Over the past few weeks Enda McGuane, managing director of Winters Property Management, has been answering property related questions relevant to the Covid-19 crisis in The Irish Times on behalf of the Society of Chartered Surveyors of Irelsnd (SCSI ). Below is an extract of some of the questions and answers
Question. My tenant who cannot pay during Covid-19 seems to think that when all back to normal he just resumes paying and then does not have to catch up. So, he’s getting three to six months free and then I just get my mortgage extended by three to six months. Tell me that is not the real situation.
If a tenant says that they are availing of a three-month rent freeze and not paying any rent for three months how should I respond?
Please explain the meaning of rent freeze. Some tenants think it means they don’t have to pay rent for the next three months.
Answer. These three queries are similar, and all relate to the term “rent freeze” so if you don’t mind I am treating them as one question. The term was first reported as forming part of the Government's response to Covid-19 about three weeks ago.
The Government then passed Emergency Measures in the Public Interest (Covid-19 ) Act 2020 which was signed into law on March 27. This, among other temporary emergency measures put in place, was aimed at mitigating the impact of the Covid-19 pandemic on residential tenants. It sets out various measures which will apply for what is called the “emergency period”, this is three months starting on March 27.
The Act ensures that any increase in rent (whether notified to the tenant before or during the emergency period ) shall not take effect during the emergency period and that rent increases which were due to fall due during the emergency period shall not be payable. This is the “rent freeze” referred to in your queries.
In simple terms, the monthly rent which was payable immediately prior to the emergency period remains the rent payable for the duration of this period and any proposed increased in rent will not be payable until after the emergency period lapses. Tenants are still obliged to pay the existing rent as per their lease. However, many landlords have responded to the Governments calls for forbearance and have agreed temporary reductions with individual tenants. It is important that any agreements reached are clearly outlined in writing (email ) so that there is no confusion post crisis.
Question. My‘lender has refused to follow the five mains banks' position. Is there any way of encouraging them to do this?
Answer. In the short term the answer is no, unless the Government introduces specific legislation. However, you need to engage fully with your lender on this matter and keep a record of all your communications. If you are suffering a loss of income as a result of the Covid-19 crisis you need to inform your lender of this and outline the circumstances in detail and provide as much supporting documentation as possible. You should subsequently keep your lender updated weekly on developments in your personal financial situation and any efforts you have taken to try to improve your situation. What you are endeavoring to do is demonstrate that you have taken all the reasonable steps open to you in what is an unprecedented situation and that you have engaged fully with your lender. At the moment many businesses are still struggling to come to terms with the current situation,
However given the Government's plea for forbearance and the stance it has taken to date, it is to be hoped that your lender will react in a positive and constructive manner to this approach.
While the current Covid-19 crisis has had a wide-reaching impact the Government and local authorities have acted swiftly to mitigate its impact. However, the key starting point for any solution as highlighted in the queries above is early and open dialogue which enables people to work on solutions. WPM has continued to maintain services to all clients throughout the crisis as the company realises how important people’s homes are during the current lockdown.
For any property queries contact Winters Property Management on 091 771898 or [email protected].