Coronavirus – Covid 19 – Open Letter To All Landlords And Tenants

by Anon

15:28 PM, 22nd March 2020
About 2 weeks ago

Coronavirus – Covid 19 – Open Letter To All Landlords And Tenants

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Coronavirus – Covid 19 – Open Letter To All Landlords And Tenants

Dear All

Every single human being on this planet is both concerned and affected by the Covid-19 Corona virus in different ways. During these difficult times, it is important that we all remain level-headed, which is why I am sharing my private thoughts with those of you who rent your home and those of you who own those properties.

Above all, please show compassion and think about what will happen when this crisis is over.

  1. A “rent holiday” or a “mortgage holiday” is not the same as free money. It MUST be repaid.
  2. If you are able to pay it is extremely important that you do so, for reasons covered later in this list.
  3. 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 etc.
  4. If you are claiming benefits, these will be paid as normal, so you should be able to pay for everything as you previously did.
  5. Further clarification is necessary from Government in regards to how self-employed people (including landlords) will be assisted through this crisis.
  6. If you are genuinely unable to pay some or all of your rent or mortgage, then open and honest communication with your landlord or mortgage lender is essential from day one. To claim a payment holiday will require you to prove that you are unable to make payments in full due to the crisis. There is no free money, it will need to be repaid, plus interest.
  7. If you are able to do so, it is better to borrow money than to miss rent or mortgage payments. Having a roof over your head is one of the essentials in life, such as food and warmth.
  8. If landlords fall into arrears on their mortgage, without good reason, good communication and documentary evidence of all of that, 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.
  9. 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 debt. You will need a good credit profile to be able to buy or rent property in the future.
  10. 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.
  11. 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.

Please take a long term view.

I welcome your comments.

God bless us all.

Anon.



Comments

Mark Alexander

12:06 PM, 24th March 2020
About 2 weeks ago

Reply to the comment left by Chica at 23/03/2020 - 23:26
I believe that is the intended purpose of it, and to share it on Social Media to raise the issue wider.

By all means share and link to the article.

Gilly L

13:18 PM, 24th March 2020
About 2 weeks ago

Thank you, it's a really useful summary.
We have tenants with guarantors - so I wonder how that might affect this as well?
We fully wish to support our tenants - but as you alluded to - the first ones ( and already have another pending request this morning) to ask us to 'suspend' their rent, were quick to align this to the mortgage holiday we would receive. I did think that they might possibly be conveniently not grasping the concept of 'free money'....it's a very tricky situation to manage, compassion V some kind of practical business fairness?? Any practical views or links to guidelines much appreciated. Thanks.

Sami

23:29 PM, 24th March 2020
About 2 weeks ago

Reply to the comment left by Alex Russell at 23/03/2020 - 07:06
Very helpful article, I have the same issue as the above. I am already being told by Tenants they have no work. And a shop I have on rent sells food is open but tenant said business is slow. So i don't know where i stand and what to do

Peter Waller

7:40 AM, 28th March 2020
About A week ago

This is very good. Common sense perhaps, but I think a lot of people are treaty this as an excuse to not pay. Am I able to copy this and send to my management company? I’d love them to send this to all landlords and tenants. Thank you.

Mark Crooks

8:09 AM, 28th March 2020
About A week ago

As others have already said, a great level headed post.

As landlords, if your tenants have not been in touch already it might be a good idea to plan what your response will be if you do get the call.

Perhaps have a few alternative solutions. I guess each household will need to be handled differently depending on the circumstances.

Offering a 3 month payment holiday will obviously build up a sizeable debt for the tenant and if their income has been decimated due to the virus, this may be hard or impossible to repay.

80% payment for furloughed tenants sounds like a sensible offer though.

Mark Alexander

11:26 AM, 28th March 2020
About A week ago

Reply to the comment left by Peter Waller at 28/03/2020 - 07:40
Rather than copying it, please send them a link.

We want them to know what Property118 is all about.

astj n

12:34 PM, 28th March 2020
About A week ago

Reply to the comment left by Mark Alexander at 28/03/2020 - 11:26Well done to Anon for posting his very helpful article that I have already shared today with another landlord who is affected directly.
To say things are changing quickly would be a gross understatement. I have seen today the action taken by Direct Line insurers at https://www.landlordzone.co.uk/news/breaking-direct-line-confirms-doors-closed-to-all-new-rent-guarantee-policy-claims?utm_campaign=LandlordZONE%20newsletter%20Mar%2028th%202020&utm_source=emailCampaign&utm_content=&utm_medium=email
I would take the view that the fact there is no legal framework available that would enable an insurer to pay claims now that evictions have been suspended for three months by the government and the fact landlords are able to apply for a three month payment holiday on their BTL mortgages if necessary, is to conflate different issues as settling a landlord’s claim for loss of rent is not a precursor to a lender or the landlord evicting the tenant and a suspension of mortgage payments is no substitute for loss of rent. But what does my view on these non sequiturs count for?
I don’t know whether any other insurers have yet followed suit and I suspect Direct Line’s position may be open to legal challenge.
Direct Line do acknowledge though that “Once this three-month period has ended, and providing the Government re-establishes the legal process, we will be able to progress with the claim as per the policy guidelines.”
With the crafty caveat “Following the end of this period landlords and their tenants will then need to work together to establish affordable repayment.”
We can guess what that means and claims will only be entertained when landlords can demonstrate they have been unable to recover the rent arrears. “Surely you have not tried hard enough yet to recover your rent Mr Landlord. Please make a bit more effort.”

Might this be the start of another Property 118 crusade?

lloydbuilders@hotmail.co.uk

14:29 PM, 28th March 2020
About A week ago

Just one slight problem with para 10 - We have Rent Guarantee and Legal Cover but have been swiftly informed that in a Pandemic such cover is suspended!!
Anyone else with a similar problem??

Mark Alexander

14:47 PM, 28th March 2020
About A week ago

Reply to the comment left by at 28/03/2020 - 14:29
I have just spoken to Chris Sheldon at LettingSupermarket and the rent guarantee insurers (DAS) will definitely pay out.

Chris also emailed all landlords and tenants earlier this week and was delighted to report that problems are a tiny fraction of what he first feared.

Sensible forecasts show that the LettingSupermarket business model will remain profitable even if no new Lettings occur in 2020.

Mark Alexander

14:48 PM, 28th March 2020
About A week ago

Reply to the comment left by at 28/03/2020 - 14:29
PS - DAS are the largest underwriters of RGI cover in the UK, by far!

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