Mary Latham: how to survive the Coronavirus-troubled student rental market

The high profile industry trainer and long-time landlord reveals how the student rental market has changed and what landlords can do to get through these strange times.

“In 2018-19, of the full-time and sandwich
students studying in the UK, only 19.4 per cent of undergraduates and 15.5 per
cent of postgraduates lived in provider-maintained property, or in student
halls owned by a university or college. At least 29% lived in accommodation
rented from smaller private landlords” Source Officeforstudents.org.uk

The student letting
market is a micro market within the private rented sector, unlike any other
tenant group, and you either love them or hate them but it cannot be denied
that students are a significant part of demand for private rented
accommodation.

 I love them and I do my best to keep them safe
(often saving them from themselves) and happy while they enjoy a time of their
lives which probably won’t ever come again.

Covid19 has caused me stop and re-think a routine with which I have been
familiar for almost 50 years.  My concern
is that some landlords haven’t got the information or experience to understand
the issues which are not immediately obvious. I am writing this for those
landlords in the hope of helping them to avoid making expensive mistakes at a
time when you don’t need any further stress.

Legal Considerations

Possession:

Possession
means that the property is in your control it doesn’t mean, as some people
think, that you own the property.

• We give
  the keys to a new tenant – that tenant now has legal possession. Even
  when he doesn’t pay the agreed rent, even when there is no signed contract,
  even when a signed contract has come to the end of the fixed term.
• How do we
  regain possession – there are ONLY two ways

1. The tenant surrenders the tenancy and
returns the keys to the vacant property

2. Enforcement of a Court Order, either when
the tenant leaves voluntarily on the date the Judge decrees or when a Bailiff
enforces the Court Order and gives you back possession.

• When is it
  illegal to take possession – When
  the tenant doesn’t want to leave, even when the end of the fixed term has
  arrived or the date decreed by the Court Order. Landlords cannot enforce a
  Court Order, force a tenant to leave for any reason whatsoever, move contractors
  or new tenants in while the property is occupied by even one of the original
  tenants.  NB.

The purpose of this
article is to protect the many landlords who only let to students and who are
used to the annual migration from one property to another on 1^st
July or thereabout. Those landlords who need to read this have no experience of
having a group of tenants who are on the doorstep with their worldly goods,
waiting for access only to find that the previous tenants haven’t moved out nor
do they intend to at that time

Those of us who let
to non-students know that it is risky to re-let a property until we are certain
that we will have vacant possession from the previous tenant and we certainly
wouldn’t allow new tenants to rock up until we had checked that the previous
tenants had moved out, carried out an inspection and collected the keys.

This is however
quite common in the student market where it’s not unusual for the outgoing
group to be passing the incoming tenants in the hall.  It’s often chaotic and stressful but it’s all
part of the charm of letting to students. Ask any cleaner who has been on her
hands and knees while people are moving both in and out. Often landlords get a
kick in the pants when they need to go through the arbitration process of the
deposit protection scheme and they have no check in or out inventory.

All well
and good but not this year!

This is the year where the cycle was broken in the student community.  No viewings for weeks, some members of the group gone home, some stuck abroad and some still living in a rented property but with no property in which to move. Then there are those who did sign a contract for a new property but are now stuck with people dropping out of the group and the fear of being responsible for the rent for the whole house because they all signed a joint tenancy with deposits and guarantors.

What does
this mean for landlords?

We need to learn and act quickly.

First a word to those who are thinking “I’ve got signed contracts and they are responsible for the rent for
the year whether they move in or not” Good luck getting a judge to award
you 12 months rent. Google force majeure
and you will see why.

Some words of advice from Paul Shamplina of Landlord Action:

“I’ve had numerous calls from Student landlords affected by this pandemic and the fear that students will not move in to their properties as Universities are closed.  I had one agent who had 30 students refusing to pay their rent on the advice of their University. 

If landlords have pre contracts signed, but not executed with tenants refusing to move in, I think open lines of communication , practicality and common sense has to prevail, mediate. The Government have made it clear that students have to pay their rent and of course they will have their parents as guarantors.  If a student refuses to move in, the landlord cannot afford that property lying empty for the term of the tenancy and risk trying to pursue the student for unpaid rent through the courts,  who knows if a judge deems this contract broken under terms of Force Majeure.   I know some landlords are now looking to convert HMOS back into family homes so they can let ASAP. This pandemic has caused crisis especially in the student rental market.”

Government guidelines

We need to manage
the situation carefully, following government guidelines for viewings and for
moving home.  These are for England

http://www.legislation.gov.uk/uksi/2020/500/contents/made

The Scottish
Government have said that they plan to allow the property market to reopen on
18^th June.

Up dates from Welsh
Government

https://gov.wales/staying-home-and-away-others-guidance

Up dates for
Northern Ireland

https://www.communities-ni.gov.uk/landing-pages/covid-19-housing

Plan of action

Contact
each individual existing tenant and ask:

• Are
  they and their families well?
• Are
  they still in your property? If not have they moved out completely?  If they are still there, what are their plans
  for the end of the tenancy?

This will tell you
where you stand.

Some of them will have returned home but
without all of their belongings, if this is the case you need to ask whether they have a new property
to move into for next year.  The answer
will open a discussion about when they intend to move out. We may need to take
a hit on the cleaning bill this year (the tenant fees ban prohibits us charging
for this) or we can reclaim from their deposit – probably not a great idea and
if you get vacant possession on the last day of the tenancy be grateful and
move on.

Some of them will tell you that they have
already moved out lock stock and barrel don’t be tempted to ask for the keys to be returned early unless they
offer, unless you want to give them a rent refund but make it easy for them to
return them to you before they come back to move into a new property – offer to
pay for the postage

Some of them will be in the property, often
alone and unable to return home or without family support in the UK; a problem and an opportunity.  Send them a pizza and ask if they need any
help either now or at the end of the contract. It’s worth transporting their
belongings to another student house to get your own back with vacant
possession.

If you have tenants
who are still in the property and who have nowhere to move to this could be an
opportunity to fill a room where one person has dropped out of the group or
find another landlord with an empty room, make his day and enable your tenant
to give you your property back without pressure.

If you end up with a tenant who won’t move out you need to go through a lengthy Possession Process under Section  21 of the Housing Act 1988.

Whatever happens DO NOT ASK OR TELL THE TENANT TO MOVE OUT… THIS IS AN ILLEGAL EVICTION AND CARRIES VERY HEAVY PENALTIES INCLUDING LOSING YOUR “FIT AND PROPERTY PERSON” STATUS WHICH PREVENTS YOU BEING THE LICENCEE OF AN HMO.

Find a landlord with an empty property and
organise a viewing or virtual viewing for the students who cannot now move into
your property.  Otherwise you will face a
claim for Breach of Contract on top of everything else.

Letting the property

If you’ve got empty properties or rooms:

Do not waste time
arguing with students or guarantors, don’t count the cost, communicate with
your existing and new students and offer them money if they let a room for you.
Post on Face Book Groups and any online letting sites. Contact local landlords,
local letting agents and anyone in the university who may want to help to make
this less painful than it needs to be.

Remember if you
can’t get a group of students there are other groups who might like to live in
a lively young area just be careful not to let to a family if your property is
in an Article 4 Area because you will lose your Established Use as an HMO

There will be some
students who were due to go abroad for next year and others who were due to go
on placement, many of them will return to their university, even where much of
the learning is online and they will need accommodation, this may go on
throughout the summer stick with it.

How online learning
will impact on the student market it a discussion for another day.

Remember to continue to protect yourselves,
your contractors and your tenants. I wish you luck at this stressful time.

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