Government must give clear statement on rental payments

Government must give clear statement on rental payments

8:51 AM, 6th April 2020, About 2 years ago 63

Text Size

The NRLA are calling for a clear statement from government in response to campaigners’ calls for rent payments to be stopped during the coronavirus crisis.

More and more landlords are contacting the National Residential Landlords Association saying their tenants are under the impression they no longer have to pay rent as a result of the pandemic.

The association is now asking government to clarify its guidance; that rents should continue to be paid where possible.

Some tenants believe that because lenders have provided the option of a three month mortgage payment holiday to landlords, they should not pay rent for this period.

Groups including the National Union of Students are also campaigning for rent breaks for tenants.

While the NRLA believes flexibility is necessary during these unprecedented times, it is calling on the Government to better publicise its guidance that tenants must still meet their legal and contractual obligations where they can – including paying rent – to dispel any myths.

Speaking for the NRLA, its Chief Executive, Ben Beadle, said:

“The mortgage repayment holiday is only available for landlords who are struggling to make their payments because their tenants are unable to pay part or all of their rent as a direct result of the coronavirus and through no fault of their own. It is not an automatic payment holiday and landlords who successfully apply still have to make these payments later on. It is not a grant.

“What it does allow is that where a tenant is having genuine difficulty in meeting their rent payment because of a loss of income, landlords have much greater flexibility to agree a mutually acceptable plan with the tenant to defer the rent due.

“This is not a green light to tenants everywhere to stop paying their rent.”

Given that 94% of private landlords rent property out as individuals and 39% have reported a gross non-rental income of less than £20,000, many depend on the extra rental income for their livelihood. Without this rent many would be unable to continue letting property, leading to a housing supply crisis when the epidemic eases, particularly for students returning to university.

Tenants are able to make use of assistance provided by the Government to replace lost income if need be including through the Job Retention Scheme, increased housing support through the benefit system and maintenance loans which continue to be paid to students.

The NRLA has called on landlords to show as much flexibility with tenants as they are able to within their means and has been heartened by the many stories showing tenants and landlords pulling together at this difficult time. This has included landlords offering properties rent free for NHS workers where they afford to do so.



Comments

by Mick Roberts

7:39 AM, 11th April 2020, About 2 years ago

Every time Corbyn opens his mouth, Renters jump for Joy.
But we know when his mouth opens, he's just made it worse for tenants long term. More Landlords think I've had enough. So many pack up, less choice for tenants, & remaining Landlords have the monopoly & can choose what rents they like should they wish. Supply & demand.

by akhan

14:39 PM, 11th April 2020, About 2 years ago

The guidance is very clear regarding rental payments in relation to downturn. The case in Central London Property Trust v High Trees House [1947] KB 130 deals with this in issue which should be of great interest to all.

If the tenant is still in situ then past consideration is not good consideration, in effect that the tenant is already under obligation to make payment under their existing tenancy agreement and full rent is due as the tenant is able to claim relevant benefits and government subsidies.

On the other hand, if the the tenant has vacated then this can amount to new consideration as the property has become vacated and would allow the the landlord to re-let should the situation improve. Promissory estoppel would prevented landlord going back on their promise to accept vacant possession in lie of of the return of keys.

If the landlord agreed to allow the tenant to remain and they both agree to accept less rent during this period of COVID, then no doubt that a promise to accept a smaller sum in discharge of a larger sum, if acted upon, is binding notwithstanding the absence of consideration under the concept of Promissory estoppel. The lower rent despite the fact that the promise was unsupported by good consideration, was successfully argued as new consideration in the above case . This would last until the tenants situation improved .

In the High Trees case, this arose during the war and the facts are very similar to COVID. High Trees leased a block of flats from CLP(landlords) at a ground rent of £2,500 per month. It was a new block of flats at the time the lease was taken out in 1937. The defendant had difficulty in getting tenants for all the flats and the ground rent left High Trees with no profit.
In 1940 many of the flats were still unoccupied and with the conditions of the war prevailing, it did not look as if there was to be any change to this situation in the near future.
CLP (Landlords) agreed to reduce the rent to £1,250 during the down turn years. The agreement was put in writing and High Trees paid the reduced rent from 1941.

Just before the war was over the flats became fully occupied and the claimant sought to return to the originally agreed rent as tenants circumstances recovered.

The rent would be returned to the originally agreed price for the future only when the occupancy returned to normal.

CLP could not claim back the arrears accrued during the war years when the flats were half vacant but the tenants were held liable when they became fully occupied and the conditions for them had recovered even though they failed to inform the landlord CLP.

Once the fog had lifted (COVID) the full liability was due once the tenants came out of difficulty.

