Part 1 of this blog was first published in the 56th edition of the LI Magazine on 24th April 2020. Whilst Part 2 was published in the 58th edition of LI Magazine on 7th May 2020.
Part 1
As the Coronavirus Pandemic continues to grow and the UK enters a further 3 weeks of lock-down, adapting your business processes and re-visiting your business plans is something all businesses have had to do.
Last week we hosted an online client event with many landlords seeking clarity about what help is available to them and what they should be doing to protect their future. The Question and Answer session proved to be an invaluable part of the event. Here we share the most asked questions: –
Q – What are the possible grants for the self-employed, and presuming I qualify, how can I be assisted to access it?
The self-employed grant is for individuals or a member of a partnership. HMRC will look at the last 3 years tax returns. (Tax returns from 2016/17, 17/18, 18/19) They will add these up, average them and multiply it by 80% then divide by 12 to get a monthly amount, up to a maximum of £2,500 per month. It is only payable if NONE of the following conditions are met:- 1) Your trading profit is more than £50,000, 2) Your self-employment income is less than 50% of your total income 3) If on your tax return you haven’t paid any tax. Having done the calculations, HMRC will contact you by mid May 2020 so there is nothing you need to do. Obviously HMRC will not have your bank details, so there will be a portal of some kind for you to input these details and a lump sum to cover the three month period will be paid. The money is likely to arrive in June.
Q -If a tenant is claiming statuary sick pay, is there anything they can claim in addition to this to help them pay rent during this time?
They should be able to claim housing benefits as well as council tax benefit and it is in the landlord’s interest to assist the tenant or at least keep on top of the tenant to ensure they have done this.
Q -My local landlord association has said that if you believe your tenant can pay but is not paying, you can pursue a claim for rents through the courts?
The difficulty here is that the courts are not functioning properly and what you are doing is ignoring the government’s guidance on trying to come to an arrangement with your tenant directly if you can. There is a need to be forbearing and accommodating on both sides. The best thing to do is to communicate with your tenant and be as neutral as possible because everyone is encountering difficulties during COVID19 and exploring the different sources of income or any benefits that they could receive is the best way forward. Often tenants who are employed or self-employed are just unaware that they are entitled to benefits and the key thing is timing. If they make a claim now or in the next few days and it takes months to sort out, they will still be entitled to the benefits from the date they made the claim.
Q -Will taking a mortgage holiday effect my ability to re-mortgage or borrow money in the future?
Lenders have agreed to allow people with buy to let mortgages to apply for a three-month mortgage holiday. As it stands, we have been reassured that it will not. Your credit file is typically affected by unauthorised (missed payments) or voluntary debt plans. The mortgage holiday is neither. As a note of caution though, interest will continue to accrue so you should expect to make higher payments afterwards.
Q -I am still in the process of purchase however have not agreed a completion nor exchanged contract. Should I proceed as normal? Will the lender still follow through with their mortgage offer?
We would suggest that you still proceed to allow yourself to be able to exchange and complete for when the Government restrictions have been lifted. Most mortgage lenders are extending all offers that are currently issued. We would also suggest that until the restrictions have been fully lifted then simultaneous exchange and completions are how you should proceed to reduce risk.
Part 2
In this 2nd part of our ‘most asked questions by portfolio landlords,’ our team of qualified experts from all areas of our business provide the answers to questions that are troubling landlords during this difficult time of uncertainty.
Q -I want to update my Will but not sure how I go about this, especially getting it witnessed?
If you are trying to make or amend your Will during COVID 19 then Section 9 of the Wills Act 1837 is causing the most confusion. It says that for a Will to be valid ‘the signature is made or acknowledged by the testator in the presence of two or more witnesses present at the time’. Interestingly wills can be signed and witnessed remotely e.g. through Skype or video conferencing in Scotland, however, the consensus appears to be that this is not possible in England and Wales. Witnessing through windows or in an open area while observing the recommended social distancing will be enough to meet S9 requirements.
Q -I have an empty property and a prospective tenant who could move in themselves. Is it ok to go ahead?
The current guidelines say that moving house “where reasonably necessary” during the emergency period is permitted under section 6(2) of The Health Protection (Coronavirus, Restrictions) (England) Regulations 2020. Homebuyers and renters should, as far as possible, delay moving to a new home whilst emergency measures are in place but if moving is unavoidable for contractual reasons then people must follow advice on maintaining strict separation to minimise the spread of the virus. Without understanding your potential tenants’ situation it is difficult to say, but if your tenant needs a home, is willing to move themselves, with no need for removal firms or contact with others and you both believe it is ‘reasonably necessary’ then there is no reason why he cannot move in.
Q -A working tenant who says she has the coronavirus and needs treatment does a runner (I have a £1,000 deposit which I hold via My Deposits) and then emails me to say she has left. I get this email 12 days before her next rent (£1,300) is due. After which there are still 7 months of our Assured Shorthold Tenancy agreement left. She has left the flat in a poor state, including extra furniture, her own extra mattress, etc, which we cannot get rid of as the local authority has stopped collecting bulky residential waste due to the pandemic. Do you think I have a case for saying the flat is uninhabitable to the local authority and should, therefore, be exempt from council tax until we can clean it and make it ready for occupancy?
You should certainly ask for an exemption from council tax from your local authority. You should contact the council tax department and state that a tenant who has said that she is suffering from coronavirus has left the flat in an uninhabitable condition and that you need their environmental health department to assist you in making the accommodation fit for habitation. You should copy the environmental health department into this email, and you may also want to contact public health professionals on 111 to seek advice and act upon it. In relation to the council tax issue, if you can show that the flat is unfit to occupy with evidence supporting this, you should get the desired council tax reduction.
Q -For new applicants, is Housing Benefit now included in all Universal Credit claims?
Universal Credit is an application made online on the government portal. It is separate to Housing Benefit which is administered by local authorities. So, the Housing Benefit application must be completed online but using the online portal of the local authority where your properties are situated, (i.e. the local authority you or your tenants pay council tax to for the particular property).
