Q & A for Landlords during Coronavirus (COVID 19)



Top four questions landlord's are asking me at the moment with the current Corona virus pandemic

Hi, it's Danny Valencia here with My City Nest powered by Keller Williams and today I want to share with you the top questions I'm getting from landlords during the Corona virus pandemic. Many landlord's lost their tenants when other countries went on to lock down, whether that would be students that were just wants to go back home and be with their families or whether it was just people who wanted to be in their hometown during these uncertain times and not knowing how long this lockdown is going to be for.

Now, a lot of these tenants actually reached out to their landlords and let them know that they're going back and potentially not going to honor their agreement and therefore they were happy for the landlord to keep the security deposit. Unfortunately, quite a few tenants weren't kind enough to do the same and just disappeared. Now, depending to what countries they went to and whether it's likely, they're going to come back to the U K you really need to decide whether it's worth pursuing it or not.

I would advise, get in touch with a solicitor or a lawyer and see what your options can be. One thing to take into account is that courts are close at the moment and it's very likely that it's going to be months, possibly until next year before any action can be taken place.

Can I let my property during the stay at home? Now, firstly you can't conduct any viewings as its deemed for non-essential during the current stay at home measures, the government has provided some guidelines as to when you can actually let a property. Now, the first one is that the, of course the viewings have already taken place. The second one is that contracts have already been signed and they've also added to this that the move is actually essential. Otherwise, the family or the tenant will be made homeless. So, if you fit those three kinds of criteria’s then you can let your property.

Otherwise you're just going to have to put it on hold. It doesn't mean however you can't conduct virtual viewings. So, it's a very smart ways of you conducting viewings at the moment. Currently we are doing quite a fair amount of viewings which are being held virtually. So if you want to find out more about that, feel free to reach out to us.

Third question is, what if my tenant doesn't pay their rent? Now, in my opinion, there are three types of tenants. The first one is the tenants will continue to pay their rent. Their finance hasn't been affected in any way. The second one is those tenants who are genuinely struggling financially and the third are quite frankly the tenants who are just trying it on. I want to use this as an excuse. So the first thing I'm going to say is hopefully you've already reached out to your tenants.

If you haven't already, even if you haven't heard from them, reach out to them, find out they're safe, find out if their finance has been affected and provide them with good information. So links to government websites, which we'll share in this video as well. Now if your tenant has been affected by this, the chances are that in most cases their employers have actually applied for the follow and they actually get an 80% of their salary.

Most firms are actually topping up with the other 20%. Now, if there is a tenant that can't pay or pay part or the full rent, do your due diligence. Ask them for a sick note, ask them for um, proof of loss of employment, proof of loss of income. It's important to note that it's not compulsory for them to provide this. But if you've got a good relationship, you've got good communications, there's no reason why they shouldn't provide you with this information.

Now it's important that if you do agree with them that they won't pay the full rent right now for the next 60 or 90 days, then there is a solid plan in place that they do pay this rent back at some point in four months, five months or whatever the agreement that you make with them. Have that in writing and hopefully when they're back on track, then they can pay those arrears back to you.

And lastly is, can I apply for a mortgage holiday? Now, firstly, I'm going to say that, calling it a "Mortgage Holidays is a really poor use of words, but I'm not going to dive into that at the moment. I'll call it more as a break because you do have to pay that back at some point throughout the mortgage payments. So how does that work? And are banks actually providing these?

So, government and banks actually agreed to support people who were paying mortgages last month. And um, some banks or most banks are rolling this out, but it's not compulsory for them to do so. But what I've heard from most landlords is that banks are providing this support, which is great to see. So how does it work? So let's say you as an example, you have 19 years and three months left on your mortgage. Well, if you don't pay any of your mortgage in the next three months, then you come to that agreement with your bank, then it means that you have 19 years left, right? It just means that you are going to have an uplift for the next 19 years. And that's going to be spread throughout the next 19 years. So you will pay the free months that you've missed. It's just how the banks and yourself come to an agreement as to how it's going to be spread out in the next 19 years. It's also important to know that you will pay interest for those free months that you didn't pay your mortgage. There are other options that perhaps you can look into as well, such as move to interest only, or pay what you can afford, and then add the months that you differ to the end of your mortgage. So just speak to your banks and see what works for you.