When the government started to outline its plans for protecting tenants during the pandemic, Lucy Hobson, Assistant Account Manager at Thornley Groves, ensured she was up to date on the latest legislation and what solutions were available to help all parties in the event of any rental arrears - from having a simple conversation to putting a strong Rent Protection Insurance policy in place.
Before starting any communications with tenants and landlords, make sure that you're as up to date as possible on the latest legislation. Many letting agents see it as their responsibility to carry this burden for their landlords, and it will be easier to have conversations with tenants if you're aware of all the possible permutations of new laws, and how they may have an impact on rental payments or arrears.
"With the Coronavirus Act, when this was first pushed out, I personally read through all the specifics about property in there," says Lucy. "I felt that I needed to be fully versed on every detail so that I could say to tenants 'this is actually the legislation and this is what we can do for you'."
Communicating with tenants, and with landlords, can help to avoid many of the pitfalls down the road - especially as no two tenancies are alike, says Lucy. "Everyone's got a different situation, a different story, particularly with my role in accounts."
When the government first started to mention "payment holidays", some tenants took this at face value, without fully grasping the conditions of the government measures. "Some tenants automatically assumed that they would qualify for a rent holiday, regardless of their situation," says Lucy. "We quickly countered that by asking how we could help, and understanding their situation. We had a really good support network in the office to deal with these queries and educate tenants on some of the basic rules."
With notice periods of six months and the evictions ban, having a frank conversation with tenants to explain the benefits to them of moving out can ensure that all parties reach a fair resolution. "In some instances, we can help tenants to understand that the best case scenario is to leave before the arrears keep racking it up, rather than remaining in the property for the full notice period."
Working with tenants to understand their circumstances may involve a bit of detective work, to prove their financial situation. "We dig really deep to make sure we fully understand what our tenants are going through," says Lucy. "My background is in debt collection. I've got those fact-finding skills to uncover the full details of the situation, so we can then make a fully informed decision on where to go from there."
The next step, if your tenants aren't able to pay their rent upfront, is to set out repayment plans. "There are a small number of tenancies in a repayment plan with us," says Lucy. "Luckily these don't cover months of arrears. We realised right from the beginning that we need to get our landlords as much of the money owed to them as possible, and the tenants need to understand that they still need to pay because the government are funding a lot of people's incomes."
If a repayment plan can't be set out, that's where a comprehensive Rent Protection policy can help. "We speak about Rent Protection Insurance constantly when we're letting properties," says Lucy. "It's easy to talk to landlords who've had a bad tenancy that they don't have a policy on; we say to get it on your next one. We're even doing a back book exercise, checking all the tenancies to suggest this service, and we're going to send out an email as well."
When speaking to your landlords, you can emphasise the value of the policy, by breaking down the cost benefits. "A court fee is £355 currently - or you pay £30 a month and you've got this extra protection. Same for legal expense insurance. Legal expenses can cost £50,000 plus - so for 300 quid for the year, it's nothing."
If it gets to the point where a claim needs to be made on the insurance, the claims process can be time-consuming for landlords - giving agents the chance to really emphasise the value they bring.
"One of the key selling points of insurance in our managed package is that we do it all for them," says Lucy. "If they have their own insurer, they're going to have to do it all by themselves, following the full procedure. The landlord may be busy, with no time to do that. So we're taking that stress from them."
The reliability of the cover, claims process and payment timetable are all important considerations when choosing your rent protection provider - as this can have an impact on your agency's image if the provider were unable to meet its commitments. "Technically, under our policy terms, it's us as the agent that's paying our landlords. If there are delays or you're not getting paid for the claims, we underwrote that we will pay them, so it would have a negative impact on us and our agency brand."
An automated claims process, such as Goodlord's, can not only cut down on admin, but ensure payments are made on time and quickly - keeping your landlords happy and income flowing into your agency. "We recently made a claim and the process only took just over two months from start to finish, with the first payment being received within one month of claim for rent."
Oh Goodlord Limited is an Appointed Representative of Goodlord Protect Limited for general insurance products and credit broking. Goodlord Protect Limited is directly authorised by the Financial Conduct Authority, registration number 836727. You can check this information on the Financial Services Register by visiting www.fca.org.uk/register or by telephoning 0800 111 6768 (Freephone) or 0300 500 8082 from the UK. The FCA is the independent watchdog that regulates financial services.