Our members forum is a fantastic place to seek advice and share experiences with other landlords. In our Forum Spotlight this month, we take a look at a recent question a landlord posted on our Forum about how to develop a suitable rent repayment plan with his tenant.
The landlord had agreed to defer half of the tenant’s rent in April, May and June because their finances had taken a hit due to coronavirus. Now that the tenant can afford to pay the full rent again, the landlord asked for advice on our forum about how best to agree a mutually acceptable rent repayment plan.
The responses
The first landlord to respond on the thread advised that it is important the landlord approaches this issue sensitively. A good start would be for the landlord to establish the financial situation of the tenant, to work out what they can afford to pay.
An adviser then joined in the conversation. They concurred with the previous poster, and also suggested the landlord read the NRLA’s guidance on managing rent arrears.
The detailed guidance, backed by several organisations across the housing industry, takes a closer look at how landlords and tenants are able to work together to reach an affordable payment plan.
One of the first steps is for the tenant to make a budget. There is advice on how to do this in the guidance, but the budget should take into consideration the monthly rent and other outgoings.
Once this has been established, the tenant can agree an amount they can afford to pay off, on top of paying the rent for that month.
Landlords should aim to strike a balance between not asking the tenants to repay amounts that would cause them to struggle – defeating the object of deferring it in the first place – while ensuring the amount is not so low it will take years and years to pay off.
The repayment plan should be signed by the tenant and the landlord, and should include the amount that will be paid back and the timescales for this, for example whether payments will be weekly or monthly. More information about rent repayment plans can be read in the NRLA’s guide on this topic, and members can also watch a recent video on managing rent arrears and creating affordable rent repayment plans below.