Can we help?
It is clear the coronavirus pandemic is likely to have a wide impact across the whole economy, with all businesses and individuals experiencing some loss, cost or inconvenience. We will do what we can to help you minimise any adverse impact on your rental investment.
As we are in extraordinary times, we know some people may feel particularly concerned, or isolated. The team at Maxine Lester are going to do what they can to keep delivering our great service. Providing we can all work, we expect to have some time to help others in this time of crisis, as we won’t be doing some of the things we normally do.
If you’re alone or need help, give us a call. We will see if there is something we can do, even it is just having a chat!
01480 494939Contact us here
What questions do you have . . ?
We have had a number of conversations with tenants and landlords expressing concern about how tenancies may be affected. Positively everyone seems to be pulling together, recognising this is a new and extraordinary situation.
There is also much political focus on this issue, with the Government issuing emergency legislation to prevent any new evictions proceedings starting during the period of the crisis, plus extending mortgage holidays to buy to let mortgages.
We thought it may be helpful to update you to address some key questions you may have.
What if my tenants cannot pay their rent?
This is the obvious big question, as a wide range of businesses may be affected, which may mean your tenants’ earnings could be affected. It is also the issue that has prompted the Government announcements.
We have asked all tenants to let us know as early as possible if they have any difficulties paying, so we can agree on any steps with you. In the first instance, we will be trying to assess how long their situation may last, and how much they can pay in the meantime. We will then be advising tenants to seek state support to help them meet their obligations.
The question is what next? Apart from the fact it may not be possible to change tenants (see ‘Can I evict tenants who don’t pay?’ below), it still may be more cost effective to keep your current tenant until things return to normal than try to change tenants.
By keeping someone in a tenancy:
- they may be paying some rent;
- they would be covering Council Tax etc.;
- any benefit payments they receive should cover some of the rent;
- they may pay off any accumulated debt over time;
- you would not have the cost of changing tenants when things return to normal
- you can claim on any existing rent protection policy
Whilst each case will need assessing on its merits, this appears to be a situation where there is a likelihood of some people not being able to pay their rent, and that having an impact on some landlords. We hope it is not you!
Positively we know the overwhelming majority of tenants properly pay their rent and let us know about any difficulties. We are confident they will continue to do their best to pay their rent if they can. Sadly for some, the hard fact may be that they may lose their income and have no prospect of getting paid work until the situation gets back to normal. We very much hope this is a minority of people.
Obviously we will update you quickly if there is any non-payment of rent, as we know people will be particularly sensitive to any rent problems in the coming weeks.
What about rent protection insurance?
If you have rent protection insurance under our scheme this should cover unpaid rent in accordance with the policy. The Legal Expenses and Rent Protection cover we provide through One Broker will pay your unpaid rent up to £2,500 per month for up to £25,000 p.a.. This should be more than adequate to protect your rental income for the period of corona virus pandemic.
The process would be on the day after the second monthly rent payment is missed you could make a claim which, if accepted, would pay the outstanding rent. Our policy does not have an excess.
However, the insurer would also want to minimise their liability and may seek to evict the tenant (at the insurer’s cost). The emergency legislation on evictions (See ‘Can I evict tenants who don’t pay?’ below) means the insurer will not be able to start eviction proceedings whilst the crisis continues. Once your tenant starts to pay rent you can tell the insurer you wish to withdraw the claim, thereby preventing eviction if you choose. In such cases, you may not be able to make a further rent claim for that tenant.
These are unprecedented times and we are working with our insurers to keep on top of current events, if we receive any further advice or changes due to the new emergency legislation, we will notify you accordingly.
If you do not have Legal Expenses and Rent Protection cover for an existing tenancy, it can be supplied for just £10 per month, but cover will not commence for 90 days.
What about mortgage holidays?
The Government has announced that emergency mortgage holidays of up to three months will be available to buy to let mortgages.
This clearly may help if your own cashflow is under pressure. However, we have yet to see the detail. Based on past mortgage holidays such an arrangement may have an impact on your credit score.
In any event, given interest rates are so low, it is unlikely this mortgage holiday would save your the equivalent of the loss of rent.
Therefore it may be prudent to calculate how much you would benefit from such a holiday in advance, so you can decide whether this would be useful should it be needed.
In the event you need to take a mortgage holiday, we will obviously provide any information we have that may help you.
Can I evict my tenants if they do not pay the rent?
In normal circumstances, if a tenant had not paid rent for two months, or had a bad payment record, you could start eviction proceedings. Also if the tenancy is no longer in a fixed-term tenancy, you could issue a Section 21 ‘no-fault’ notice to end the tenancy in 2 months’.
However, the emergency legislation prevents any eviction proceedings starting during the crisis, for any reason. Obviously dependant on how long the crisis lasts, this may not be a significant change compared with normal arrangements.
The bigger question is whether you would want to evict tenants during the crisis? Before considering a total lockdown, as seen in Italy, we anticipate a reduction in people looking for properties; social isolation is hard when visiting potential homes. We have already had tenants change their minds about vacating their property for this reason. That means you may struggle to find a new tenant if your tenant leaves.
However, as shown above (What if my tenants cannot pay their rent?”), it may be cost-effective to retain your current tenant until things get back to normal.
We recognise any unpaid rent may present you with a problem. Hopefully, this will not affect you directly!
What if my tenants want to end their tenancy?
Tenants’ legal right to serve notice to end their tenancy should not be affected. We have already had people cancel looking at new properties, to keep as isolated as possible. We have also had people change their mind about leaving a property until the period of isolation is over, as they consider visiting a number of homes to find a new home an unnecessary risk. Given this, we anticipate many people will stay in their existing property until things return to normal. Where a tenant wants to serve notice, we are checking they have considered these issues.
We anticipate tenants who have lost their income and have someone they can move in with, may serve notice to reduce any accumulated debt. In this situation, we will have a conversation with you, as it may be preferable for everyone for you to invite them to stay in their home until things return to normal.
What if my tenants need repairs carried out at my rental property?
We will now reduce the contact between tenants and our team, or tenants and the contractors we work with. We have already had people expressing concern that they are protecting themselves in their home, they don’t want strangers coming in if it can be avoided, which is entirely reasonable. We have also had contractors self isolating.
To achieve this reduced contact we will focus on getting priority repairs completed e.g. no heat, no hot water, no power etc..
We have advised tenants that any works that are not priority may need to wait, to minimise social contact. However, we have asked that they let us know what work is needed, so we can advise you and instruct contractors to start work as soon as they can.
Where repairs are needed, our contractors will liaise with tenants to clarify whether they are in isolation. If so they will ask tenants to keep as far away from them as possible during the visit, or agree to delay the work.
There is also the question of periodic safety checks required by Law e.g. gas safety certificates. We will continue to try and arrange these. However, we anticipate more may be delayed as tenants refuse to have the work done until things return to normal. Provided we can demonstrate we have attempted to arrange this work, your obligations as a landlord have been properly discharged. Obviously there will be a catch up when things return to normal.
We will also postpone any routine property visits to minimise travel and contact for staff and tenants.
Our team is planning to be available on the phones and email during this situation.
If you have any thoughts or concerns about this, or other questions we have not covered, then please get in touch: