In August 2020, the UK government decided to help tenants further by increasing the notice period from 3 months to 6 months from August 2020 to March 2021. This prevents a landlord using Section 21 to gain possession of their property. The real outcome is that tenants know that they can stay in the property for 6 months whilst being in rent arrears, which as a landlord makes me feel uneasy.
There are circumstances when the pre-covid laws applies, such as
anti-social behaviour (now 4 weeks’ notice)
domestic abuse (now 2 to 4 weeks’ notice)
false statement (now 2 to 4 weeks’ notice)
over 6 months’ accumulated rent arrears (now 4 weeks’ notice)
breach of immigration rules ‘Right to Rent’ (now 3 months’ notice)
But a point to note is that during some lockdowns the courts close so the evictions that can be carried out are unable to be heard.
Rent arrears due to Covid-19 could cost landlords £20,800 over the next two years. www.thisismoney.co.uk
But in reality ...
But in reality with the government not investing in the court system it could take 12-14 months to evict a tenant after the 6 month notice has expired. This is based on the volume of cases to be seen by the court verses the amount of cases that can physically be seen per day.
The government has helped the rent arrear issue by extending furlough until April 2021, but the tenants still have to sent the rental payments to the landlord, and as I have personally found sometimes they choose not to (this is the same issue with DSS payments but that is for another article). I recently had a tenant say he could not pay the rent as he has no money or work, but what the agent found out was that he was on furlough and could have paid the rent if he opted to. As a HMO landlord who pays all the bills plus the high speed WiFi for the tenants I have no power to have the furlough pay sent to me to cover their rent and bills. But I have to by law continue to provide water, gas, electric, WiFi, heating and the council tax - does this seem fair?
As a human with a heart I have open and consistent communication with my tenants so we can work through any payment issues, but I am also a business and at some point evictions maybe the only solution - there are no government support to cover my bills that is free. I have got rent insurance for my HMO rooms and single lets which is £22o per year per room. I have taken out the insurance as it will be invaluable if I need make a claim but this was a cost I did not have to factor into my budget 12 months ago. Plus there are limited insurers left in the market place so I fear that the cost per room will rocket and there are no real alternatives.
Approx 42% of landlords with rent arrears stated that they would most likely suffer two months rent lost or more and approx 18% said losses could amount to less than one month rent . www.statista.com
So what can you do?
So what can you do? Well as a landlord of 25 HMO rooms and 3 single lets I have chosen to take out rental insurance. Like most insurances you hope that you do not need to use it but if the eventuality happened and I needed it, especially if all tenants stopped paying at once, I will be very grateful for it. There are criteria you have to meet so please check you comply such as where the deposit is held, and how the tenant was referenced.
The agent and myself are in regular contact with our tenants so we can understand the tenants situation and if issues arise we can work with them rather than let the arrears build up. This approach only works if the tenant, agent and landlord have a open and strong relationship.
If the worse case happens then again make sure you have your paper work in order as when you issue a Section 8/21 you must have completed certain steps for the eviction to be validated. But for advise please contact your membership advise team sich as NLA or ARLA.
The main take away point is to be a real human with feelings for as long as you can, but to ensure you have the business procedures in place incase you have to go to court.
