A rent guarantor service has rejected criticism of so-called Coronavirus break clauses in rental contracts.
There’s been criticism in recent months of contracts obliging tenants - especially students - to honour tenancies even though the individuals may have moved out because of lockdown.
The break clause would lapse the rental contract, meaning students required to return home if their university was to close would not be liable for any remaining rent under the tenancy agreement, and landlords would be able to re-let the property - if they could.
A recent story on Letting Agent Today drew substantial numbers of comments criticising the concept but Housing Hand says it has added such clauses to all tenancies since March.
“The main clause means that if the students cannot take up the tenancy due to World Health Organisation or government instructions, the AST cannot be executed, so the tenants and their guarantors are not financially liable” says Housing Hand’s Terry Mason.
“The second protective clause is that if, during the fixed term, the WHO or government advises the tenants must leave the property, then again neither the tenants nor the guarantors are liable to pay the rent when they are not in the property” Mason continues.
The organisation says most agents and landlords understand and have agreed to these clauses, obviously reluctantly as both will be out of pocket should the clauses be triggered.
“Some landlords and agents have refused the waivers, as they are relying on the tenants paying regardless of the students being able to travel or the AST starting” explains Mason.
“Hopefully all will be well and the waiver clauses will not needed, however 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 students are still legally liable to pay back what is owed to their accommodation providers.”
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“The main clause means that if the students cannot take up the tenancy due to World Health Organisation or government instructions, the AST cannot be executed, so the tenants and their guarantors are not financially liable”
If this was to be accepted into a contract then same contract would allow us to evict immediately due to World Health Organisation or government instruction as We the LL would then be going against this instruction if we didnt. BTW the gov didnt advise anyone to leave the property.
I think its now clear that different types of AST needs to be offered ie
Six Month - Immediate eviction on non payment (like a hotel)
Three Year - Like the standard AST we have now
Student - With all these additional clauses above which will add to the cost of initial rent
Housing Benefit - Maximum management, Higher wear & tear, Dealing with council etc etc
One Year - Self repairing lease - Cheaper rent
A tenant & the Landlord now has choice
Never heard of Housing Hand before, for which I am truly grateful.
Here's an idea.
Students could source insurance to cover the rare circumstances where they cannot continue their AST contract.
So they pay for breaking their contract
Without having figures from Mr Mason who, unlike Perry Mason, does not give them, his claims are unsubstantiated.
"The organisation says most agents and landlords understand and have agreed to these clauses" - translation most of the agents and landlords who took out insurance with us agreed. That could be 24 out of 46.
"Some landlords and agents have refused the waivers" - that could be the other 22. agents and landlords.
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