Anyone can lose their job, and even with the most rigorous referencing no one can really foresee this. As a precautionary measure you should have written in your tenancy agreement a clause to notify you of any change in the tenants personal circumstances and when you conduct your interim checks ask the question – “Are you still working for the same company?” That way you always have current and valid contact details.
However, practical solutions, is what is needed if you are a landlord and one of your tenants has been made redundant.
Assuming you are aware of the fact showing some empathy initially does help, but in the same conversation you need to ascertain how they plan to pay the next month’s rent and thereafter. After all if you have a mortgage to pay on your buy-to-let and you have been made redundant your lender wants to establish the same thing.
In basic terms they have one of 5 options.
Regardless whether you like it or not, a tenant can seek assistance with their rent through their local housing authority benefits office. As a landlord you should have an idea what rate is payable under local housing allowance. Remember that if your tenant is under the age of 35 they will only qualify for a shared room rate. Ensure you have third party consent.
Are there any savings to dip into that could be used for a short period.
Agree to reduce the rent for a specified period of time to give them some breathing space – this works, especially well, if it is a joint tenancy and only one person has had their job been made redundant. Always put it in writing. This option will work best for a landlord who is not cash flow stricken and where they have good tenants and would like to keep them.
Use a proportion of their deposit every month for a limited period of time, if you have access to it. This would aid as a top up solution and their deposit would need to be re-paid back. Again the option works best if the situation is similar to that in option 3, and you must get a written agreement and the tenants to sign to this. The down side of this is that your deposit is depleting and therefore, you must ensure that once the tenant is back in employment this is repaid. If cashflow is not your issue, you can still ensure you do not miss out on your rent by deducting the agreed amounts at the end of the tenancy.
Get the tenant to surrender the tenancy.
With the economic climate still looking uncertain for 2013, if this happened to one of your tenants which option would you choose?
© Copyright 2013 George Ellis Property Services
020 7763 7200
This article is written by Marie Parris who is the Managing Director of George Ellis Property Services – A company that provides lettings, management, consultancy and training seminars. Marie is a specialist in residential lettings and management and for the last eight years has achieved zero arrears for all managed properties on behalf of clients. For the last eight years, she has been a speaker at the Landlord & Letting Exhibition Shows held nationally in the UK and has been on the judging panel at the Landlord & Letting Awards Show for the past four consecutive years. Her book, “The Simplified Guide to Letting & Managing Your Own Property” will be published in 2013. Marie, educates, inspires and empowers landlords who choose to self-let and manage their property without the use of a ¬sub-standard agency. George Ellis Property Services are members of ARLA (Association of Residential Letting Agents, APIP (Association of Professional Inventory Providers) and Property Lettings Ombudsman. Marie is a member of PSA (Professional Speaking Association) and is an accredited landlord who continues to self-let and manage her own property portfolio without any rent arrears and a cash positive income. She has over 19 years of experience