Sometimes it feels as though the pandemic is all that anyone wants to talk about. That’s not surprising since it’s hard to think of any single phenomenon since the Second World War that has had such a profound impact on the way we conduct our personal and working lives. Lockdowns have varied in severity across the world but they have been major disruptors of the norm for every single one of us.
Before the virus took hold, most people in the private rental market operated on the expectation that they would probably spend less than a quarter of their waking life actually using their home. Between going out to work and sleeping there would be only a few hours of home wakefulness left over.
In March 2020 that started to change. At first home working became a widespread but temporary necessity, practically mandated by the government and dutifully adopted by the workforce. Some could not work from home of course, but the many who could did and still do.
Lockdowns have waxed and waned since then, but one constant that has established itself is remote or home working. Retailers and consumer services adapted to this new normal quickly, thus making it easier than ever to put in a full day’s work without ever leaving home.
And if that is a rented home, then one of the many unforeseen and unintended consequences of lockdown is the potential it has to affect the finances of private landlords.
Landlords have always been entitled reasonably to refuse tenants permission to work from their rented homes, but the scope is limited. If the landlord owns a property with a mortgage secured on it then the terms of that mortgage may impose restrictions limiting its use to residential purposes only. Neither landlord nor tenant has any discretion.
However, such terms tend to apply only when the whole property is being used for business purposes – using one room for desk work, admin, consulting or other personal services is unlikely to fall foul of them. Even so, your tenant should still get your written consent to what amounts to a variation of use.
Other reasonable grounds for a refusal would be concerns over wear and tear, which are unlikely to apply if work is confined to a workstation but could become an issue in the case of a hairdresser or beauty therapist, for example. Then there is the question of a nuisance to neighbours, which may not be confined just to noise but could include unusually heavy footfall and increased pressure on parking.
But if you’re content that none of this applies, then everything should be fine, shouldn’t it? Not necessarily.
Even a simple, standard, off the shelf tenancy agreement, will have been drawn up on the basis of key assumptions which the new normal of home-working is likely to disrupt.
If any of the utilities such as gas and electricity or other services such as internet connection are included in the rental price your tenants have contracted to pay, this will have been calculated in recognition of those few hours of wakeful home life we talked about earlier. Now you have a tenant who is at home potentially round the clock. You don’t need a smart meter to tell you that this will raise energy consumption significantly.
Increased use of council services could be another hidden timebomb. Even basics such as refuse collection and recycling could see greater financial liability attaching to landlords. Working from home will inevitably shift the pressure from working environments to residential, and if your tenant’s job creates waste and recycling beyond the domestic norm, you may well incur extra charges from the council.
Equally, most tenancy agreements will set out very clearly where the responsibility for both routine and unplanned maintenance lies. If repairs are necessary for items such as boilers, wiring and white goods, these will usually be funded by the landlord. But once again, the risk of any malfunction is calculated in the rental price. The more time a tenant spends in the home, the more pressure will be put on domestic appliances and heating systems. The predicted level of wear and tear contemplated in the agreement cannot help but increase.
Taken to its logical conclusion, this increase in ongoing maintenance is very likely to make the costs of repairs and reinstatement at the end of the tenancy significantly higher than envisioned at the start. An allied cost could well be the need for a landlord to take out a more comprehensive and therefore more expensive insurance policy. This may be a demand of the landlord’s mortgage lender, or it could just be simple good sense.
The lesson is: think ahead. Plan for the worst and cover yourself as fully as you can. Every landlord knows the importance of detailed inventories at the start and the end of a tenancy. If your tenant is planning to work from home, then a detailed property inspection is even more important than usual. It gives you certainty and protection in the event of any dispute regarding liability.
The increase in working from home highlights the importance of ensuring that mid-term inspections are carried out regularly throughout the tenancy. A mid-term inspection can highlight any maintenance or repair issues that may not be discovered until the end of the tenancy, meaning cost saving could be saved by identifying any issues that could get worse over time, and therefore cost more to put right.
Interim or mid-term inspections can now be carried out in person, but there are virtual solutions such as InventoryBase Live Inspections which enable inspections to take place without the requirement of an in-person visit. This is a great way to manage unavailability due to tenants having to isolate or for vulnerable tenants who prefer not to have a clerk or property inspector within their property.
InventoryBase can ensure absolute accuracy in recording the precise condition of the property and its contents. If home-working is here to stay, then a property inspection app is your ideal ally in the struggle to protect your assets, your rights and your interests.