Landlord Q&A – COVID-19

As a Landlord in Northern Ireland, you may be worried about future rent arrears, tenant calls, property inspections, and the legal implications during this COVID-19 crisis. We have put together a series of questions that we have received and have endeavoured to answer these based on the current information. The situation changes and we will update this post when they do. If you have a specific question you would like to ask, feel feel to contact us.

LANDLORD QUESTIONS & ANSWERS

My tenant is an employee and their place of work has shut down. Will the Government be paying 80% of his wages?

The Government has announced a retention scheme to assist when a business closes due to COVID-19. The employer designates employees as furloughed workers. Essentially this means they will be retained as an employee of the company but will not be working. It is a way to avoid redundancies during this COVID-19 Crisis. If they are furloughed, then they will receive wages of 80% up to £2500 as long as the employee is not attending work but is retained as a furloughed worker and the business applies via HMRC for reimbursement.

The Tenant must ask their employer for clarity on how or if they intend to utilise this facility and if so how long they will have to wait before they receive their wages and also if the company are going to pay the additional 20%. We would recommend once the tenant has this information, that they provide a copy to the letting agent or Landlord for their records. Whilst this process is being implemented, we would recommend tenants pay their rent to avoid accruing arrears that may put their tenancy at risk once the crisis is over.

My tenant wants to use the deposit for this month’s rent. What should I do?

This is a matter for each Landlord to decide however, we would not recommend you agree to this. This situation may go on for several months and there are ways the Government are assisting tenants with loss of earnings. We would recommend having the tenant explore these options and continue to pay their rent or as much as they can to avoid large arrears accruing.

Bear in mind the deposit is security for when the tenancy ends. If your property is returned in less than acceptable condition and requires repairs etc then this is a cost that is deducted from the deposit. It is a security measure that shouldn’t be used during this crisis to allow tenants to forego paying their rent.

I have vacant properties. Is it less hassle to leave them empty?

We would recommend you market and rent the property out as soon as possible.  New tenants can be readily assessed for income and ability to pay as well as further tenant referencing completed. As yet there is no stop on people moving to a new home if it is necessary for them to do so and there are people where it is a necessity to move, even in this unsettling time.  You could issue a short-term tenancy of 6 months if you wanted additional security of being able to regain possession of the property. Tenants are receiving support for loss of earnings and for those already in receipt of benefits so you can have these paid directly to you and therefore are receiving income and not left with an empty property.

Almost all landlords are affected, so should an agent be offering anything to shoulder any pressure?

You can rest assured that we are working flat out to ensure that all properties are not empty, have eligible tenants and that rents are collected.  The Agents have families also and cannot work for free when they are handling many calls a day from worried tenants, landlords concerned and maintenance repairs to still coordinate as well as collection of rent. Essentially the letting agent is now having to add debt collection to their job description as no doubt there will be many tenants refusing to pay rent or stop paying for a short time and this needs managed by a professional who has no emotional ties to the property. At this time, we feel it is essential that a Landlord has a reputable letting agent to manage this situation and not be the one to receive call after call from distressed tenants. We are the ones to take that burden from you, so you have time to focus on other matters.

I have a tenancy due to end and wasn’t sure if I wanted it renewed. What should I do?

In these uncertain times, we would recommend that you secure the ongoing rental income. Should you end the tenancy, you are required to give notice, then face the possibility of the tenant refusing to leave and having no ability to evict at this stage. Resign the tenancy for a short term of 6 months of move onto a periodic tenancy.

My tenant can only afford to pay half the rent. How do I ensure this is all documented and agreed and that the arrears are paid?

In this crisis we feel it is vital to have a letting agent working for you. A clear audit trail will be required of all communication and documents during this period as well as a very professional and non-emotive approach taken. If you are not employing the services of an agent, then ensure to take accurate and detailed notes and records of all communication with tenants. These may be needed in the future if arrears are accrued and no repayment plan made. Ensure you know what you are entitled to and what your tenant is entitled to as well as making sure you have legally covered yourself. Agree a repayment plan and have this signed by the tenant once you have sufficient evidence of their situation.

My rental is empty at present what should I do?

Rent it out!! In these uncertain times, we would recommend that you secure an ongoing rental income. You can have a new tenant sign a short term of 6 months if you are concerned but this crisis will last for some time so think ahead more than a month or two from now on having no rental income and an empty property.

My tenant has said they can’t pay their rent, now what?

First of all, the Government are assisting tenants with loss of earnings so if a tenant simply stops paying their rent, you need to communicate with them. What is the reason they are not paying, what is their employment status, who are they employed with, what benefits do they receive are all answers you want to obtain. You then need to insist the tenant avail of the government support that is open to them and to provide you with copies of any documentation they have about their situation. Simply not paying rent is unacceptable without this. Make your tenant aware that accruing large arrears whilst temporarily isn’t going to result in legal action, once this crisis has passed there will be a process you can follow. They will be putting their tenancy at risk and the ability to rent a property in the future. We would recommend having a lettings agent handle this for you as it can be very stressful and at this time, it is vital accurate records are kept.

I am thinking of cancelling my letting agent to save me some money. What’s your thoughts?

Now more than ever Landlords needs to ensure the ability to manage the rent collection and property.  The situation is changing rapidly, and the support of a professional and experienced team is critical. Accurate records, constant communication, a professional approach is all required to ensure once the country stabilises, you are not left with arrears of thousands and no ability to recoup these.

My tenant has said they want to move out now and return to live with family, but their tenancy hasn’t come to an end. What would you do?

Whilst you are within your right to make the tenants liable for the rent until the end of the tenancy, it might be worth letting them leave if they are now in financial difficulty and not try to recoup the rent owed to the end of the tenancy. This could be easier than ending up with no rent and no ability to regain possession of your property without a court order. Once they have left, find new tenants and sign a short-term tenancy of 6 months. Alternatively, you can make them liable to pay but realistically are they going to? You have a security deposit for unpaid rent.

Tenants have told me they will not be able to pay their rent because they were paid cash in hand and the employer has laid them off. What can I do?

We would recommend having the tenant put in writing that they are no longer employed or receiving any wages. Then direct them to apply for Universal Credit. The housing element will be paid directly to Landlords; therefore, you are guaranteed some payment towards rent. Once they have been accepted for UC, have a repayment plan made for the unpaid rent and the shortfall in the monthly rent. We do sympathise with people at this unsettling time and as an agent we are working with both the Landlord to ensure their overheads are met and with the tenant who finds themselves financially worse off through no fault of their own. Document everything, receive proof of everything and keep in regular communication with the tenant.

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