Struggling to Pay Your Rent? Here’s What You Need to Know

Tenants who witness a drop in their income as a result of the Covid-19 crisis are more likely to be struggling with rent payments than homeowners, according to a recent YouGov study which surveyed around 6,000 adults in the UK. It is further estimated that some 2.6 million tenants are expected to fall behind on rent payments because of the pandemic.
Simon Roberts, Senior Associate Solicitor, DAS Law, looks at consumer questions around rent payment and other tenancy related issues …

• I’m out of work and struggling to pay my rent because of the pandemic. Can I negotiate my rent with the landlords? Can I get discount?
The government is working with the Master of the Rolls to widen the ‘pre-action protocols’ for possession proceedings for social landlords to include private landlords. This will ensure that private landlords have to take steps to understand their tenant’s financial position and attempt to reach an affordable rent repayment plan before proceeding with any legal action against tenants for possession.

If you cannot afford to pay your rent due to the Covid-19 outbreak, you should contact your landlord to try to negotiate a payment plan based on your financial position at this time. This could include a temporary rent reduction or a rent holiday. It may also be wise to inform your landlord of the steps that you are taking to address the issue.
Legally, you are still liable to pay the full amount of your rent. It is likely that the landlord will try to recover the shortfall by spreading the cost over future payments, unless an alternative agreement is reached. You should ensure that any agreement between you and your landlord is documented.

• My lease is about to expire and I do not want to move due to lockdown and the pandemic Can my landlord increase rent during the lockdown?
For any tenancy, your landlord must first get your permission before they increase the rent. Any proposal to increase rent must be fair and realistic.

If you have a periodic tenancy that rolls on a week by week or month by month basis, your landlord cannot increase the rent more than once in any 12 month period without your agreement. If you have a fixed term tenancy, your landlord can only increase the rent if you agree.

A tenancy agreement will usually set out the process your landlord must follow to increase the rent. If your tenancy agreement is silent with regard to a rent increase then your landlord can attempt to renew your tenancy at the end of the fixed term with an increased rent, or agree a rent increase with you and keep a written record of this agreement that you both sign.

Additionally, if there is no rent review clause in your tenancy, your landlord is able to use a Section 13 notice to increase the rent. This rent increase can only come into effect once the fixed term has ended and has become a periodic tenancy, but the notice itself can be served during the fixed term. If you pay rent weekly or monthly, your landlord should give you one month’s notice. If you have a yearly tenancy, your landlord should give you six months’ notice.

You are able to challenge a Section 13 notice given to you by your landlord if you feel that the increase is unreasonable. If you are unable to resolve this with your landlord then this dispute can be escalated to the First Tier tribunal, but this must be received by the tribunal prior to the expiry of the Section 13 notice provided. We would strongly advise that you seek legal advice before proceeding with any legal claim to discuss the options available to you.

• How do I know if I’m entitled to housing benefits?
Housing benefits are now being replaced by universal credit therefore most people will need to claim universal credit instead. You may be eligible for universal credit if:

• You’re 18 or over (there are some exceptions if you are 16 or 17);
• You’re on a low income or out of work;
• You’re under state pension age (or your partner is);
• You and your partner have £16,000 or less in savings between you;
• You live in the UK.

You cannot claim universal credit if you received severe disability premium or are entitled to it. Further information with regard to the eligibility criteria for such benefits can be found at
https://www.gov.uk/universal-credit/eligibility

The government offers online ‘benefit calculators’ that will tell you what benefits you are entitled to, how to claim, and how your benefits may be affected if you start work. These calculators are free and anonymous – https://www.gov.uk/benefits-calculators

Local authorities are also providing support in the form of council tax reductions during the Covid-19 outbreak. Those who already receive a council tax reduction will automatically receive a new bill from the council. Those who do not usually receive a council tax reduction should contact their local authority to see if they would be eligible for a reduction during the pandemic.

• Can I get repairs and maintenance done during lockdown?
If you need maintenance or repair works carried out during lockdown, you should contact your landlord. Landlords still have an obligation to maintain the property during this time and should make all efforts to deal with any requests from you.

You should make your landlord aware of any issue at your earliest opportunity to allow them to take the appropriate action. The key in this situation is planning and negotiating a time that is convenient for all parties involved, especially if you or a household member are self-isolating. The government is advising both tenants and landlords to take a “pragmatic and common sense approach” to resolving these issues.

• My tenancy is due to end soon and I have been unable to find a new home because of the lockdown, can I extend my tenancy? Can I still move home during lockdown?
If you cannot find a new home due to the lockdown restrictions, you may wish to contact your landlord to inform them you are unable to move and to negotiate a tenancy extension. If your fixed term tenancy is due to expire, this will automatically continue as a periodic, monthly rolling tenancy.

All court action for possession is on hold until at least the 23 August 2020 due to lockdown restrictions. This means that your landlord cannot legally evict you during this time. In light of this, landlords and tenants must work together and continue to be flexible.

In England, you are able to move home providing that you can do so safely and are not self-isolating. During any move you should ensure that you are complying with public health guidance. If you feel you are at a higher risk from coronavirus, you may wish to contact your GP prior to any move.

For now, the property market in Wales, Scotland and Northern Ireland remains closed. Guidance suggests that if the move is not essential or can be postponed, then it should not take place until you are advised it is safe to do so.

• I’m out of work / was made redundant and cannot pay my mortgage because of Covid-19. Can I negotiate with my bank?
On 17 March, many banks agreed with the chancellor that they would offer support to those with mortgages and any other loans secured to the mortgage. Since this agreement, three month mortgage holidays are available to those struggling financially.

It is important to note that these agreements are voluntary, not compulsory, so any mortgage holiday must be agreed with your lender. You will remain liable for the payments that would usually have been paid during this holiday, however, mortgage lenders may allow you to spread this cost over future payments or extend your mortgage term.

Disclaimer: This information is for general guidance regarding rights and responsibilities and is not formal legal advice as no lawyer-client relationship has been created.