Government guidance on Coronavirus Act 2020

Guidance for landlords from the government on Coronavirus Act 2020. ARLA Propertymark supports eviction ban. 3 month extension for filing accounts is good news for limited company landlords. Scotland pushes back energy efficiency regulation deadline.;
Parliament

The government has released non-statutory guidance notes, for landlords and tenants, relating to the Coronavirus pandemic and changes in law that have arisen as a result.

The paper outlines information on possession notices, court action and property access, relating to health and safety. It also explains the implications of the Coronavirus Act 2020, which came into force in the UK on 25th March 2020.

The guidance relates to both social and private sectors.

3-month notice on possession proceedings

A key outcome of the Act is that, from 26th March 2020, landlords must give tenant’s three-month’s notice of possession. Without this the majority of landlords will not be able to start possession proceedings.

Notice periods can be longer, if the landlord chooses to do so.

Any possession claims in progress, or about to be pursued in court will be subject to a formal delay of 90 days.

After three-months, landlords must pursue and secure a court possession order, in order for the tenant(s) to be required to leave.

Further details relating to Section 21 and Section 8 evictions are available in the government’s “Technical guidance on eviction notices” found via this page on Gov.uk website.

Advice to tenants on rent

The guidance notes make clear to tenants that they should not stop paying rent and that it is anticipated that the Covid-19 pandemic should not affect most tenants from being able to do so.

However, tenants are directed to speak with their landlord, at the earliest opportunity, if they face problems paying.

Where can landlords direct tenants for financial support?

If a tenant has difficulties paying rent, landlords can share with them the following avenues for financial support, issued within the guidance notes:

Local authorities: Tenants are directed to their local authority to seek financial support through the £500m financial hardship fund that the government has made available.

Universal Credit: Tenants facing financial difficulties may become eligible for Universal Credit, details of which can be found here: https://www.gov.uk/how-to-claim-universal-credit

Support for employees: The guidance notes also reference the information issued by the government for employers and employees which may help tenant dialogue with their employer about their circumstance.

Making mortgage payments

Landlords with mortgage payments to make have been encompassed by some lenders offering a 3-month payment holiday.

It is vital that landlords speak directly to their lender to understand what help they may be eligible for.

A list of lender information and contact telephone numbers can be found on the Commercial Trust website.

What are a landlord’s obligations regarding rent?

It is made clear that landlords are not required to stop charging rent. If a mortgage payment holiday is available to them, the expectation is that this should be passed to the tenant.

Landlords are encouraged to take a pragmatic approach, in working with tenants struggling to pay rent. It may be possible to come to an arrangement, or rent repayment plan, that is mutually acceptable.

Certainly having a clear picture of both party’s position, including any source of financial help available to each side will help in planning a path forward.

Organisations that may be able to help with dialogue around tenants being unable to pay rent include Shelter, Citizens Advice and The Money Advice Service.

Licence to occupy

The Coronavirus Act 2020 does not apply to licences to occupy, but landlords are being asked to operate in the same way as those with tenancies.

Access to property for health and safety obligations

Landlords are required to uphold measures related to the health and safety of their property for the sake of their tenants.

However, the government acknowledges that routine inspections or other measures that require access to a rental property, may face challenges at present.

If measures imposed to prevent the spread of Covid-19 mean that a landlord cannot uphold non-emergency health and safety measures, they should not expect to be unfairly penalised.

Gas and electrical safety: Landlords must provide tenants with the necessary certification at the start of a tenancy and should carry out inspections and tests in line with 1st July regulations.

There are provisions within the regulations about barriers which prevent landlords adhering to the regulations, an extract of which is available within the guidance document, on page 19.

There is also guidance on the Gas Safe Register website for engineers and landlords.

Important: Where landlords are unable to conduct routine health and safety obligation due to Covid-19, they should document their attempts to comply with regulations, including documenting contact with tenants and attempts to secure a contractor.

Where there is a serious hazard at a rental property, landlords are required to act. Landlords who do not will be subject to local authority enforcement measures.

Tenants are directed, within the guidance paper, to allow access to their property when serious hazards have to be fixed. This should be done in such a way that also adheres to Coronavirus advice.

What is considered to be urgent work?

  • Repairs to the fabric of the building – e.g. leaking roof
  • Broken boilers, which stops either hot water or heating
  • Broken plumbing, where washing or toilet facilities stop working
  • Broken white goods, where food cannot be safely stored or clothes cannot be washed
  • Security is compromised, e.g. an external door or window is broken
  • Equipment for the differently abled needs to be installed or repaired

More information on repairs is available on the Gov.uk website.

Houses of Multiple Occupation

Landlords are not under any obligation to provide alternative accommodation, where one tenant in a house-share is diagnosed with Coronavirus.

The government has provided information for HMO tenants on cleaning to protect against the risk of infection.

Also issued is guidance on sharing a home with someone who may have Coronavirus.

The guidance paper is available, in full, here.

Eviction noticeARLA Propertymark supports eviction ban

Initial landlord reaction, to ARLA Propertymark’s support of the government’s eviction ban, has been one of disappointment and frustration.

Initial landlord reaction, to ARLA Propertymark’s support of the government’s eviction ban, has been one of disappointment and frustration.

Both existing and imminent possession cases in England and Wales have been halted, in light of the impact of Coronavirus on tenants being able to pay rent.

