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Student Lets and Coronavirus

Given the effect of the social and other restrictions in force as a result of the coronavirus pandemic, private landlords who let to students and students themselves have been left wondering what impact those measures have on student tenants’ obligation to pay rent under a tenancy they have signed up to, where, for example, they are no longer able to attend University or they have moved home.

Assuming that the tenancy agreement is in itself otherwise valid, and there are no break clauses in it or the like, then a tenant is liable to pay rent under the tenancy for the term of the tenancy regardless as to whether they occupy the property or not.

In the absence of a force majeure clause in the tenancy agreement (such clause would be unusual in a standard tenancy agreement), the tenant could potentially look for recourse to the common law doctrine of frustration. This provides that a party is discharged from their contractual obligations if a change in circumstances makes it physically or commercially impossible to perform the contract, or would render performance radically different. This sets a high bar and the Courts have confirmed that the circumstances where it can be invoked are narrow.

Undoubtedly, the bar will be reached in some situations arising from Covid-19; for example, where the property is in a region that is subject to a state-imposed lockdown but, in many other instances, it will not assist the tenant. Further, the tenants could be assisted by the frustrating event of illegality, i.e. the government imposes bans on persons not otherwise of the same household living together.

However, the fact that a University the tenant attends / was planning to attend has been forced the close, either through government intervention or otherwise, will not by itself likely assist the tenant in circumstances where the property is not related to the University.

If frustration does arise, the contract will be brought to an end automatically. All parties are released from their obligations (except those that should have been performed before the frustrating event, which they can remain liable for).

At this stage, the government has directed that people should stay at home. That has created four potential groups:-

The tenants who were still in the accommodation as at 23^rd March (when the announcement was made) – they are unlikely to be able to claim frustration (at least at this stage) as they should simply stay where they are, in the rented accommodation;
The tenants who had already moved out of the accommodation by 23^rd March (when the announcement of the stay at home measures was made) – they may be to claim frustration, but that is by no means certain, as it could be argued that they had the opportunity to stay in the rented accommodation had they acted differently;
The prospective tenants who signed up before 23^rd March for the new University year – at this stage the stay at home measures are said to be in place for 3 weeks, but could be extended:-
1. assuming that the stay at home measures / social restrictions end by the date of the start of the tenancy, the tenant should not be able to claim frustration;
2. assuming that the stay at home measures / social restrictions do not end by the start of the tenancy, the tenant could potentially claim frustration;
Prospective tenants who signed up after 23^rd March before the end of the stay at home measures / social restrictions – they should not be able to claim frustration.

This situation is novel and fast changing and landlords and tenants will need to keep reviewing matters.

It will be for each individual landlord as to how they wish to progress matters – some will no doubt be more sympathetic than others to the tenants, should they be unable to continue / start University as a result of the Cov-19 effects on society in general.