During this unprecedented time of uncertainty, the government has tried to help those in financial need including the small businesses, self-employed and tenants. Last week, the government applied a 90 day freeze on possession orders for non-payment of rent for tenants in privately rented properties. However, much like many of the proposed schemes, the details surrounding the process remains ambiguous and left many landlords wondering the legal position this leaves them in.
The 90 day period started this week and currently ends the week commencing 27th June 2020 and can be extended. This means that within this period, a claim for possession for non-payment of rent under schedule 2 of the Housing Act cannot be started for tenants in Assured Shorthold Tenancies. The government guidelines fail to establish whether this is for all or some of the rent owed and undoubtedly leave many landlords feeling open to exploitation.
After 27th June 2020 the guidelines do not provide hard and fast rules for reinstatement of rental payments after the lockdown period ends nor does it suggest how the ‘rent holiday’ effects any other terms in the tenancy. For example, if a tenant loses their job as a result of the outbreak, how long after the freeze has been lifted should a landlord hold off claiming possession. It should be assumed that the absence of a ‘one size fits all’ approach is a result of the uniqueness of each landlord and tenant case. We therefore suggest each landlord and tenant should be entering into agreements based on their individual needs.
If a tenant is asking for a rent holiday, then in order to provide both parties with protection and clarity, we urge landlords to establish the tenant’s individual financial position. We can then work with both parties to draw up a mutual agreement, supplementary to their current tenancy, in order to define temporary terms such a as rent payments and further obligations during the outbreak, benefiting and protecting both parties.
If you would like Lyons Bowe to work with you and your tenant at this time please do not hesitate to contact Sarah Baldwin, Lyons Bowe’s Head of Commercial Property on email@example.com or call 01749345756.