The initial suspension of possession actions has been set at a 90-day duration, but it is open to extension.

Chief executive of ARLA Propertymark, the trade body for the letting industry, commented that:

“However difficult it may be, this is the right decision in light of the current circumstances. Yet evictions will not be required if we can keep the rent flowing.

“The latest advice is that people stay put, and as long as the Government helps tenants pay their rent, there will not be a large build-up of debt from rent arrears, meaning there will be no logical reason why a landlord would start eviction proceedings.”

Landlord reaction

Landlords have pointed out, though, that this action has affected cases where problems with tenants pre-dated the Coronavirus outbreak.

Furthermore, it makes it impossible to pursue an eviction for reasons unrelated to Coronavirus.

In instances where tenants were already several months in arrears with their rent, landlords have expressed concern that tenants have been given free rein to remain in their property rent-free, for a further 3-months.

Similar concerns exist where tenants are causing damage to property.

The three month extension has bought some unscrupulous tenants the chance to get away with their actions for longer, which can only cause distress and potential financial burden for affected landlords.

Anti-social behaviour, illegal or dangerous behaviour and damage to a property are all justifiable reasons to evict guilty tenants.

There are concerns that the Coronavirus Act has cut blindly cut across the rights of good landlords, which may be seen as a pattern of behaviour, where landlords are deemed the only party possible to have behaved improperly.

Paperwork being completed3-month extension for filing accounts

Landlords operating through a limited company or special purpose vehicle (SPV), may welcome the news that a three month extension for submitting their accounts has been made available for some.

The move has been introduced through a join initiative between Companies House and the Government as one of the steps to support businesses through the Coronavirus.

An extension must be applied for, and is only applicable where a filing deadline has not already passed.

The extension may not apply where a company has already secured an extension, or has had their filing deadline shortened.

The objective of this arrangement is to allow businesses to focus on work to get themselves through any impact of the Coronavirus on their operations. It is also designed to help companies avoid penalties whilst their focus is on business resilience matters.

Be aware that, if a filing deadline has already passed, the penalty that is automatically applied will stand. Whilst an appeal can be lodged, there is no guarantee of success.

Secretary of State for Business, Alok Sharma, described the government’s reasons for supporting the move:

“We are determined to help businesses in any way we can so that they can focus all their efforts on dealing with the impact of Coronavirus, and this new offer of a three month extension for filing accounts is part of that.”

Companies House chief executive, Louise Smyth echoed this sentiment in her own statement on the matter:

“We recognise that these are uncertain times for businesses and that’s why we’re doing all we can to help. By easing the burden, we can help businesses through this period and enable them to thrive in the future.”

How to apply for an extension

Information about applying for an immediate and automatic extension to an accounts filing deadline can be found on the Gov.uk website here.

Where to submit an application

To submit an actual application for an extension to an accounts filing deadline, follow the steps on this page of the Gov.uk website. Have to hand your company number, email address, an explanation on why you are applying and any documents you wish to submit to support your application (optional).

Scottish energy regulations delayed

Energy efficiency regulations in Scotland, planned to become law in 1st April 2020, have been indefinitely postponed, in light of the Covid-19 crisis.

Earlier last year the Scottish Government announced the introduction of the Energy Efficiency (Domestic Private Rented Property) (Scotland) Regulations 2020”. The regulation imposes a minimum energy efficiency rating of “E” on property in the private rental sector.

Earlier last year the Scottish Government announced the introduction of the Energy Efficiency (Domestic Private Rented Property) (Scotland) Regulations 2020”. The regulation imposes a minimum energy efficiency rating of “E” on property in the private rental sector.

Had the regulation come into force, any property being let under a new tenancy, from 1st October 2020, would have to meet these new standards. Rental properties that did not change tenancies would have had until 31st March 2022.

The penalties associated with failing to meet the, now delayed, regulations could see landlords removed from the Scottish Landlord Register as well as encountering a fine of up to £5,000.

This change contributes to Scotland’s Energy Efficient programme that aims to make homes and buildings warmer, greener and more efficient.

The Scottish Government made the decision to postpone this regulation due to the safety of tenants and workers and the time constraints for local authorities and landlords.

Kevin Stewart MSP, Minister for Local Government, Housing and Planning, announced the delay declaring that:

“The regulations place new duties and responsibilities on local authorities. Between 1 April and 1 October 2020, local authorities would be required to develop a system for registering exemptions and to be ready to support landlords and enforce compliance. If introduced at this time, these duties would place a burden on them which would be detrimental to their necessary focus on frontline emergency responses to the COVID-19 crisis, and their delivery of vital services and support to vulnerable people.

“In addition, the regulations may require many private housing landlords to undertake energy efficiency works to their properties over the coming months, in anticipation of tenancy changes from 1 October 2020. This risks encouraging landlords to try and get work done in tenants’ homes when medical and government advice continues to mandate social distancing measures. Contractors and installers will also not be able to undertake non-emergency work within people’s homes for the foreseeable future.

Stewart finished by saying:

“For these reasons, I firmly believe it would be unwise to bring the regulations into force from 1 April as planned. I can assure you that I will push forward with the vital work of improving energy efficiency in private rented housing as soon as the current COVID-19 situation comes to an end.”

This information should not be interpreted as financial advice. Mortgage and loan rates are subject to change.