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TODAY'S OTHER NEWS

Coronavirus break clauses being demanded by student tenants

Student renters want break clauses automatically included in tenancy agreements to protect them financially in the event of a second wave of Coronavirus.

That’s the result of a new survey conducted by websites Money Magpie and Save The Student.

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.

Before the summer there was a spate of claims made that tenants were being charged for accommodation they left vacant after returning home when universities and colleges closed as part of the UK lockdown.

Commenting on the findings a paralegal at Nelsons law practice - Paula Haverkamp - says: “If the [AST] contract contains a break clause and notice is served in accordance with one, the student’s obligation to pay for the full term of the tenancy will fall away. In other words, this will allow for early termination of the tenancy.

“Usually a break clause will not take effect unless the student has been in occupation for a minimum of six months. However, this may differ from contract to contract. A student can ask for a break clause to be inserted and caveat it in relation to a second wave of Covid-19, but a landlord does not have to agree.

“If a student is in university-owned accommodation, they will need to seek advice from their university in relation to a second wave. However, for students who rent privately as set out above, any agreement entered into is a binding contract. Students will need to negotiate with the landlord if they wished to end the contract early.”

She adds that if a student vacates early and refuses to pay rent due to Covid-19, a landlord is entitled to bring a claim for non-payment of rent. 

“When renting to students, most landlords will insist there is a guarantor. If this is the case and the student does not pay the rent, the guarantor will also be liable for the rent. If the landlord issues court proceedings and obtains a judgment for the arrears, and the judgment is not satisfied within 30 days, the student and their guarantor will have a county court judgment against them.”

Haverkemp says that some tenancy agreements contain a ‘force majeure’ clause, which dictates what will happen in the event that either party cannot perform their obligations under the contract due to circumstances out of their control. While Covid-19 may be a force majeure event, it is unlikely to stop a tenancy from continuing, she believes.

“If tenants are unable to pay their rent due to Covid-19 disruption, they need to speak with the landlord immediately. If they are working and are on a reduced wage, they will need to evidence this to the landlord, who may agree to a reduction in the rent. Tenants will need to remember that if a reduction is agreed, the shortfall will need to be made up for the remaining months.

“It is worth noting that the government has not introduced specific financial help in relation to Covid-19. Any students who are struggling to pay their rent must contact the university, halls of residence manager, private landlord or letting agent to discuss the matter with them, and to try to reach an agreement.”

Poll: Are break clauses a good idea in the current circumstances?

PLACE YOUR VOTE BELOW

  • Mark Wilson

    Students should take a stand on this, good luck to them. I found that my kids received very poor value for money and service in private housing, so a break clause will help level the field.

  • dale james

    Generally a fair idea. Then their finance for accommodation can cease if they are staying at home. It may mean a recalculation for their maintenance grants

  • icon
    • 27 August 2020 11:11 AM

    Nah student LL won't bother.
    They will just convert to normal professional tenants.

    Not worth bothering with flakey students.
    Let PBSA carry the can.

    Student properties are usually ideally located for professional tenants.
    Most are already set up for WFH!

    icon

    Well said, Paul.

    We have been advising our landlords to move over to professional tenants for the last couple of years. Rents are the same and tenants easier to manage. plus they usually look after the property better.

     
  • Helen Harvey

    As a Student Landlord, I simply could not afford to allow such a break clause and I will not be incorporating one going forwards.
    If there is another lockdown, the students can lock down in the house they rent. Indeed during the lockdown about 50-60% of my tenants did remain in their student house.

  • icon

    Think about this for 5 secs.
    Completely unworkable. An absolute nonsense. Covid 19 will be around forever. Student could say he’s suffering from Covid when in fact he’s hungover and gets out of paying the rent. LL going forward would only select students that have had a vaccine!!!
    Solution if they are that worried buy an insurance policy or LL will have to price in the risk of a Covid outbreak or better still rent to another market. Utilising force majeure. Complete rubbish

    Mark Wilson

    I expect you will be proven wrong and you over estimate your hand.

     
  • icon

    Be careful with this. Will it stop at C19? Is the C19 outbreak any more dangerous than a very bad flu year - many data-crunchers say not.

    Algarve  Investor

    Yes! Even the most conservative estimates suggest that more than 41,000 people died in the UK in the space of four or five months, way above the usual average.

    I, like many, was one of those who was thinking the threat might be overblown when it was being discussed in January and Feb. It was easy to dismiss as another Sars or Ebola, which didn't turn into a full-blown global pandemic.

    I'm amazed people can still dismiss the threat level and danger of Covid-19 - it was much more deadly than flu and is something that still needs to be treated with the utmost seriousness to avoid a second lockdown or the devastating scenes we've been seeing across the world, none more so than in the NHS.

    Fortunately, the signs suggest that the recent rise in cases is not leading to more hospital omissions and death, with young people in particularly seeming to be less affected. Hopefully the virus is also starting to lose some of its potency. But it would be madness to become complacent again - that's what caused so many of the problems in the first place!

     
  • icon
    • 27 August 2020 20:08 PM

    Unfortunately while you have excellent virus transmission devices still operating then anywhere in the world is 48 hrs from a virus arriving from the other side of the world.

    The devices by the way are

    AIRCRAFT

  • Matthew Payne

    This winter will be a one off, simply because we dont have a vaccine, and whilst that may make for students to argue these clauses should be accepted this year, it sets a precedent that is then difficult to pull back from. CV19 like flu is here to stay and people will die from it every year like they do from flu. Every year the vulnerable will be vaccinated and it will become an every day part of life in the 2020s. So do we then extend this to flu break clauses - how can you discriminate one virus against another? Then what about other illnesses or injuries? Pandora's box and one where students in the future may wish they had kept quiet when there is very little student accomodation on offer in years to come.

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    • 07 September 2020 11:14 AM

    I believe that many student LL will assess that the future risks aren't worthwhile letting to students.


    To be exposed to this market which can literally disappear overnight doesn't make for a very robust business model.

    Students are the flakiest of the flakey.
    I wouldn't trust my business viability on them.
    Maybe have a mixture of letting types.
    Maybe risk one student property that could be supported by net yield from other non-student rental property!?

     
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