HOW WE ARE SUPPORTING LANDLORDS AND TENANTS DURING LOCKDOWN
At Belvoir Stoke, there is never a quiet moment, as our busy workers find new ways to change and adapt to a virtual world. Whilst many people are just not working or saying there is no work so we have furloughed our staff, the same cannot be said for lettings agencies. There are houses under full management that just cannot be left alone. Landlords have ongoing responsibilities for gas certificates and repairs to keep a house safe. Not to mention more work going into interacting with tenants to support them during uncertain times and to help them get the right support and facilitate the rental payment. We just do not understand how some agents are just "not working". We have only furloughed one new member of staff, but the other 4 of us are still working full time. So here is a quick rundown of what we have done in the last month:
1. Secured Rent Payments
As much as we could, we sent our entire portfolio over to insurers for Rent Guarantee protection. Naturally, some houses will not be accepted as the tenant may have moved in a long time ago before our management and be lacking in inventories, referencing or deposits. We have had a slightly higher than normal rate of arrears, which was expected. However, Josie, our Property Manager has been fact-finding with the tenants to discover the facts behind the arrears and to signpost them to help like Universal Credit. We also called each tenant to advise on income protection policies available to help protect them against illness etc. Josie has also been putting some claims through to Rent Guarantee, which have been taking longer than usual to process by the insurers. Understandably, they are also home working and experiencing an influx of claims nationwide. However, having rental protection is better than not having anything and we are doing everything we can daily on this issue.
The thing to mention to tenants reading this is that rents are still due monthly. There are no holidays. If a landlord has rental protection cover and an insurer gets involved, they will be more ruthless in filing court proceedings to claim the debt and possesion of the house. So it's important to pay the rent and if you are really in trouble financially to claim Universal Credit and negotiate a rental payment plan. Don't take the fact of Rent Guarantee as the get out clause from rent payment obligations. Not all landlords will have such cover ayway, so don't risk your record and credit standing for the future.
2. Keeping up with changing regulations
Section 21
We are getting a drip-feed of changes to things like section 21 notices. Josie has had to issue several Section 21 notices, but by using the amended ones issued by government for this COVID-19 time. These notices now require 3 months' notice before eviction proceedings can begin. But there is absolutely no clarity as to whether evictions can begin in 3 months. Will courts be open? Will judges accept notices issued on March 13 before lockdown?
What about a situation of a tenant who is paying their rent during COVID-19 but perhaps not renewing their fixed term or not sending through some requested documents? Could or should landlords be issuing Section 21 notices to end their tenancies because of some non-cooperation unrelated to rent? I will leave it to you to decide if this is fair or not on the tenant. What are the priorities at the moment? How will it look in the press if a tenant sends a viral post on social media that they have been issued an eviction notice when rent is up to date?
How about not renewing a fixed term tenancy? By law the tenancy is in place under existing terms at the end of the fixed term, but rolling month to month. Meaning once the tenant moves in, there is a tenancy until terminated by tenant giving notice or by court order. So the fact the tenant is just not wanting to renew a fixed term during uncertain COVID-19 times is not, in our professional opinion, a reason to issue a Section 21 notice. It is an old bullying tactic and highly unethical, especially now. Tenants can't physically view houses at the moment, so how would they move out any way? We have dealt with all these scenarios in the last month alone.
Section 8
Let's consider Section 8 notices. These could be sent after 2 months of arrears, giving the tenant 2 weeks notice to vacate. Now the notice has to be for 3 months. So that will be 5 months of arrears before theoretically eviction proceedings could begin in court.
What can you do if you are a landlord with a tenant in arrears? Every case has to be handled differently. Please call Josie on 01782 478444 and she will be able to advise based on the latest legal advice we have received, with a caveat that the advice is changing all the time. You are best speaking to an eviction solicitor for proper legal advice.
Mandatory Electrical Inspections
At this point, it is unclear if mandatory electrical testing will come in for 1 July 2020. We cannot see how the testing can be carried out under lockdown. As soon as we have concrete guidance, we will let you know.
3. Virtual viewings and periodic visits
Very quickly as lockdown was imminent, we visited all our vacant rental houses and filmed house tours using our own phones. For some houses, we paid a professional photographer to do a full virtual tour. We quickly put all those video tours on as it became apparent that people wouldn't be able to physically view houses. It took the industry/Rightmove a further week or so to start promoting use of virtual tours. We were ahead of the game! As a result, we have had more than expected enquiries and virtual viewings. We have several rental applications on the go and some move ins have been carried out, whilst observing social distancing rules. However, it will get harder in May to move people in. It will depend on how essential the move in is. We totally understand landlords do not want vacant houses.
We are also carrying on with periodic visits, but in the form of virtual visits. Tenants are sending us photos or doing a walkthrough with us. We are then compiling reports for our landlords. The first few reports should have gone out already for houses that were due inspections during the lockdown. We thought that was better than not doing anything at all! The tenants have really surprised us by willingly going along with our idea.
4. Business sustainability
We also do not like vacant houses as we earn no income on them and no marketing fee, which is only collected when a tenant moves in. That has a big impact on our cash flow. Management fees alone are insufficient to cover costs and we do rely on things like marketing fees and sales completion commissions to have a healthy balance of income and expenses. However, with some planning under pressure, we are thankful for government support in the form of the grant for small businesses as well as the Coronavirus Job Retention Scheme for furloughed staff. It is these two schemes that are helping us keep our staff working and to meet our costs (and obligations) these few months. I want to reassure all our customers that we have a sustainable business due to keeping costs as lean as possible at all times. We are here and working as usual. We have had several new rental houses transferred to us the last 2 weeks, and we are confident when we are allowed back into our offices that the housing market will go crazy with a high number of people who will want to sell or move.
5. Gearing for growth
With that in mind, we are bringing forward a big project to change over our CRM system. Initially programmed for October, we are going to take advantage of this slightly quieter time to migrate all our data over to the new system. It will take us 6 weeks, expecting to go live May 26th 2020. It is expected that there will be disruption to rent payments for 2-3 working days beforehand as financial migration takes place. This software upgrade is necessary as it will make us more efficient in the future and it has been 12 years since we changed systems. Please bear with us. We will send a separate email out about the dates. We have chosen the third week of the month as that is the quietest rent period and reduces disruption to all.
6. Sales market
At the moment, we can carry out desktop valuations and put any vacant houses on the market. However, the public cannot physically view houses, so it will be difficult to sell a house off a virtual tour alone. Landlords and investors may do, but owner occupiers may not. Also please consider bankers, surveyors and solicitors. Many are not working or progressing anything. There are too many people in the sale chain. It only takes one person to not do their bit for the whole transaction to stall during COVID-19. Tilly, our sales apprentice, has been chasing everyone daily, but things are just not going to progress at normal speed. Please discuss with us if you have a house to sell. We will advise you accordingly.
Thank you for reading this update. I hope you have caught a glimpse of the things we are doing during COVID-19 lockdown. I am very proud of the staff at Belvoir Stoke, namely Josie Humphreys, Sandra Banks and Tilly Trow, who have embraced home working and technology instantly, who work full time adapting to new ideas and persevering despite their personal lockdown challenges. Renting or selling a house requires team work and we have the added challenge of the team working alone remotely.
For more tailored advice on how we can help you, call us on 01782 478444, Mon – Fri, 9 – 5.
Email: stoke-on-trent@belvoir.co.uk
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Ramona Hirschi
Managing Director
