What happens if a tenant can’t pay rent during the Covid-19 crisis?

Property Clinic: A temporary rent reduction or pause in payments may be options

If a tenant can't pay rent due to being laid off and the landlord doesn't have a mortgage on the rental property what should the procedure be? Can the tenant apply to go on the social housing list and then qualify for a Housing Assistance Payment (Hap)? It seems a very complex process for a short-term (hopefully) situation and means that the landlord takes a hit for the entire rent shortfall period. This applies to anyone getting a mortgage break as well. The landlord will still be liable for the shortfall. Can the Hap process be speeded up in this crisis?

In addition to saving lives, Government policy thus far has been to try to minimise the impact of the Covid-19 crisis on the general population and on the economy. As a result, an array of new supports has been introduced for people who have been laid off, which seek to minimise the financial impact over the coming three months. In some instances, businesses are also being encouraged to take people back on their books with Government paying up to 70 per cent of the wage.

The focus is on maintaining people’s incomes so maybe your tenant fits into this category. The Minister for Housing has indicated that the Government is currently looking at additional supports for tenants which may see changes to Hap and other supports in the short term. If you do not have a mortgage and are not reliant on the property for all your income you may be in a position to agree to a temporary reduction or pause in payments. However, any agreement should be confirmed in writing by both parties to prevent disputes arising in the future.

Enda McGuane is a chartered planning and development surveyor and managing director of Winters Property Management in Galway. He is a member of the Society of Chartered Surveyors Ireland, scsi.ie

My ‘lender’ has refused to follow the five main banks’ position in relation to mortgage breaks. Is there anyway of encouraging them to do this?

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 communications.

If you are suffering a loss of income as a result of the Covid-19 crisis you need to inform your lender, outlining the circumstances in detail and providing as much supporting documentation as possible. You should subsequently keep them updated weekly on your personal financial situation and any efforts you have taken to try and improve it.

What you are endeavouring 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 crisis, however given the Government’s plea for forbearance and the stance they have taken to date it is to be hoped that your lender will react in a positive and constructive manner to this approach.

My new tenant moved in on January 7th, 2020, she is claiming housing benefit and receives two work pensions. As her refusal to pay has nothing to do with the virus situation is she still protected by the three-month eviction ban?

Good question. Unfortunately, there will always be people who take advantage of bad situations. Opportunists must be taken to task on matters like this. The Government and Minister in question introduced the emergency legislation for genuine situations. It does not cover tenant(s) like this. There is no problem dealing with this tenant as you would in normal circumstances.

The reason for this is once you have issued the appropriate notices for rent arrears and the tenant goes into overholding, you may apply for an Residential Tenancies Board case. By the time this is all done, and taking into account your obligations on the notices and how long it will take for the RTB to process your case and give you an adjudication date, I would be confident that the three months will have passed.

You should also remember that the RTB will take a number of weeks for the Adjudicators Report and Determination Order to issue, so I have no doubt at this stage the emergency legislation will no longer be in place and the three months will have come and gone, and this tenant can be dealt with as normal like any other individual not paying their rent.

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