While we like to think that our lease agreements protect us during times like these, the reality is that the current lockdown and subsequent economic fallout is something none of us could have predicted or fully prepared for. After more than 100 days of the nationwide lockdown, the very real economic implications are coming to the fore. One of the groups affected right now are landlords, many of whom have been unable to collect rent during the past three months.
The value of knowing your tenant
- Make sure you have a stringent vetting process. Having quality tenants ensures you’ll be able to recover rent easier if tenants fall behind.
- Have an awareness of your tenant’s line of work. Understanding the implications on them during this lockdown puts some power back into your hands as the landlord.
- Focus on negotiating with tenants who claim to be unable to pay.
Keeping the lines of communication open
- Focus on what can be done. There’s no perfect solution that will solve the current crisis overnight,
- Having an open and honest conversation about repayment terms and what can and cannot be expected is a great way to start the process.
- Keeping the lines of communication civil and setting up clear guidelines is essential in protecting both the landlord and the tenant.
- Landlords need to work and communicate with their tenants during this time. It’s possible to come to a fair agreement that accommodates both parties, leading to a smoother and ultimately more successful long-term relationship.
The way forward
- Act swiftly, professionally, and stay in close contact with tenants in cases of rental disputes.
- Reach out to tenants who aren’t paying their rent through email, sms and calls, in an attempt to put together payment arrangements.
- Tenants should stay on good terms with landlords and find ways to work together to find solutions.
- If you’re genuinely unable to afford your rent, try negotiating with your landlord.
- Set up payment terms within a written agreement that stipulates the details and what both parties can expect.
According to projections from the World Bank, global economic growth could shrink by as much as 8% during 2020. While we’re currently in the grips of the lockdown, the effects of these economic events will continue to reverberate for months and – likely – years to come. The best thing landlords can do now, is to equip themselves with the necessary team to offer guidance and assistance as the situation becomes more complex.