What does the coronavirus eviction ban mean for renters and landlords?

What is the new legislation?

The news came after homeowners were promised mortgage “holidays”, prompting the UK’s worried 20 million private renters to urge for similar protection if they were to become sick or lose their jobs.

As such, new legislation has been brought forward to protect renters who are affected by the virus and fall behind on rent payments. New evictions from social or private rented accommodation have been suspended while the national emergency is taking place, and no new possession proceedings through application to the court are to start during this timeframe.

What does this mean for renters?

Put simply, you won’t be forced out of your home. You can’t be evicted during this time, although you will be expected to work out an affordable repayment plan with your landlord after this period, but this should take into account your individual circumstances. Therefore, for example if you have been furloughed and are receiving 80% of your wage from the government, and are able to still pay your rent without too much hardship, this will likely be better for you in the long run.

In fact, the National Residential Landlords Association (NRLA) has urged caution, emphasising that the legislation isn’t “a green light” to stop paying their rent.

What does the eviction ban mean for landlords?

The government has recognised the knock-on effect this could cause landlords, extending the announced three-month mortgage holiday to buy-to-let mortgages too. This should alleviate any financial pressure who may have worries about meeting mortgage payments themselves.

The government is emphasising that landlords need to “show compassion” though.

So how should I handle the situation if my tenant tells me they can’t pay?

First of all, pick up the phone. It can be tempting to revert to email, but things can be misinterpreted, and it’s less human than a phone call. By phoning them you can resolve the situation quicker and get a better sense of their situation and why they may need to pause payments.

In order to avoid being left with vacant properties, it’s important to keep tenants where they are as far as possible, even if that means a rent “holiday” or reduction. Especially so if they’ve been good, reliable tenants.

What you should clarify with your tenant is that these payments will eventually need to be repaid through a payment plan, as this may affect their decision on whether to opt for a rent “holiday”. You should also discuss whether the rent arrears will gather any interest.

It’s a good idea to have a letter between yourself and your tenant, confirming in writing what’s been agreed, how much they will pay and when.  Should I offer my tenants a rent reduction even if they haven’t asked for one?

It certainly makes sense to be proactive in getting in touch with your tenants and finding out what their circumstances are and whether they’ll be able to meet payments. Whether you choose to offer a rent reduction to those who haven’t yet asked is up to you and whether or not you can afford to do this.

Here at Balgores we’re here to help, and we’re offering free advice for those affected. Our staff are working from home; please call or email us with any enquiries or submit a form on the website and a member of the team will be in touch!