How do I discuss Rent Arrears with my Tenant during Coronavirus?

HOP collects roughly £1m in rent each month. Our current arrears level is 12.8% of all rents to be paid, and that includes rents which have been gifted to Tenants by Landlords to help them though this period. This rate is better than we initially expected.

One of the reasons this rate is so low, is that most Tenants in the UK are still employed under the Job Retention Scheme, even if they have been Furloughed. However, there are still Tenants who have been made redundant, or are experiencing financial difficulties, therefore, it is important to ensure that these discussions are held on a case by case basis.

The main points to consider when discussing rent and rent arrears with your Tenant are:

1. Ensure the Tenant is aware that rent is still due.
2. If the Tenant is experiencing financial difficulty, or has been made redundant, guide them to https://www.gov.uk/ where they can obtain guidance regarding pay, statutory sick pay (SSP) and other relevant up to date information.
3. Once you have spoken to the Tenant, ask them to put their concerns to you in writing. It is important that you keep a log of these discussions for future reference.
4. Speak to your lender to find out whether they are putting in place any mortgage holidays that you may need to take advantage of. Some Landlords have already offered Tenants a discount on rent or a “rent holiday”. But please remember that, as with the mortgage lenders, this deferred rent will have to be paid back at some point in the future.
5. Speak to the Guarantor, where there is one. They should not be left out of any discussions regarding rent payments.
6. Check whether your insurer can offer rent & legal protection. A lot of our Landlords have already taken Rent Protection insurance. Some insurers will decline any new business. However, make sure that you check the policies that you may already have in place.
7. Keep records of every discussion. Each conversation over the phone, email, should be logged and documented as you may need an audit trail later if you make a mortgage or insurance claim.
8. Any pre-existing arrears (pre-18th March 2020) cannot be factored into this Coronavirus situation.
9. Please remember everyone is in the same boat. No one has experienced this before, and because it’s a public health matter, rather than a recession, the general mood is very different. We urge you to be compassionate and work together with your Tenants.

We hope this helps. Should you have any queries at all, or need any information or advice please do not hesitate to contact us on 0113 320 2000.

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