It’s a worrying time for all of us, but what happens if your tenants stop paying rent? What can you do and what should you do?
The big question is whether they’re really
struggling because of social distancing, or are they just jumping on the
bandwagon and looking for a break?
Communication is crucial right now. If you’re
letting agency can’t help you reach out to tenants, it’s worth doing it
yourself. Start a dialogue with them so you understand exactly what is
happening for them and work with them to find a solution. Your tenant is likely to be extremely anxious
about keeping a roof over their head, so they will welcome the chance to figure
something out and take the pressure off. Obviously, you have to keep the rent
flowing, but everyone needs to be compassionate at the moment. If your letting
agency can handle the calls for you, be sure they approach the conversation
sensitively, so the tenant doesn’t feel threatened. Not every letting agent
treats tenants with respect. It’s a common problem that a lot of letting
agencies treat the tenants as ‘the enemy.’
That is the last thing you need right now.
It’s important that they can prove what their
current situation is. Laid off or furloughed?
Either way they should have the ability to prove their current
circumstances.
Perhaps your tenant has been furloughed? If
so, he may have a short term cash flow issue, but he will soon receive 80% of
his salary. Perhaps you could work out a short term reduction in rent to help
them and then figure out a mutually agreeable repayment plan?
If they have been laid off, find out what
support they are applying for and when it will become available.
I recently put together a Frequently Asked
Questions section on my site that deals with the most pressing questions
surrounding the Coronavirus and how it affects landlords. It covers:
As a Landlord do my tenants have to keep
paying rent?
As a Landlord can I still give my tenants
notice?
As a Landlord can I get a Mortgage Payment
Holiday?
As a Landlord do I still have to carry out
repairs?
As a Landlord can I still do my regular
inspections?
As a Landlord can I delay doing a Gas Safety Certificate?
As a Landlord am I still expected to comply
with the new Electrical Regulations due on the 1st July 2020.
Remember, the fundamental principle behind the
new act is not to make Landlords suffer unnecessarily, but simply to ensure
that tenants have a right to a decent, warm and safe place to live. The key to
getting through this period is communication.
If you are struggling with your letting agency
and need help working with your clients I can help. Email me at paul@performancepmltd.com and we can chat about how I can help you.
