Six things landlords can do about rent arrears (2 minute read)
In this two-minute read, we look at helpful new advice for landlords dealing with cases of rent arrears.
At the beginning of the pandemic, many predicted Covid-19 would have a disastrous impact on the private rental sector.
But new figures show that 90% of tenants have paid their rent in full during the pandemic—a better result than many had anticipated.
Unfortunately, we’re not out of the woods yet. Covid-19 will have a significant impact for some time to come, so the issue of rent arrears is still a very real one.
*With this in mind, several property industry organisations have pooled resources and published some useful guidance for landlords and tenants on rent arrears. Here’s a rundown of the main points for landlords.
Communication is key
No news isn’t always good news. If you haven’t spoken to your tenant for a while, get in touch and see how they are getting on. If their circumstances have changed, it’s better to know about it as soon as possible. Remember some people’s lives have been turned upside down by Covid-19, so be professional and compassionate.
Keep the conversation going
If there is a problem, there are several options you could consider, such as rent reductions or deferred payments. The action you take will depend on the circumstances. It could be that offering a rent reduction will cost you less than finding a new tenant. Market values in your area may have changed, meaning that if you did re-let the property, it might be at a reduced price.
Keep written records
Document all conversations with your tenants. Often exchanges take place on the phone or via text and can be misconstrued. Clarity is key. Always follow up with an email reiterating what has been said and agreed. This means everyone knows where they stand. And if the situation does wind up in mediation, or in court (we hope it doesn’t, but you never know) you have clear records to refer to.
If you have multiple tenants in a property
Make sure you are having conversations with all the tenants in a property. Never rely on one tenant to speak for another or to pass the information on. This could be a recipe for confusion and dispute.
Don’t forget the legal implications
If you do come to a new agreement, think about how it squares up to your legal responsibilities. For example, if you reduce the rent, does this change the amount of deposit you are legally allowed to hold (with a registered deposit scheme, of course)? If the rent drops, you may have to return a small proportion of the deposit to keep within legal guidelines.
The Easier, More Effective Alternative
Given the complexity of some of the issues involved, consider getting an experienced letting agent to deal with it for you. Many landlords will never have managed a case of rent arrears before and be in new territory. Having capable professionals like us, to lighten the load will save you time, money, and stress.
*Arrears Management and Coronavirus is published by the NRLA, the Chartered Institute of Housing, the Property Redress Scheme, ARLA Propertymark, the Tenancy Deposit Scheme and My Deposits.
Millbanks are here to help during these testing times. If you’d like advice on any of the matters discussed in this piece, get in touch.