The 5 steps you should be taking to maintain relationships, remain compliant and maximise your income

A lot has changed recently.

The measures put in place by the Government to protect tenants and landlords during the coronavirus pandemic mean that things aren’t quite “business as usual” in the private rental sector right now.

All parties have to be as understanding and patient as possible, and while landlords aren’t allowed to evict tenants during this national emergency, it’s by no means a green light for tenants to stop paying rent.

But, undeniably, many people have been put under financial strain as a result of the coronavirus outbreak.

Whether it’s because they’ve been furloughed or lost their job altogether right at the start of the fallout, lots of bank accounts are looking a whole lot less healthy than they were at the start of the year.

So if you have a tenant who has quoted COVID19 as the reason they can’t pay their rent in full or at all, here’s what you should do. Follow these steps and you’ll:

• Maintain relationships with your tenants and help them through a difficult time
• Protect the future of your rental income and continue to earn as much as possible now
• Remain compliant and above board with regulations and temporary emergency legislation

Step #1 – Offer support and kindness

As soon as you receive communication that your tenant isn’t going to be able to pay because of COVID19, tell them that you understand how hard a situation they must be in.

If they’ve been furloughed, ask politely for evidence to be sent from employers and explain that you might need this documentation if you end up needing to take a mortgage holiday in future.

Step #2 – Document your dates

Record the date that the tenant first approached you about their financial situation and continue to keep a diary of who said what and when – you never know how useful it might come in later down the line. Note down the property that the case relates to as you go too.

Step #3 – Be realistic about future rent

Make sure the tenant understands that they will need to repay any unpaid rent in the future. That’s very important. Just make sure you say it in a non-threatening way!

Remain considerate and sensitive to their situation and tell them that you want to be as supportive as you can but, of course, you will need to honour your own financial commitments too.

Step #4 – Set up a payment plan if needs be

Remember, these are “unprecedented times” – we’ve all heard the phrase a lot but it’s 100% true. And that means that you’ll need to be prepared to do things a little differently to make ends meet and put as little stress as possible on your tenants’ shoulders.

So suggest a payment plan and work with your tenant to come up with dates and amounts that will work for them, without piling too much pressure on.

If their finances are so uncertain that they can’t commit to an amount just yet, tell them you understand and you’ll be in touch in X days for an update. And make sure you do actually keep chasing them, and stay as polite and supportive as you can!

Step #5 – Keep up the conversation

Keep in touch with your tenant regularly about their situation and ask them for updates as and when things change. The friendlier the two of you become, the more likely you are to reach a new normal that works for everyone quickly.

As you would normally, remind them that their payment date is approaching a couple of days before rent is due. You’re much more likely to receive at least some sort of payment by doing so!

If you’ve got an agency working on your behalf, they should be doing these things for you, working hard to reduce any possible tension between you and your tenants and to get as much rental income into your bank as they can.

It’s certainly a tricky time for landlords, but if you grab the bull by the horns and approach your tenants the right way, you’ll create longer-lasting, better relationships and maximise your income at the same time.

And the good news is that the 3-month mortgage holiday has been extended to buy to let properties, so if your rental income drops to a point where it’s no longer manageable, you have got options.

Whatever you do, try to do it with a smile. And stay safe!