Sep

95% of landlords reluctantly accepting Covid clauses in guarantor contracts but government ‘must step in soon’

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The UK’s largest rent guarantor supplier Housing Hand has revealed that 95% of landlords it has contacted agreed ‘reluctantly’ to accept a Pandemic Exclusion Clauses exempting tenants from paying their rent due to Covid under some circumstances.

Housing Hand has told LandlordZONE that it has contacted 2,000 landlords and agents since the pandemic began about accepting ‘Covid clauses’.

These sit alongside he accommodation provider’s Deed of Guarantee and has been on offer since March this year. These include:

If a tenant cannot take up the tenancy due to World Health Organisation (WHO) or government instructions, the AST cannot be executed, so the tenant and their guarantor are not financially liable.
If during the fixed term, the WHO or government advises the tenant to leave a property, then again neither the tenant nor the guarantor are liable to pay the rent when they are not in the property.

Housing Hand says some landlords and agents have refused the waivers, claiming they are relying on the tenants paying regardless of them being able to travel or the AST starting.

“Hopefully all will be well and the waiver clauses will not be needed, but if the rules are laid down at contract stage we can avoid the problems that arose earlier in the year where rent that should have been paid was not and many tenants were still legally liable,” says Terry Mason, Group Operations Director of Housing Hand.

Mason warns that, although many landlords are happy to accept these Covid clauses within guarantor contracts, unless the government steps in soon to relieve the financial pressure, evictions will start in earnest.

“The government cannot expect private landlords to bail them out, or just waive the debt the tenants owe, when the law states the tenants have to pay,” he says.

“This is the area the government funding needs to address, resulting in fewer evictions, undamaged credit histories and more property available to rent.”

Read more about ‘Covid clauses’.

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