Coronavirus: Legal & Compliance Update – Lettings, with ARLA Propertymark
Webinar recorded live on
ARLA Propertymark CEO David Cox joined us on 7th April for a Legal & Compliance update for Lettings Agents. David summarised the latest government guidance and then answered dozens of your questions on topics including check ins, check outs, EPCs, gas safety certificates, Right to Rent checks, inspections, collecting rent and loads more. Essential viewing for anyone in Lettings.
Watch the recording now by clicking the video module above, or read a summary of some of David’s key points in the notes below.
David’s opening remarks
Lots has changed in the last 2 weeks and Propertymark has been successful in getting clarity from Government on a few things we’ve been pushing for:
Agents are now included in the business rates discount
Commission can be included in the Job Retention Scheme furlough payments
There are a number of grants available for small businesses based on rateable values
Clarity has been provided on Right to Rent checks and EPCs
David’s responses to your questions
What counts as an “essential move”? Under what circumstances can moves still take place?
The government guidance is actually pretty much crystal clear on this one. It’s three words: stay at home. The government couldn’t have been clearer. It is the simplest government guidance that has been issued in years.
What is the definition of “essential”? It’s where there is a threat to life if the move didn’t happen – e.g. a case of domestic violence, if the roof caved in, if there’s a gas leak, if there’s no hot water.
It’s essential if there is an absolute NEED to move that affects someone’s basic survival.
Every situation where it is just because somebody WANTS to move, is not essential. Considering the restrictions on movement, moving house at the moment just because somebody wants to is actually a criminal offense.
What about empty properties?
The virus lives for up to 72 hours. So only if the property has been empty for that time are you probably okay to move. Make sure to keep to social distancing when handing over keys and don’t go to the property – find a solution where you don’t have to. No physical check-ins or inventories should be going on at this time.
What about key workers that need to move to live nearer a hospital?
Yes, those kind of situations are likely to be okay– because it’s essential to dealing with and overcoming the pandemic. For example some landlords are offering short term Airbnb style accommodation on empty units around hospitals for free or at a very low rent. You would find it difficult to argue against that.
Can we do inventories?
An inventory isn’t essential. It’s most definitely best practice under normal circumstances but at this point in time it is a nice to have, not a need to have. There is no legal requirement for an inventory therefore inventories should not be taking place.
Try to do it remotely where you can, getting the tenant to take a video and photos. It’s a good idea to follow up and re-do the inventories retrospectively once the restrictions are lifted. Start by asking the tenant to sign something that says they accept the property is in very good condition, and ask them to send photos of everything that isn’t (scuffs, marks, etc). Otherwise the assumption is that everything is in good order, and you can use that as your evidence on check-out as you normally would.
How do we deal with deposit returns if you can’t do checkouts?
Don’t do checkouts. They aren’t essential as they aren’t a legal requirement, and you’re actually breaking the Coronavirus Act by doing them.
You could try and do some kind of video call when the tenants are leaving. But the greater question is…why are the tenants leaving? Doing a check out means they’re leaving home which is in breach of the stay-at-home guidance. You should be pushing to put these moves on hold instead.
If a tenant has already moved out, then they are going against the government’s regulations. In order to comply with your legal obligation, it’s perfectly reasonable that you say you won’t do the check out until the restrictions are lifted – and you’ll deal with the deposit deduction at that moment in time.
Where do we stand with doing fire/smoke alarm/gas/electrical checks?
The government has advised you do still have a legal obligation to do gas and electrical checks, and fire alarms likely fall into the same category although they haven’t issued specific advice.
If the tenant won’t let in an engineer, make sure you note everything in your files. Keep trying regularly and keep noting the responses in your files. Then make sure you go and get them all done as soon as reasonably practical once the restrictions are lifted.
If you find an engineer willing to do it, and the tenant is willing to let them in, you’ve got to cover yourself by doing some additional checks on both sides. Ask them if they’re self isolating, if they’ve had symptoms (and list them, don’t assume they know them), ask have they been in contact with anyone who has had the virus or been abroad recently. Then make a note of all this to protect yourself.
Then for the inspection, make sure the contractor and tenant stay well apart, ideally in separate floors or inside/outside if it’s practical.
When it comes to testing fire alarms on the first day of a tenancy, that one is trickier – but i‘d suggest getting the tenants doing it. Then make file notes of why you suggested that and what the tenant said.
What should we do about EPCs?
There shouldn’t actually be a massive need for them as they’re only required on a new sale or let, except on renewals.
The government advice though is that you do still need to get them done. Follow the same steps as for the answer above on questions to ask and make sure you’ve got it all documented in your file notes.
For renewals, the requirement is different depending on your tenancy types. If you’ve got a contractual tenancy that only drops onto a periodic tenancy, then it’s actually an extension of the previous tenancy and not technically a renewal because it isn’t a new tenancy. If it drops onto a statutory periodic tenancy, then it is technically a new tenancy so you will need to try and get an EPC done.
You can read a summary of the government guidance on EPCs here.
Can we do Right to Rent Checks without checking ID in person?
Yes. Please see a summary of the government guidance here.
Are tenants still expected to pay rent after their tenancy expires and we’re unable to move them out?
Absolutely. It’s the very first line of government guidance to tenants that they must continue paying their rent. There are huge amounts of government subsidies and grants going on at the moment to try and keep people’s income as close to “normal” as possible and help them afford their rent.
Tenants have signed legally binding contacts. Students in particular are just about to get their student loan, so there is some money still coming in – and they are still legally obliged to pay.
Some agents are using an “affordability questionnaire” to get a gauge of tenant’s current situation and work with them and their landlords to find a mutually acceptable compromise.
A mortgage “holiday” isn’t a holiday The landlord still has to pay the mortgage (plus interest) so we are very keen to stress that is the case and #keeptherentflowing.