Sep

EXCLUSIVE: Landlord wins £11k after judge rules on rent guarantee ‘Covid clause’

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A student landlord has won its court case against rent guarantee firm Housing Hand for issuing a pandemic exclusion clause to exempt tenants from paying their rent due to Covid.

The London firm successfully claimed back nearly £11,000 that it lost in rent arrears during the nine months the clause was in place and believes there may be many other landlords and agents who used Housing Hand as a guarantor during the pandemic but who have written off the debt.

In September 2020, Housing Hand told LandlordZONE that it had contacted 2,000 landlords and agents about accepting ‘Covid clauses’ and that 95% had agreed ‘reluctantly’ to accept them.

A judge at the London County Court (pictured) ruled that as the landlord’s agent had signed the pandemic exclusion agreement, it could enforce the guarantee against Housing Hand because the landlord itself had never agreed to the clause.

In addition, she ruled that if there was already an entire agreement clause – which in this case there was – this supersedes any pandemic exclusion clause.

The successful landlord tells LandlordZONE: “It was unfair that Housing Hand used the agreement to wiggle out of paying.

Claim call

“There may be other landlords out there who can claim against Housing Hand despite their agent having signed the pandemic exclusion clause and probably telling them that the money is unrecoverable. These landlords may now be missing out on rent legally due from Housing Hand.”

Housing Hand says the case was quite unusual as the rent arrears related to a property that had been sold mid-tenancy.

A spokesman says: “The position of the court was that the obligation on us as the guarantor would automatically transfer to the new owners, but the pandemic variation would not – and naturally we respect that decision.”

He adds: “Throughout the academic year of 2020-21 we promptly paid out to affected landlords and are working on corresponding sympathetic repayment plans with most of the tenants in question given the effects of the pandemic. The pandemic variation has been applicable in less than 3% of all claims that we have received throughout that academic year.”

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