Managing your landlords in the COVID-19 crisis

In this time of crisis and with the impact of the Corona virus, it is important to not panic but be aware of the options available to you when dealing with your Landlord.

Here are some points to take into consideration:

• A ‘rent holiday’, or ‘mortgage holiday’ is not the same as free money – it must be repaid in due course.  If you are unable to do so, then open and honest communication with your landlord or mortgage lender is essential from day one.

It is better given the circumstances to borrow the money than to miss rent or mortgage payments. To claim a payment holiday, you need to prove that you are unable to make payments in full due to the crisis. Cashflow forecasts , accounts and other financial information will be required.

• If you work for a business which has been closed, then you will receive 80% of your salary subject to a maximum of £2,500 a month. On this basis, you should be able to afford at least 80% of your rent or mortgage payments, if not more, because you will not be spending money on fuel, commuting, socialising and the like.

• If you are claiming benefits, these will be paid as normal, so you should be able to manage your finances as before COVID-19

• If landlords fall into arrears on their mortgage, without good reason, good communication and documentary evidence to support, it is highly likely that their mortgage lenders will take possession of the property and look to sell it with vacant possession.

This might not happen immediately, but it will happen at some point. If this happens on a large scale, tenants will find it extremely difficult to find another property to rent for the same price.

• Landlords will be able to recover possession of their properties when this crisis is over, as will their mortgage lenders if they are in arrears. They will also be able to obtain judgement for the debt. You will need a good credit profile to be able to buy or rent property in the future.

• Some landlords will have Rent Guarantee Insurance and Legal Fees Protection policies. This means that if you do not pay your rent an insurance company will pay your landlord instead. The problem with this is that the insurance company will then chase you for the rent arrears and pay all of the landlords’ legal costs to deal with your eviction and judgement for debt, as soon as they are allowed to do so. Landlords are unlikely to have any control over this once a claim has been made.

• Further clarification is necessary from Government regarding how self-employed people (including landlords) will be assisted through this crisis.

• It is the moral duty of us all to assist each other through this crisis and to ensure that a housing crisis doesn’t follow Covid-19.

If you want to find out anything further about this topic then please feel free to call on 0330 236 9930, 0330 236 9938 or 07961 116321. All conversations will be in strict confidence. You can also email vee@navigatebr.com

This article is for information and interest only. It is not a substitute for full professional advice, which will take in to account the specific and individual circumstances. Navigate Business Recovery Limited cannot accept any responsibility for any loss arising as a result of any person or organisation acting or refraining from acting on any information.