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.”
This post has originally been featured in Letting Agent Today.