We’ve put together some of your most frequently asked questions regarding Covid-19 and our Rent Protection policies, which will hopefully give you all the information you need.
My tenant has contacted me to offer a payment plan with a reduced amount of rent for a period of time. An agreement is made with me that the debt is to be re-paid over 6 months following the reduced rent period. Should I make a claim on my Rent Guarantee policy?
The government has set out its intention for landlords and tenants to reach an amicable and mutually agreeable solution to deal with any rent arrears. This could include deferral of all or part of the rent due for a period or a reduction in rent due.
This type of agreement is known as a rent deferral and must be must be confirmed in writing by both parties It should specify both the rent deferral itself in addition to the future payment plan. We would require evidence of the agreement should any Rent Guarantee claim be submitted for the property.
Any future claim should be submitted in accordance with the notification period detailed in your policy documentation. An example of which would be within 7 days of the arrears balance exceeding the equivalent of one month’s rent. The arrears being the amount of rent unpaid as per the deferral agreement.
My tenant and I have agreed a reduced amount for a period with no deferred amount. For example, the rent is reduced from £1000 to £800 for 3 months. Is this acceptable?
We would encourage this type of arrangement wherever possible. Where a rent reduction is agreed with you then this should be correctly documented through an addenda to the tenancy agreement, which is in line with legislation.
The rent guarantee policy will not cover the difference if the rent on the tenancy is reduced. However, in the event the tenant defaults on the rent then a claim can be made in accordance with the new documented agreement.
I agreed a rent deferment with my tenant but do not want to progress with legal proceedings to gain vacant possession. Can I still claim under my Rent Guarantee policy?
No – the Rent Guarantee claim is only accepted on the basis that legal proceedings to gain vacant possession will be issued against the tenant. If the landlord does not wish to proceed then a claim cannot continue and any rental benefit already paid out under the policy will be recovered from you as the policyholder.
My tenant has contacted me to advise that they may find it difficult to pay the rent due to experiencing financial difficulty relating to the Coronavirus. What should I do?
You should contact the tenant and attempt to enter discussions to reach a mutually agreeable solution with them to try and reduce the amount of arrears they could accrue. Do not refuse any reasonable offers by the tenant and keep us fully informed. Please speak to us before taking any action which may prejudice future legal proceedings.
Please note that revised provisions, which are under discussion with the government, may mean that unless a meaningful attempt has been made to reach an agreement, possession orders may not be granted. Additionally sanctions in terms of cost awards maybe made against you.
My tenant has defaulted on the rent and I have attempted to contact them and offered a payment plan but the tenant is not responsive and remains in the property (to the best of my knowledge).
In these circumstances you should submit your claim in the normal way. As part of your claim submission you should also submit evidence of your attempts to contact the tenant and offer a payment plan.
When should I submit a claim – is it different with Covid-19?
No. Claims should continue to be submitted in accordance with the notification periods detailed in your policy documentation