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How the Coronavirus lockdown is affecting both tenants and landlords

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How the Coronavirus lockdown is affecting both tenants and landlords

Last updated: April 17 2020
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  • How the Coronavirus lockdown is affecting both tenants and landlords

    The Coronavirus lockdown has hit the world economy in more ways than one and has caused an extreme amount of economic strain for countries around the world. Real estate is also struggling with problems of it’s own, calling in for an immediate intervention by governments. In India, with the lockdown being extended, tenants and landlords are caught up in a situation where both sides are being affected adversely.
    As offices have shut down and work from home has become the norm, there are many companies that have given their employees unpaid leaves informing them about their inability to pay for the next month or even more, depending upon the duration of the lockdown. The extended lockdown means no salaries for another month or more and a likely disruption in rental payments. The situation is becoming tricky for tenants as well as landlords.


    A tricky situation for tenants
    It goes without saying that tenants are already facing issues paying their rents on time as many of them have a tight monthly budget and with their salaries gone for the present month and the next one too, they will be finding it difficult to manage their expenses. Many of them live along with other roommates in posh societies near their workplaces, have high rental obligations, excess credit card bills and other expenses to be taken care of.

    Ananya Shenoy, a freelance content writer, shares, “We work on a freelance basis and though the assignments we get are well paying, we get paid only when we have work. As of now, lot of our assignments have been pulled back as the clients of the company we work for have put all external work on hold. Having said that, we have zero assignments this month and hence no income at all. We have a very tight monthly budget and now we will be struggling a bit to pay the rent which is due in a day.”

    While tenants like Shenoy are troubled by their inability to pay rent on time there are others who have much bigger obligations to take care of.

    Rupesh Sharma, an upcoming photographer, shares, “I have been living in Mumbai since almost a year and have recently been able to get some assignments. However, now with the lockdown in place, there are no assignments and the money saved won’t suffice. I have to send money to my native place every month apart from my share of house rent that is Rs. 10,000 a month. Then there are other expenses to be taken care of too. I had no choice but to request my family to do without the money for at least a month or more and they agreed to it. It is a somewhat difficult situation.”




    Landlords too are left in the lurch
    Rental issues have not left the landlords unaffected and many of them are finding themselves in an equally tricky situation. A majority of landlords, just like tenants, live on a tight monthly budget and hence cannot manage any form of break in their rental income. Many of them are senior citizens or those living off the rent and a month without rent means a month without groceries and a lot of unpaid bills like property tax, light bill etc.

    Digvijay Singh, an elderly landlord living in Panvel, shares, “Our sons are settled in foreign countries and we live in our younger son’s flat while the elder one’s flat has been given on rent. All our expenses are taken care of by the rent that we receive every month. Our tenant is a good person with a small family and he has been paying the rent on time. However, he spoke to us about a possible delay in the rent for this month as his company has put them on an unpaid leave for a month. We understand his situation and have also asked one of our sons to help us manage for a month but I am not sure if they would oblige as they have their own expenses. We have some money saved so we will try to help our tenant out as much as possible but then we don’t have much money left.”



    Is it right to ask landlords for a waiver of rent?
    Property consultants and owners associations around the city have a different take on the matter and believe that a rent waiver may not be a fair decision and would have a negative impact on the lives of many landlords.

    “We understand the current situation but would still assert that waiving the rent would not be possible for many landlords as their expenditures depend entirely on the rents as they have no other source of income,” says Santosh Jha, a property consultant in Kharghar.

    “Just like tenants, landlords too have obligations to fulfill and cannot waive rent in most of the cases” he adds.


    What can the government do to ease the predicament of tenants and landlords?
    Recently, Delhi’s Chief Minister, Arvind Kejriwal, had announced that landlords in Delhi should not force their migrant tenants for rent. The move received appreciation from all corners with even landlords agreeing to the see the gravity of the situation.

    Even Odisha’s CM, Navin Patnaik, had appealed to all landlords to waive off the rents or at least defer them for at least three months.

    Both Kejriwal and Patnaik had also made it clear that tenants who were unable to pay their rents should not be asked or forced to vacate the premises during the ongoing crisis. They had even warned of strict action against landlords who didn’t obey the directives.

    Kejriwal even took it a step further by promising payment of pending rents in cases where tenants would still find it difficult to pay once the crisis was over. His attempt to provide assurance to tenants in the state has further encouraged tenants from all across the country to seek such waiver from their respective state governments. However, none of the states have made any announcements or attempts till now.

    In Mumbai, there have been petitions going around in online communities wherein many tenants have been seeking deferment of rent from their landlords for a few months. There have been requests to the state government to pass such an order. However it isn’t likely to come into effect soon.

    “Given the fact that we are in a lockdown period which is likely to extend even more there cannot be an issue of a tenant being evicted out for the inability to pay rent as the government has strictly forbidden any such act. The problem would be more of a personal kind with both the tenant and the landlord being stuck in a situation where they have no immediate source of money, leading to trying situations,” explains Shelly Pandya, advocate High Court.

    The Indian government had announced relief packages for the people in general but nothing has been offered to those living on rented accommodations.

    "There has to be a waiver or deferment of rent from the government to help tenants while also assuring that landlords don’t get exploited while doing so," Pandya adds.
    Last edited April 14 2020, 03:20 PM.
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  • #2

    #2

    Re : How the Coronavirus lockdown is affecting both tenants and landlords

    Originally posted by Malvish View Post
    A tricky situation for tenants
    It goes without saying that tenants are already facing issues paying their rents on time as many of them have a tight monthly budget and with their salaries gone for the present month and the next one too, they will be finding it difficult to manage their expenses. Many of them live along with other roommates in posh societies near their workplaces, have high rental obligations, excess credit card bills and other expenses to be taken care of.
    Although tenants must be facing a problem this month or the next to take care of rental obligations, the situation may not be that bad for many as most of them do have some savings and helping hands. The issue may not be that big as projected but still, it is an issue. It will be an issue for those with no savings, no helping hands, other family obligations, ongoing loans etc.

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    • #3

      #3

      Re : How the Coronavirus lockdown is affecting both tenants and landlords

      Malvish You are right, apart from rental obligations many migrant tenants have obligations to be met at their hometowns, further increasing the pressure on them during the lockdown.
      Last edited April 17 2020, 10:37 AM. Reason: Typo

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