Property and Employment considerations: Working from home – are you in breach of your residential tenancy?

The Government lockdown imposed on 23 March 2020 has meant that the majority of the UK is working from home. What are the implications for residential landlords and tenants?

Most, if not all, Assured Tenancy Agreements (ASTs) specifically exclude business use. They typically state that tenants must “Not receive paying guests or carry on or permit to be carried on any business, trade or profession on or from the property”. If a tenant has clients visiting their residential property for a commercial purposes and/or are using the property as a business, they may therefore be in breach of their AST. Two reasons for this restriction on use being required are that if a tenant runs a business from their property, they may breach the terms of the  planning permission for the property, as well as potentially creating a liability  to pay business rates.  Both issues which could cause considerable trouble and expense to a landlord.  In particular, if a property is being used in breach of planning consent and/or the tenant fails to pay any appropriate business rates which arise from business use, then local authorities may pursue the landlord for payment.

Further, it is important that  landlords check the terms of their mortgage, if any, to see if they contain restrictions on letting  residential properties for business use. If left unaddressed, it is likely that landlords’ insurance policies may be void, as business activity is usually not permitted under a standard insurance policy for properties let on a residential basis.  As a result, it is imperative that landlords provide appropriate tenancy agreements to their tenants, making clear the permitted use of a property and engaging with both the tenants and the insurers to adjust the terms of the landlords’ insurance to ensure full cover is provided.  Nonetheless, even if your tenant is in breach in of the terms of their AST, the Government suspension on possession claims prevents landlords from either obtaining or enforcing possession Orders until the end of June 2020 at the earliest, in line with current public health advice to stop all non-essential movement.

If you are an employer with staff working from home, do not forget that this does not obviate the duty to provide a safe working environment. Normally employers are expected to consider with employees whether their workplace is a safe environment. The fact that physical assessments cannot currently be undertaken does not mean an employer should not consult with an employee. Employers have a duty of care for the safety of their employees. Employers should ensure that they continually review advice from government and industry bodies and leaders and regularly review home working practices both generically and specifically for individuals.

If you are affected by the above and would like to discuss your options or would like legal advice tailored for the ongoing public health situation, please contact Head of Property Litigation – Joanna Osborne or any member of the Property Litigation team, or Linky Trott for employment related issues

We are continuing to publish regular online updates on all the legal implications relating to Coronavirus.

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