Well, here we all are in our homes, unable to go out (much) for what is likely to be a considerable period of time.
Let’s take a look at all this from a landlord and tenant law perspective (as at 8.30 am Friday morning).
No more evictions for at least three months
This is a somewhat confusing story now clarified.
Initially, we were told that the Coronavirus Act (now in force) would provide for a three-month moratorium on evictions which could be extended if necessary.
When the act was published it became apparent that this was actually going to be an extension of the notice period in possession notices to three months in all cases (schedule 29). Which was not really what people were expecting.
Questions were raised about existing cases, notices that were served before the act came into force and evictions of licensees where those notices do not apply. There was a general outcry from tenant organisations saying that the government had let them down.
There were also questions raised about the validity of the new notices with the extended notice periods. These are prescribed forms. Surely a statutory instrument is necessary to effect an amendment?
In response to all this, some courts started halting possession cases and evictions, others simply adjourned them. In some places evictions were still going ahead. There was general confusion and a lack of consistency across the country.
The situation was then resolved by the Master of the Rolls with the Lord Chancellors agreement suspending all ongoing housing possession claims. Which means that no-one can be evicted at all for the next three months, and maybe longer. The press release is here.
Why this is the right thing to do
Many landlords are no doubt aggrieved about all this and will be complaining that their property rights are being breached. Some are no doubt muttering imprecations against a nanny state government mollycoddling ‘scum tenants’ by allowing them to stay in their properties rent-free at their expense.
The thing is though that we are in the midst of a national, indeed international, emergency. At times like this, individual rights have to go to the wall for the common good.
The single most important thing right now is saving lives and keeping the National Health Service from being overwhelmed. Evictions have been stopped, not so much to protect tenants but to prevent the spread of the infection.
The only way we can stop the spread of infection is to all stay in our homes and avoid contact with anyone outside our own household. So evictions have to stop.
There will no doubt be huge problems at the end of this time. But we can’t think of that at the moment. We have to concentrate on preventing the infection from spreading so the National Health Service is not overwhelmed.
Stay in your home!
Boris Johnson’s address to the nation on Monday telling us all to stay in our homes with just a few exceptions (getting food, exercise, going to work if absolutely essential and unavoidable, etc) was apparently one of the most-watched broadcasts in broadcasting history.
This request has now been enshrined in statute with the passing on 26 March of the Health Protection (Coronavirus, Restrictions) (England) Regulations 2020 which prohibits unnecessary travel outside of the home save in specific situations set out in the regulations.
These include ‘to move house where reasonably necessary’ but it looks as if the entire house moving industry (estate agents, removal services, conveyancers) is effectively closed down for the duration. It is fortunate therefore that steps are being put in place to put everyone in funds.
Paying the nation
Rishi Sunak the Chancellor has become the paymaster for the Nation (and probably the most popular Chancellor in history) as he has put in place schemes to pay 80% of wages for those not working in coronavirus crisis, of up to £2,500 per month, and to pay similar sums to the self-employed for those earning £50,000 per year.
Inevitably it is going to take time for these unprecedented schemes to actually pay out – the payments to the self-employed is not expected to pay out until June. Until then people will have to get by on savings and emergency loans and grants.
These schemes, which have had to be developed at enormous speed, will cover most of those in need but there will be some who fall through the cracks. They are being told to apply anyway and hopefully, administrators will take a broad view rather than a nitpicking restrictive one of the wording of the (presumably as yet unpublished) scheme rules.
Rents are still payable
Contrary to what some have assumed from press reports, tenants are still liable for rent. Landlords are being asked to allow tenants to delay the payment of rent during the crisis, they are not being told to forgo it altogether.
To facilitate landlords allowing tenants a ‘rent holiday’ if they are in financial difficulties, mortgage companies will agree a ‘mortgage payment holiday’ for buy to let mortgages. However, this will also just push payment back. Landlords will be expected to pay interest on this. So neither will be getting a free ride.
The government guidance says
Tenants are still liable for their rent and should pay this as usual. If they face financial hardship and struggle to pay this, support is available. In the first instance they should speak to their landlord if they think they will have difficulty meeting a rental payment, and in this unique context we would encourage tenants and landlords to work together to put in place a rent payment scheme.
There is no doubt though that massive financial loss will occur during this period and very hard times are ahead for us all. Already activists are launching campaigns to prevent rent rises after the crisis is over.
Rent Guarantee Insurance firm lets landlords down
Needless to say, some insurers are now saying that they are unable to pay out on rent guarantee insurance policies claiming that the government action in stopping evictions makes them unenforceable. Direct line saying:
During this three-month period, we cannot pay any new rent guarantee claims as there is no legal mechanism to allow us to take a claim forward.
The report quoted is about Direct Line but others may take a similar view.
Landlords will no doubt have a few things to say about that, rent guarantee insurance not being exactly cheap. After all, if they are not going to pay out when it is most needed, what is the point in having it?
Although Direct Line went on to say
If the landlord’s rent guarantee claim has already been accepted and they are in receipt of rent guarantee payments, these will continue to be paid during the pandemic.
Which does not seem particularly fair to me. But when were insurance companies ever fair?
Note that this may not be the case with all insurers, some may be paying out. If you have a rent guarantee insurance policy, write a comment below and let us know what approach YOUR insurer is taking.
Many insurers are also no longer selling any new rent guarantee policies.
What about repair work?
The situation is that landlords remain liable but should only carry out really essential work. Here is the government guidance:
Landlords remain legally obligated to ensure properties meet the required standard – urgent, essential health and safety repairs should be made. An agreement for non-urgent repairs to be done later should be made between tenants and landlords. Local authorities are also encouraged to take a pragmatic, risk-based approach to enforcement.
Again bear in mind the primary concern at this time which is to reduce infection by social distancing.
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- Thousands of agents sent home and branches shut across Britain as industry fights for survival
- Government Grenfell Taskforce raise concerns as PM appoints Independent Adviser
- ‘Coronavirus could wipe out the UK’s smaller Guaranteed Rent operators’
- Estate agencies given protection from commercial landlord evictions
- Government aims to house all rough sleepers by the weekend
Newsround will be back next week.