Today we tell you everything you need to know about how to avoid rent defaults and the measures you can take. We are living in uncertain times as a result of the coronavirus that has turned our lives upside down. This pandemic has paralyzed economic activity in Dubai, which has led to extreme measures from the government such as financial aid or the ban on evictions. These grants are designed to protect and financially support tenants.
This is because they include not only the most affected groups such as the self-employed but also all the people who cannot go out to work to exercise their activity as well as the unemployed and families or vulnerable people.
How To Avoid Rent Defaults During The Coronavirus?
In other words, the tenants are protected, at least temporarily, and for the duration of this situation. But, what about the owners? What can we do as tenants to prevent this situation? Keep reading and we will tell you how. In previous articles, we told you a series of tips and keys to kick out a delinquent tenant who did not pay the rent. Some of them are still in force, however, the situation has changed a bit since a month ago there was no prohibition that prevents owners from evicting a tenant.
At least for the moment, and it is assumed that if everything returns to normal.It is expected that the applicable extensions with respect to the moratoriums will return to their course after the time of the maximum extensions of 6 months in the case of being requested by those delinquent tenants.
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Once the deadlines for presentations and verification of tenants in a state of economic vulnerability have passed, the owners and owners must agree on how to act.
Measures Against Non-Payment Of Rent –
The first of all is to know what we should do, for this, the owners have several forms of protection.
- Consultation And Advice:- One of them is information and advice, and for this, from Renovalia Inmobiliaria we are at your entire disposal for any questions or queries in these difficult times. In this link we tell you how it affects the rental of homes in the coronavirus, we advise you to read everything so that you have a detailed vision and know how the situation is at the moment.
- Total Protection Of Defaults And Breakdowns: – Another form of protection is to take out rental insurance. Do not think of this type of insurance as an amount more to pay each month, it is actually an investment and a way to sleep more peacefully every night. This is because this insurance covers everything from the search and selection of the perfect tenant to the monitoring and verification of payments. And of course, it covers everything that has to do with repairs for damages and breakdowns, as well as making the pertinent legal claims and most importantly, paying the non-payment rent even if it has not paid for that Specific month. The payment of unpaid income from insurance is a very attractive option for many homeowners who rely on rent to live.
- Information Is Power – These two forms of protection are the most common. But there are more measures to defend ourselves and avoid unpaid rent in case the previous ones do not convince you, and this is the consultation of economic information from our tenants. