We are all saying it, aren’t we: these are the strangest of times. And because of that, there are a number of things that are happening in all sectors that would never have happened before. In the rental sector, landlords might be finding that their tenants – tenants they’ve never had issues with in the past – are asking for a rent payment holiday due to lockdown and coronavirus.
In normal circumstances, most landlords wouldn’t need to be asked, and most wouldn’t agree even if they were. But right now, the government has put measures in place that mean landlords should be giving rent payment holidays when they can. It’s just a temporary thing; the rent would still need to be paid, it would just be delayed.
Yet not all landlords can afford to do this – they’ve got their own bills to pay too, and if they’ve not been able to negotiate a mortgage holiday on the property, there could be problems for them that seriously impact their future.
The Landlord’s Dilemma
Understanding, flexibility, and communication are going in order to be crucial in order to work through this, as well as to devising realistic repayment plans. For instance, you cannot look for double rent for the subsequent three months as this is simply not going to be possible.
It is a hard harmony to achieve, but if you’re considering what to do, here are some questions you might want to ask your tenants before you decide whether to allow a rent payment holiday or not.
Ask The Right Rent Payment Holiday Questions
- Ask the tenant if they have been made redundant or been furloughed. There is a difference – made redundant and they might have a small payment but no income. Furloughed, and they should be getting at least 80 percent of their salary from the government’s scheme (and the other 20 percent is meant to be topped up by their employer). Do they really need a rent payment holiday in that case?
- Can they supply proof of their current situation from their employer? This could be useful if you need to ask your mortgage provider for a mortgage holiday as you can explain that your tenant is having issues.
- Have they developed an expenses spreadsheet to show their monthly budget?
- Are there any loans or credit cards that payment holidays can be taken out on rather than causing issues with your rent?
- Do they have savings? Tenants might be unwilling to make use of savings, but they may have to – we’re all having to use money we would rather use elsewhere if the furlough issue has been handed to us.
- Is there anybody else residing in the home who can help? Or is there a family member who can assist in any way?
- Make sure they know their rent remains legally due and will be a debt if they don’t pay – ask them if they are away of this, as it might be the catalyst they need to look at their savings or ask for family’s help.
- How do they propose to pay back the rent payment holiday amount?
- Would a rent reduction be better?
Finding out as much as possible about the situation, the reason for asking for a rent payment holiday, and what the tenants hope to do in the future regarding the debt is crucial – only then can landlords make an informed decision.