Given most tenants qualify for government support I cannot see how you could argue that there is this difficulty with payments of rent and therefore full liability should be requested, all be it with some lag on payments being made.

Hope this clarifies.

by akhan

14:44 PM, 11th April 2020, About 2 years ago

Reply to the comment left by Liz Buckland at 06/04/2020 - 10:34
The guidance is very clear regarding rental payments in relation to downturn. The case in Central London Property Trust v High Trees House [1947] KB 130 deals with this in issue which should be of great interest to all.
If the tenant is still in situ then past consideration is not good consideration, in effect that the tenant is already under obligation to make payment under their existing tenancy agreement and full rent is due as the tenant is able to claim relevant benefits and government subsidies.

On the other hand, if the the tenant has vacated then this can amount to new consideration as the property has become vacated and would allow the the landlord to re-let should the situation improve. Promissory estoppel would prevented landlord going back on their promise to accept vacant possession in lie of of the return of keys.

If the landlord agreed to allow the tenant to remain and they both agree to accept less rent during this period of COVID, then no doubt that a promise to accept a smaller sum in discharge of a larger sum, if acted upon, is binding notwithstanding the absence of consideration under the concept of Promissory estoppel. The lower rent despite the fact that the promise was unsupported by good consideration, was successfully argued as new consideration in the above case . This would last until the tenants situation improved .

In the High Trees case, this arose during the war and the facts are very similar to COVID. High Trees leased a block of flats from CLP(landlords) at a ground rent of £2,500 per month. It was a new block of flats at the time the lease was taken out in 1937. The defendant had difficulty in getting tenants for all the flats and the ground rent left High Trees with no profit.
In 1940 many of the flats were still unoccupied and with the conditions of the war prevailing, it did not look as if there was to be any change to this situation in the near future.
CLP (Landlords) agreed to reduce the rent to £1,250 during the down turn years. The agreement was put in writing and High Trees paid the reduced rent from 1941.

Just before the war was over the flats became fully occupied and the claimant sought to return to the originally agreed rent as tenants circumstances recovered.

The rent would be returned to the originally agreed price for the future only when the occupancy returned to normal.

CLP could not claim back the arrears accrued during the war years when the flats were half vacant but the tenants were held liable when they became fully occupied and the conditions for them had recovered even though they failed to inform the landlord CLP.

Once the fog had lifted (COVID) the full liability was due once the tenants came out of difficulty.

Given most tenants qualify for government support I cannot see how you could argue that there is this difficulty with payments of rent and therefore full liability should be requested, all be it with some lag on payments being made.

by akhan

14:46 PM, 11th April 2020, About 2 years ago

Reply to the comment left by Bill irvine at 06/04/2020 - 10:54
The guidance is very clear regarding rental payments in relation to downturn. The case in Central London Property Trust v High Trees House [1947] KB 130 deals with this in issue which should be of great interest to all.
If the tenant is still in situ then past consideration is not good consideration, in effect that the tenant is already under obligation to make payment under their existing tenancy agreement and full rent is due as the tenant is able to claim relevant benefits and government subsidies.

On the other hand, if the the tenant has vacated then this can amount to new consideration as the property has become vacated and would allow the the landlord to re-let should the situation improve. Promissory estoppel would prevented landlord going back on their promise to accept vacant possession in lie of of the return of keys.

If the landlord agreed to allow the tenant to remain and they both agree to accept less rent during this period of COVID, then no doubt that a promise to accept a smaller sum in discharge of a larger sum, if acted upon, is binding notwithstanding the absence of consideration under the concept of Promissory estoppel. The lower rent despite the fact that the promise was unsupported by good consideration, was successfully argued as new consideration in the above case . This would last until the tenants situation improved .

In the High Trees case, this arose during the war and the facts are very similar to COVID. High Trees leased a block of flats from CLP(landlords) at a ground rent of £2,500 per month. It was a new block of flats at the time the lease was taken out in 1937. The defendant had difficulty in getting tenants for all the flats and the ground rent left High Trees with no profit.
In 1940 many of the flats were still unoccupied and with the conditions of the war prevailing, it did not look as if there was to be any change to this situation in the near future.
CLP (Landlords) agreed to reduce the rent to £1,250 during the down turn years. The agreement was put in writing and High Trees paid the reduced rent from 1941.

Just before the war was over the flats became fully occupied and the claimant sought to return to the originally agreed rent as tenants circumstances recovered.

The rent would be returned to the originally agreed price for the future only when the occupancy returned to normal.

CLP could not claim back the arrears accrued during the war years when the flats were half vacant but the tenants were held liable when they became fully occupied and the conditions for them had recovered even though they failed to inform the landlord CLP.

