As you are no doubt aware from the very recent news, there are many tenants who are facing financial difficulties and there is a consequential loss of payment of their rent to you.
As of today (25th March 2020), I can provide you with the following information:
- If you do have a buy to let (or indeed any mortgage) in relation to your rental property(ies) you are now able to request a payment holiday from the provider. You will need to make contact directly with your mortgage provider to do this which I would advise you to complete on-line if you are able to do so. There are exceptionally long waits for telephone contact with mortgage providers and they are taking several days to process these applications but if this is you only option, then be ready for the long wait
- The government is currently bringing emergency legislation into play which states that you cannot evict a tenant for non-payment of rent due to the corona virus for a minimum period of 3 months but this is likely to be extended. The general view is that unfortunately landlords should allow for their payment of rent at a later date, which assumes that your tenant has a good payment history and that there is no arrears. There will inevitably be some who will use this as an opportunity not to pay their rent, but I would assume that there would be documentary evidence to prove that an individual has lost their employment/earnings from self employment which you could obtain
- You can also ask for a moratorium (a delay) on your tax payment due by 31 July 2020 and I would advise you to personally contact HMRC to arrange this. The HMRC telephone coronavirus helpline number is 0800 015 9559 and again be prepared for a long wait. Opening times are 8am-8pm Monday to Friday and 8am-4pm on Saturday. Please remember that this tax may still be due as it relates to the 2019-2020 tax year so you will have to pay this in the future
- With this in mind, I would advise that all landlords tax returns for 2019-2020 tax year are completed as a matter of urgency and priority, so that claims can be made in relation to the 2020-2021 tax year payments on account (due 31 January 2021 & 31 July 2021). This will then enable you to handle your cash flow for a longer period and can be monitored on an ongoing basis. We will be in contact very shortly regarding this
- If you have a rent guarantee scheme, then please do make contact with the provider and see what remedies are available to you. I would be very interested to find out what they say, so if you could let me know I would be grateful
- Lastly and if you are able to do so, either through your agent or directly with the tenant, keep in touch with them to see if you can find out how they are and if possible their current financial situation in advance. You cannot ask this question directly but any information gleaned at this stage will be useful to your financial planning. It may well be to your advantage at this stage to accept a reduced rent from the tenant to enable this payment to continue for longer, as we are in a crisis which is expected to last well over 6-12 months
So overall, this unfortunately not good news for landlords from a financial point of view but some of the above steps maybe helpful to you in the interim.
If you would like our help to understand the implications in more detail for your specific situation, call us today on 02394 003600 or click on the ‘Request Call Back’ button below and we will be happy to have a chat.
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