The coronavirus pandemic has led to wide-ranging changes across the country and the property industry is facing it’s own particular challenges.
The message in Scotland is still to “Stay At Home’ and many landlords are no doubt struggling with the impact this is having. Thousands of businesses will be working with limited capacity and limited income, causing problems with their cash flow, which will in turn impact on the ability to pay rent at the same rate. Likewise, with 6.3 million people temporarily laid off by 800,000 companies and nearly a quarter of British employees furloughed in the last fortnight, according to HMRC, domestic rent will be a struggle for many.
Landlords of residential properties need to manage their properties at a time of high uncertainty and changing legislation, however the Government guidance states that no landlord should evict a tenant because they have suffered financial hardship due to Covid-19, and they should be flexible with tenants facing financial hardship and signpost them to the sources of financial support available.
The government has outlined a series of new rules for landlords as part of its response to coronavirus and has provided advice on some of the key questions you may have:
- Residential landlords need to be flexible with tenants facing financial hardship (tenants who miss rent payments due to the impact of the coronavirus pandemic are to be protected from eviction for at least three months), and signpost them to the sources of financial support available. These include the introduction of mortgage payment holidays and changes to the repossession process.
- What if the tenant cannot afford to pay the rent – It is unlikely that the lease agreement contains a 'force majeure' clause which could allow either party to say that the obligations in the lease are suspended because of Covid-19. However it is worth reviewing your arrangement to see what your tenant can afford and come to a reasonable agreement for both parties. If your tenant faces financial hardship, you can apply for a three-month payment holiday on your mortgage and pass this temporary relief on to them.
- Landlords are now not able to commence possessions proceedings unless they give their tenants three months’ notice. If you’ve already issued your tenant with a possession notice, you won’t be able to take action through the courts to enforce it for 90 days from 27 March.
- The government advises that landlords and tenants take a common-sense-led approach to any issues that emerge with a property during the coronavirus outbreak. Landlord responsibilities haven’t changed, and where reasonable, safe and in line with government guidance, tenants should allow landlords and contractors into the property to fix any serious problems such as leaky roofs, broken windows, plumbing issues or problems with white goods.
- Landlords are required to arrange an annual gas safety check on appliances, and from 1stJuly will need to arrange electrical safety checks every five years. If you’re unable to access the property due to the current restrictions or can’t arrange a contractor to undertake the inspection, you should document your attempts to do so, as well as any correspondence with your tenants.
- As with property sales, you cannot currently conduct viewings – properties can only be accessed for ‘serious and urgent’ issues, and both buyers and renters should delay their moves wherever possible.
- If you’re letting out a House in Multiple Occupation (HMO) and one of the tenants displays symptoms, landlords and other tenants cannot ask them to leave the property. Landlords are not required to provide alternative accommodation for tenants if a flatmate or family member contracts the virus.
To support landlords, the PRS Landlord (non-business) Covid-19 is now available to assist landlords experiencing interruption to normal monthly rental payments. Further information and the application form can be accessed on the Scottish Government website.
The situation is of course changing on a daily basis and we will keep you updated as to further movements for landlords and tenants. If you have any questions in the meantime, please get in touch with our well-informed property team.