COVID-19 brings "rent free" confusion
c.jermyn • April 15, 2020
The Government need to urgently clarify guidance on payment of rent during the COVID-19 pandemic
The Government has moved quickly to put in place new legislation (Coronavirus Act 2020) and guidance protecting renters from being evicted from their homes during the coronavirus crisis.
The problem is that the legislation and guidance has been widely misconstrued by renters in the private rental sector, with tenants considering it an automatic rent free period, which is not the case.
Landlords can apply for a mortgage holiday on their buy to let mortgage, if, they are struggling to meet their mortgage payments because their tenants are unable to pay the full amount of rent due or any rent at all. The mortgage holiday is not guaranteed and the landlord will still have to repay the sums due spread out over the term of the mortgage.
It must be remembered that many landlords do not have mortgages and rely on their rental income as their only source of income.
It must also be remembered that not all tenants are financially impacted by the coronavirus pandemic.
We have spoken to many landlords and agents with tenants financially impacted by coronavirus. The majority are communicating and working with their tenants to agree rent payment holidays, surrenders of the tenancy or rent variation agreements, for example reducing the rent by 20% for employees that have been furloughed by their employer.
What is key is that they are communicating. However, tenants must be aware that unless a landlord agrees to write off the rent due during the coronavirus period, then the rent remains payable.
The last thing we would all want to see is huge volumes of litigation against misinformed tenants.
The message needs to be clear: if you can pay your rent then you should pay your rent. You should not assume that your landlord would benefit from a mortgage repayment holiday or that they can survive financially without your rent. If you are unable to pay your rent then communication is key. Talk to your landlord or agent and discuss the options.
We have been busy working on template letters and agreements to assist landlords. If you need any help then please contact the team and we will be happy to assist you.
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