COVID-19: Temporary Relief for Landlords

Following a meeting with the Government, the five main retail banks in Ireland have agreed to adopt measures to assist customers facing financial difficulties as a result of the current crisis.

Payment Breaks

Landlords will now be given a three-month moratorium on their mortgage repayments where their income has been affected by restrictions put in place as a result of the COVID-19 pandemic, which will be offered to those with buy-to-let mortgages whose tenants have been impacted by COVID-19.

The measures adopted by the banks build upon the Government response and the European Central Bank’s monetary and regulatory policy measures to deliver real effective support to individuals, SMEs and companies during this time. Landlords or any homeowner wishing to avail of this payment break are urged to contact their respective bank as soon as possible who will be able to advise of the supports being put in place.

Ongoing Reviews

The payment break of up to three months will be followed by ongoing reviews and may be extended based on the result of these reviews and depending on the scale and extent of the situation. The process is being looked at to ensure that Landlords and other homeowners can seek to avail of payment breaks by way of a process that is straightforward with applications to be approved quickly.

In particular, Bank of Ireland and Ulster Bank have agreed to offer up to three months of payment breaks or other flexible arrangements to affected customers, with AIB offering up to six months’ relief to borrowers. Permanent TSB and KBC Bank Ireland have stated that they had a range of options for borrowers affected by the COVID-19 crisis. However, it is yet to be determined if interest on mortgages will continue to accrue during these break periods and it will be necessary to consult with the Landlord’s respective bank.

Non-Bank Lenders Offer Support to Borrowers

Non-bank mortgage lenders and credit servicing firms have also recently confirmed that they will adopt these measures agreed by the country’s five main banks. The Banking and Payments Federation of Ireland, to whom the non-bank mortgage lenders are a member, stated that they would offer the same three-month mortgage payment break for those impacted by the current crisis.

Measures Adopted to Protect a Borrower’s Credit Record

The banks are further working on measures to ensure that those who seek to avail of a mortgage payment break will not be adversely affected when it come to the Central Credit Register. Banks are looking to avoid this and are meeting with the Central Bank of Ireland to urgently achieve a solution, to ensure that any application for a payment break during this time and further reviews will not adversely impact the customer’s credit record, and the banks reporting of these facilities. However, banks have stated that this will be dependent on the stance of regulators and will depend on the outcome of talks with the Central Bank of Ireland.

Landlords to Pay It Forward

The government has also placed an expectation on Landlords who have been afforded this flexibility by the banks to pass that flexibility on to their tenants who are facing difficulty in meeting rental payments. Further measures have been introduced by the Minister for Housing Eoghan Murphy to ensure that Landlords, in particular Landlords with buy-to-let mortgages, cannot and should not evict tenants at this time, and legislative amendments are to be put in place in order to prevent Landlords from doing so. Tenants are also encouraged to engage with their landlords as quickly as possible if they are facing difficulties.

However amidst the crisis, some of the country’s largest landlords and institutional property investors have come together to state that support will be given to tenants who are impacted by the disruption caused by the current pandemic through measures such as deferral of rent payments and payment plans.

How we can help

If you have any queries or concerns, or would like to discuss the above in further detail, please feel free to contact Siobhán Whelan in our Real Estate Department on swhelan@bhsm.ie / +353 (0)1 440 8339.

This article is for general information purposes.  Legal advice must be obtained for individual circumstances.  Whilst every effort has been made to ensure the accuracy of this article, no liability is accepted by the author for any inaccuracies.