Selling Tenanted Properties and Sponsoring Ukrainians – Things Landlords Should Know

There are a couple of issues that are cropping up at the moment:

The landlord has decided to sell the property but there is a tenant in place.

The government is making an offer for us to offer a home to people coming from Ukraine.

I Want to Sell my Tenanted Property

On a personal level, I have had more applicants telling me that they are moving because their landlord wants to sell the property that they are renting than ever before. I turned an application into a tenancy in three days this month because the tenant was so stressed and needed to move out rather than face a stream of viewers, valuations, etc. He was given a 12-month tenancy with a break clause and the Letting Agent had just told him that the landlord wanted to sell and was exercising the clause at 6 months. Like most tenants, he thought that the break clause was mainly put in to give the tenant the option and hadn’t been told that the landlords were considering selling the property. He said that he wouldn’t have taken the property had he known because he needs a stable home for about two years when he hopes to buy. In fairness to the landlord, she has shown him an email that she sent to the letting agent asking them to make sure that prospective tenants knew that it might only be a 6-month tenancy, and it was the agent who failed to tell the tenant until the landlord wanted to send in a valuer.

Online, a similar situation where the tenant has been in the property for a few years. The landlord wants to sell, but instead of someone talking to the tenant, she was sent an email giving notice that a valuer was attending because the landlords’ insurance company wanted a new valuation. It transpired that the landlord is in fact selling but didn’t want the tenants to know. In another case, the landlord has written to the tenant saying that he is selling the property and she can only stay until the sale goes through!!

Not to be judgmental; I know that there are many landlords who now need to sell because of the changes which: prevent us from claiming the interest on a loan to buy a property as an allowable expense against taxable income (known as Section 24), because of the growing amount of regulation, because of the worry about EPC ratings needing to rise to C in the near future, because of the potential loss of the ‘no fault’ eviction process under Section 21 ….. Then there is the increase in the Bank of England base rate up to .75% announced on 17^th March. It’s fair to say that many landlords haven’t got a choice and simply cannot afford to continue being landlords. This will have many repercussions, but that is a discussion for another day. I want to talk about best practices, in particular, being respectful and fair to tenants who have enabled us to be landlords until the time that we decide to stop.

There are several things that we need to remember:

A tenant is paying us to live in a property which is their home.
Tenants may have good reasons for needing to remain in the area – schools, jobs, family support…
The law gives tenants the right to prevent anyone from entering their home without their express permission having been given a minimum of 24 hours written notice. The tenant doesn’t have to agree if the timing of the visit doesn’t suit them or actually for any other reason unless there are statutory works or an emergency.
The law gives tenants the right to change locks and not to provide a key to the landlord if they feel that someone may invade their home without their permission.
If we want a tenant to leave, we need to serve a legal notice under sections 21 or 8 of the Housing Act 1988. We have no right to say that we will not be renewing the contract at the end of the fixed term, and even if we don’t the law says that the tenancy continues as a Statutory Periodic Tenancy on a rolling basis until either the tenant or a court order ends it.
Selling the property does not end a tenancy, it simply changes the landlord, and many properties change hands with the tenant in place, but we should still let tenants know at an early stage in the sales process.
It can take 6 months or more to remove a tenant through the legal process.

In a nutshell, a tenant can prevent us from selling simply by preventing viewings or even estate agents’ visits to take photographs and measurements, etc. It doesn’t make sense to try to hide what we are planning from a tenant and it’s very unfair if the reason for this is so that we can collect rent until the last minute when the property is sold. A landlord admitted that this was the reason on a recent Facebook group discussion. He was told, in no uncertain terms, that he was selfish for not even thinking about the fact that his tenants needed to find a new home, they were a family with children in two different schools and needed to stay in the area. Children who live in privately rented accommodation often have to face moving from their homes, this can be very damaging to the well-being of a child, particularly if they lose their friends. We need to give the tenant the longest possible notice that we intend to sell so that they can begin to look for a new home and reduce the stress of a move. The fact that we have no legal obligation to tell them shouldn’t prevent us from being fair and respectful and in the long run, they are less likely to obstruct viewings, etc., if they know what’s happening.

You may be selling with your tenants in place, but again, it’s respectful to let them know what’s happening, and explain what will happen to the deposit which they paid to you and the contract that they signed with you.

Something which made me furious was when a person commented on a Facebook discussion saying that the tenant would need a reference from the landlord and if they did not co-operate the landlord could give a bad reference. Not only is this unlawful, but it is also the type of behavior that gives us a bad name and will be the cause of more legislation which we will see when the Renter Reform Bill is published.

