The Christmas hazards for landlords…

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Especially this year, when people are confirmed to their homes, there is less chance to socialise and “let off steam” in pubs and restaurants, families are confined, and coming together over Christmas can easily degenerate in to family arguments.

The best case means that these are soon patched up, and all is forgotten, but in the worst case it means family break-ups, separation and divorces.

Any experienced landlord will tell you that January means couples split up, which brings with it complications with their tenancies. Either both parties leaving, or one leaving and one staying. If it’s a joint tenancy, then it ends when one party leaves. The landlord must decide whether to grant a new tenancy to the one remaining party – can that party afford the rent on it’s own is the big question?

Where the tenancy is in the name of one party, then further complications arise when a remaining tenant is not on the tenancy agreement. Again the landlord is faced with a similar decision; does the landlord issue a new tenancy and can that party afford the rent?

On the other hand, when families split opportunities arise for landlords, as a single household now becomes two, and twice as many properties are needed. I have rented out many a flat after Christmas to a single splitter, even had one case where a tenancy was signed and it was never fulfilled or the property occupied throughout the six month term, because the couple got reconciled and moved back in together.

The second concerning issue with Christmas, for landlords, is money. People get carried away with their spending, they simply throw caution to the wind to buy what they think family deserve in terms of presents or booze. It’s not until those credit card bills start hitting the mat in January that the real hangover begins, the pain of realising just how much has to be paid back.

It’s then that rent arrears can start to rack-up. The first the landlord knows about it is when that rent payment does not appear on their bank statement, or the cheque fails to arrive, but as Neil Cobbold, Chief Sales Officer at automated payments provider PayProp, says:

“Since March, increasing limitations on property possession claims through the courts have made 2020 a difficult year for landlords and letting agencies to deal effectively with serious issues such as rent arrears.

“The scant supply of repossession options will continue over the coming weeks due to an extended Christmas evictions truce between December 11 and January 11 2021, with no enforcement action allowed in England until January 25.”

The tendency during the festive period for rent arrears to build-up pushes many landlords into pursuing eviction through the courts, but this year their options are more limited than usual.

Landlords need to look to alternatives to eviction. Communication is the key wherever possible, and though there is a distinct tendency for tenants to “go to ground” when in arrears, a big effort should be made by landlords to offer help and reassure, after first investigating and perhaps using an independent intermediary resource, such a professional letting agent or mediation.

Letting agents can help by effectively and proactively managing communication between landlords and tenants, either preventing or reducing arrears through effective reminders or organising affordable repayment plans.

By digitally recording all payments and automating arrears chasing and employing the services of a dedicated eviction expert, agents and landlords can better navigate the changing rules during this trying period.

Next year, the prospect of a successful COVID-19 vaccine rollout and the financial support provided by an extension to the furlough scheme could improve the situation and pave the way for more normal eviction avenues to resume, says PayProp.

“However, there will still be challenges ahead as the minimum notice period for evictions (except for the most serious cases) remains at six months until March at the earliest. Meanwhile, there will also be the renewed prospect of Section 21 being scrapped as part of the Renters’ Reform Bill, further curtailing options.”

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