Evictions, RoPA & ‘Breathing Space’
With the rollercoaster year that was 2020 having finally ended, we are all hoping for some stability in the coming months, particularly when considering the impact of Covid on the housing industry. Whilst updates on the housing markets’ ability to remain open are slow in forthcoming, that does leave our industry active, working hard to keep customers safe and helping the countries economy to tick over.
Although stability in 2021 would be welcome, it may come in the form of change. After all, it has long been said that ‘The only constant in life is change’.
The early months of this year are likely to see landlords and letting agents focus on the problem of those tenants that are in arrears. Eviction notices and laws have constantly changed throughout the Covid pandemic and there are now many landlords facing huge financial stress because of tenant rent arrears.
This problem faced by landlords and letting agents has the potential to be further compounded by ‘Breathing Space’ Legislation (currently in draft); https://www.legislation.gov.uk/ukdsi/2020/9780348209976/contents
The legislation will create the following challenges for Landlords;
Once notified that your tenant has entered into a ‘breathing space’, Landlords and their agents must not do any of the following until the breathing space has ended:
- Contact the tenant directly in relation to the debt
- Obtain a warrant in relation to the debt
- Serve a notice seeking possession because of the debt
- Sell on the debt to a third party
- Charge interest on the debt over the period covered by the breathing space
- Apply for a judgement in relation to the debt
- Enforce an existing money judgement for the debt
- Take control of the tenant’s belongings during the breathing space
- Request third party deductions from Universal Credit or other benefits
- Start bankruptcy proceedings
Regarding lettings and evictions in 2021, industry expert Paul Shamplina, Founder of Landlord Action, recently said:
“In the rental market, I believe the six-month notice period for possession, brought in as part of the Coronavirus Act 2020, is unlikely to be reversed at the end of March and is most likely here to stay. The Government is adamant that the abolition of Section 21 is the right direction of travel. Now, we must wait to see how more permanent changes will benefit tenants whilst retaining landlords’ ability to repossess where there is a legitimate reason to evict, for example, anti-social behaviour or non-payment of rent.
Unfortunately, the delays to the eviction process will continue throughout 2021 driven by the backlog of cases and the expected surge in evictions next year, which could hit 150,000.
There are still plenty of reasons for landlords to remain optimistic as tenant demand remains strong and news of a vaccine should help improve sentiment as we tiptoe towards normality. There will be opportunities for landlords and investors as more companies reduce their office space or adopt a more permanent move to remote working.”
Mitigate the Risk
With the uncertainty that surrounds the evictions process, it is now, more than ever, of great importance to make landlords aware of their options for mitigating the risk of suffering rent arrears. Landlords should be made aware of their options to source a rent protection policy, to include legal eviction cover.
Furthermore, agents and landlords may wish to discuss with tenants their appetite for having in place a Rental Income Protection plan, Critical illness cover, and Life Insurance.
If you wish to learn about these products and how they can help you and your landlords just contact our team how can discuss the available options for you; 0203 823 9353.
The Introduction of RoPA
With the subject of rent arrears covered, agents may also wish to start looking at the questions, challenges, and benefits, that may occur with the introduction of RoPA;
The following link is a great introduction to the requirements expected upon the introduction of RoPA: https://www.propertymark.co.uk/working-in-the-industry/regulation-of-property-agents.aspx
2021 is gearing up to be a really interesting year for the Lettings Industry, and we can’t wait for the exciting year that lies ahead. It may have its challenges but we are confident that 2021 will also be a year of opportunity and progress in our industry.