If we need tenants to move out and don’t want to go through a legal process or haven’t got the time, we can offer tenants financial compensation, but we need to be clear that this is their choice and if they do not want to take the offer we must then go through the legal process. Moving is an expensive process, especially if the tenant has a home full of furniture to move. Not being able to afford a deposit for the first month’s rent and the costs of furniture removal can prevent people from moving even when they want to, compensation can help to remove these obstacles. We don’t have to offer money, a rent-free period and return of their deposit in full is often enough. Other options are for us to ask landlord colleagues if they have any properties to rent that they can offer, if the tenants have been good tenants this is good for both the tenants and for a landlord with a property to offer who is reducing the risk which accompanies most new tenancies.

At the end of the day, we are better losing a few months’ rent than finding a buyer only to find that the tenant will sit tight until the Bailiff evicts them, as is their legal right, and is a long and expensive process especially if they stop paying rent while they save to move and, in the meantime, we have lost the buyer!

Be honest, go and meet the tenant and tell them that you need to sell, don’t tell them your personal circumstances, particularly if your reasons are financial, they don’t need to know that. Discuss time scales, particularly if there are children who try to work around school holidays, be flexible and show them that you realise that this is a shock and a big change for them. In the end, it is your property and you have got the right to sell it but working with your tenant will be less stressful for all parties.

Should Landlords Sponsor People Coming from Ukraine?

On 14^th March the Government published the Homes for Ukraine Scheme.

Homes for Ukraine scheme: frequently asked questions – GOV.UK (www.gov.uk)

Some of the important points:

People who offer a home to Ukrainians who they know or do not know are called their Sponsors.
Phase One of the scheme opened on 18 March 2022 for visa applications from Ukrainian applicants who have named people in the UK willing to sponsor them.
The scheme is open to Ukrainian nationals who were residents in Ukraine prior to 1 January 2022 and also to their immediate family members (for example spouse/partner and children under 18) who may be of other nationalities. Applicants can apply from Ukraine or from any other third country.
Under this scheme people will have access to public services, work, and benefits.
Named individuals can offer residential rooms or unoccupied self-contained residential units to a specific person or people.
Sponsors must at least offer a warm, clean empty room with access to bathroom facilities but not a room that is used as a living room.
They will be guests not tenants and should be treated like lodgers.
No rent can be charged. There will be a ‘thank you’ payment of £350 per month per household (this can be one person) for up to 12 months, paid in arrears directly to people who can accommodate one or more households.
Only one payment of £350 will be paid at one address regardless of the number of people we take in, we will not be expected to feed them, but they must have all utilities provided.
Those who accept accommodation under the sponsorship scheme will not be eligible for Housing Benefit, but if they rent privately or when the scheme ends, they will be able to apply for Housing Benefit via Universal Credit.
The government is providing extra funding for local councils to enable them to offer support and to work with charities and other organisations to support registrations with doctors, schools, etc….
Sponsors will be subject to standard security checks including Disclosure and Barring Service checks on all adults in your household.
For those living alone and claiming council tax discounts or other council tax discounts will not be affected.
Sponsors can apply for the scheme from any part of the UK. In addition, the Scottish Government is directly sponsoring a number of Ukrainians themselves. Individuals will be able to apply through the usual form but should choose the Scottish Government as their sponsor. The Welsh Government will also serve as a direct sponsor in the coming days.

Those wanting to sponsor can register here Homes for Ukraine: register your interest – GOV.UK (www.gov.uk)

“Anyone in the UK with a spare room or home can register, as long as:

you can offer accommodation for at least 6 months

anyone in the UK (of any nationality and any immigration status providing they have at least 6 months’ leave to remain in the UK) with a spare room, or separate self-contained accommodation that is unoccupied can come forward to help. Accommodation must be available for at least 6 months, be fit for people to live in, and suitable for the number of people to be accommodated”.

The government will publish guidance on the checks that they will make on both sponsors and the Ukrainians entering the country, details of the property standards required (these will be inspected by the local authorities who will also offer support), and the details of the arrangement which will be in place around offering Ukrainians a home.

For those who want to sponsor Ukrainian refugees, you should check with your insurance provider and your Lenders but the Government has been working with these groups and there is a statement from the Association of British Insurers Here: Ukraine Crisis ABI.

What if my Tenant Wants to Sponsor People Coming from Ukraine?

Before getting involved the tenant must ask the landlord’s permission, as I have said the Lender and Insurer must be asked but also any Freeholder where there is a lease. The landlord will also need to take account of the space available and make sure that there is no overcrowding otherwise the local authority will refuse to accept the accommodation when they inspect. Where tenants have a genuine desire to help and have a room that is unoccupied the landlord would need to consider whether there is any reason why he should refuse.

This raises the following questions:

What happens to the guest/lodger if the tenant leaves the property?

The government guide says:

“If for any reason you need to end the sponsorship arrangement early, you should inform your local council as soon as possible. Your local council will then step in to help guests to find different accommodation.”