Once the fog had lifted (COVID) the full liability was due once the tenants came out of difficulty.

Given most tenants qualify for government support I cannot see how you could argue that there is this difficulty with payments of rent and therefore full liability should be requested, all be it with some lag on payments being made.

by akhan

14:49 PM, 11th April 2020, About 2 years ago

Reply to the comment left by Dr Rosalind Beck at 06/04/2020 - 11:13
The guidance is very clear regarding rental payments in relation to downturn. The case in Central London Property Trust v High Trees House [1947] KB 130 deals with this in issue which should be of great interest to all.
If the tenant is still in situ then past consideration is not good consideration, in effect that the tenant is already under obligation to make payment under their existing tenancy agreement and full rent is due as the tenant is able to claim relevant benefits and government subsidies.

On the other hand, if the the tenant has vacated then this can amount to new consideration as the property has become vacated and would allow the the landlord to re-let should the situation improve. Promissory estoppel would prevented landlord going back on their promise to accept vacant possession in lie of of the return of keys.

If the landlord agreed to allow the tenant to remain and they both agree to accept less rent during this period of COVID, then no doubt that a promise to accept a smaller sum in discharge of a larger sum, if acted upon, is binding notwithstanding the absence of consideration under the concept of Promissory estoppel. The lower rent despite the fact that the promise was unsupported by good consideration, was successfully argued as new consideration in the above case . This would last until the tenants situation improved .

In the High Trees case, this arose during the war and the facts are very similar to COVID. High Trees leased a block of flats from CLP(landlords) at a ground rent of £2,500 per month. It was a new block of flats at the time the lease was taken out in 1937. The defendant had difficulty in getting tenants for all the flats and the ground rent left High Trees with no profit.
In 1940 many of the flats were still unoccupied and with the conditions of the war prevailing, it did not look as if there was to be any change to this situation in the near future.
CLP (Landlords) agreed to reduce the rent to £1,250 during the down turn years. The agreement was put in writing and High Trees paid the reduced rent from 1941.

Just before the war was over the flats became fully occupied and the claimant sought to return to the originally agreed rent as tenants circumstances recovered.

The rent would be returned to the originally agreed price for the future only when the occupancy returned to normal.

CLP could not claim back the arrears accrued during the war years when the flats were half vacant but the tenants were held liable when they became fully occupied and the conditions for them had recovered even though they failed to inform the landlord CLP.

Once the fog had lifted (COVID) the full liability was due once the tenants came out of difficulty.

Given most tenants qualify for government support I cannot see how you could argue that there is this difficulty with payments of rent and therefore full liability should be requested, all be it with some lag on payments being made.

by Stewart

17:28 PM, 11th April 2020, About 2 years ago

Ben and the NRL are absolutely and utterly useless. Do I see them on the BBC? No. Do I see them writing articles for the national press? No. Do I see them making any kind of public appearance at all? No.
We need rid of the NLA and the equally useless RLA. Oh, sorry. They are being combined into one extra-useless organisation now to let us down even more impressively...

by Clint

17:31 PM, 11th April 2020, About 2 years ago

Reply to the comment left by Kabs at 06/04/2020 - 16:12
I have tenants who have not paid rent and were in the process of being evicted before the crisis began and now, they are now obviously jumping for joy as the eviction process has stopped, and I cannot see them being evicted before the end of the year as, I believe, I will have to wait until the the stage of the bailiffs.

More recently, I have had more tenants that have stopped paying rents and in fact one of them accused me of being greedy as, I did not have to pay my mortgage for three months and I still expected them to pay the rent. They have said that to be fair, they will not pay the rent for three months although, they are able to as, they believe that the banks have to let us off at least three months of mortgage payments.

by Clint

17:43 PM, 11th April 2020, About 2 years ago

Reply to the comment left by Alfington at 11/04/2020 - 17:28
I think we all need to switch from the NLRA to the National Landlords Alliance which I believe if there are sufficient members, we will get much more representation as I believe Larry Sweeny has the right approach.

I cannot understand how, as mentioned somewhere in these comments we house a fifth of the population, and yet have no organisation that can support us.

by akhan

17:50 PM, 11th April 2020, About 2 years ago

The Banks have only agreed to consolidate the missed payments over the remaining term of the Mortgage.

It would be sensible to have a professional body that provided clear guidance to landlords given that tenants have shelter as their trade body to advocate their needs.

by Freda Blogs

17:50 PM, 11th April 2020, About 2 years ago

Reply to the comment left by Clint at 11/04/2020 - 17:31
Have you sent them a copy of the Govt guidelines? They are very clear that rent must be paid.


Leave Comments

Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.

Forgotten your password?

BECOME A MEMBER