COVID-19 Coronavirus - Government support for tenants and landlords
19th March 2020
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19th March 2020
Even in just the last week, the impact of the COVID-19 coronavirus pandemic has been devastating.
Figures published yesterday indicate that 104 people in the UK have died from the virus, with 2,626 reported as infected. This of course does not include those who have symptoms but have not been tested. The numbers are significantly higher in other parts of the globe, with thousands having died in China, Italy and Iran. Many regions are in some state of ‘lock-down’, whilst governments try to tackle the spread of the virus.
The full personal and economic impact of coronavirus is yet to unfold. In the UK, flights have been grounded; international travel is largely restricted; ‘social distancing’ is encouraged, particularly for the over-70s and the vulnerable, with government advice to avoid bars, theatres and restaurants; and ‘self-isolation’ for those with the virus, showing symptoms or having been in contact with someone with or suspected of having the virus. Many workers have been forced home, in many cases without or at reduced pay, with universal concerns of the financial impact the virus will have for all, with rents, mortgages and bills to pay.
Support for tenants and landlords in rented sector
With the government announcing on Tuesday that three-month mortgage payment holidays would be afforded to home owners facing financial difficulty as a result of coronavirus, further measures were announced yesterday to support those in the rented sector.
The Ministry of Housing, Communities and Local Government (“the MHCLG”) has announced a radical package of measures to protect renters and landlords affected by coronavirus. As a result, the MHCLG has committed that no renter in either social or private accommodation will be forced out of their home during this difficult time.
The measures announced yesterday include :-
Support for tenants
Emergency legislation to suspend new evictions from social or private rented accommodation while this national emergency is taking place. The proposal is that landlords will not be able to start proceedings to evict tenants for at least a three-month period. The MHCLG say that, as a result of these measures, no renters in private or social accommodation need to be concerned about the threat of eviction.
In addition, the government will also be issuing guidance which asks landlords to show compassion and to allow tenants who are affected to remain in their homes wherever possible. At the end of the three-month period, the government expects landlords and tenants to work together to establish affordable repayment plans, taking into account tenants’ individual circumstances.
To support this announcement, the government plans to widen the ‘pre-action protocol’ to be complied with before possession proceedings are commenced, which is currently limited to possession claims in the social housing sector. The pre-action protocol encourages more contact between the landlord and tenant, with a view to resolving disputes and avoiding possession claims. It is proposed that the pre-action protocol will extend to the private rented sector and its remit strengthened. The MCHLG say that this will support the necessary engagement between landlords and tenants to resolve disputes, and landlords will have to reach out to tenants to understand the financial position they are in.
Support for landlords
Recognising the additional pressures coronavirus may put on landlords in the private rented sector, many of whom are dependent on the rent paid by their tenants to meet their own financial outgoings. It was also announced yesterday that the three-month mortgage payment holiday would be extended to landlords whose tenants are experiencing financial difficulties due to coronavirus.
The MHCLG say that this will alleviate the pressure on landlords in the private rented sector, who will be concerned about meeting mortgage payments themselves, and will mean no unnecessary pressure is put on their tenants as a result. They say this is an important step to ensure parity of support with buy to let mortgages, following the support made available for private mortgage holders.
Impact of the proposals
We are, in many respects, in the early days of the coronavirus crisis. As the government’s strategy to tackle the crisis develops on an almost daily basis, there remains scope for the proposals to change and, until the new legislation is passed, we won’t know exactly what the new rules look like.
For example, will the new proposals only apply to tenants suffering financial hardship as a result of coronavirus, or will they apply to all possession claims including those on no-fault grounds under Section 21 of the Housing Act 1988 or as a result of serious anti-social behaviour, unconnected to the global pandemic?
It is also not clear at this stage whether the suspension will be limited to all, or only new, possession claims. Either way, landlords with active possession claims should be prepared for months of uncertainty and delays. This of course presents difficulties for landlords who need their properties back for reasons unconnected to coronavirus or who have commenced claims before the outbreak of the pandemic.
Whilst we await full details of the new rules, the Housing Secretary, Robert Jenrick MP, made clear the government’s aims yesterday, saying :-
“These are extraordinary times and renters and landlords alike are of course worried about paying their rent and mortgage…These changes will protect all renters and private landlords ensuring everyone gets the support they need at this very difficult time”.
For more information, please contact Kevin Lever at Kevin.Lever@kdllaw.com or on 01435 897297.
This legal update isprovided free of charge for information purposes only; it does not constitute legal advice and should not be relied on as such. No responsibility for the accuracy and/or correctness of the information and commentary set out in the article, or for any consequences of relying on it, is assumed or accepted by any member of KDL Law or by KDL Law as a whole.
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