooth the way. For more information, contact the Howsy team today on 0330 999 1234.
Q. Who is responsible for licence imposed by the local authorities?
A. The landlord of the property is responsible for ensuring the property licence is in place. Whilst many local authorities are hectic at the moment, licensing is still a hot topic, and we urge any landlord who requires a licence to make sure that documentation is in on time to avoid a hefty fine.
Q. Do you know how soon you will bring back your Howsy Protect service? Is it likely to be soon after lockdown has ended?
A. As soon as possible! We’re keeping a close eye on the government advice, and as soon as it is safe to bring back this much-loved service, without putting tenants or our on-the-ground teams at any risk, or contravening any government guidelines, Howsy Protect will be back!
Q. Should the same process be applied to lodgers as tenants, or is there a distinct technical difference between the two?
A. There is one very big difference. Eviction proceedings for lodgers is not covered by the eviction changes, so if you have a lodger living in your property, you are still legally allowed to ask they to leave. You do still have to give them reasonable notice though.
Q. Are holiday lets a better option moving forwards if staycations take off?
A. This very much depends on where you are based, the demand and your time! If there is a booming holiday market in your area, holiday lets can be a great idea, but can also be quite a lot of work – so do some research into how busy you think your area may be and how available you are to keep up with weekly check ins and check outs!
Q. Any suggestions on how to deal with tenants inviting visitors to communal gardens against social distancing regulations?
A. Your tenants are entitled to quiet enjoyment of the property, which means, unless their behaviour is anti-social (in which case, you can contact the police) there is not a lot you can do, no matter how frustrating it may be.
Q. What is the best approach for cover for rented properties: e.g. boiler, electric, is it through separate or combined policies?
A. We believe that the fewer policies you have to juggle, the easier life is! Nobody wants to rifle through reams of paper when you have an emergency on their hands. Here at Howsy, we have a Home Emergency, Boiler and Appliance cover, available for only £35 a month with our standard package (which is currently free for three months for new landlords!) – you can read more here.
Q. If a property is left empty by choice now, why are councils still charging council tax?
A. There is no guarantee that they are. If your property is currently unfurnished and empty (with no tenant in place, rather than a tenant who has temporarily moved out to manage lockdown elsewhere) it is exempt from council tax for six months. After six months, an up to 50% discount applies. A furnished, empty property receives an up to 50% discount for six months. The discount rate is variable by council, so check with your local authority on the rates in your area.
Q. What can you do when your tenants are already in arrears, and you feel your estate agents have been negligent?
A. Currently, it may be tricky to pursue outstanding rent, however once courts and bailiffs are operating fully again, you can pursue unpaid rent via the normal channels. You should always be confident that your agent is working in your best interest. Don’t feel compelled to stay with an agent who you do not believe are working as hard as they can for you. Changing agents mid-way through a contract is viable, if you believe that the contractual agreements have not been met. You can read more about how to do this here.
Here at Howsy, we understand that the current crisis is making landlord life tricky and hard to manage. We’re offering a special offer for three month’s free management for new landlords courtesy of the team at Howsy during this difficult time.
For more information on how we can help, don’t hesitate to give us a call on 0330 999 1234 or arrange a callback for more information.
We’re all in this together, and we will get through it! Stay safe, and we’re here to help wherever we can.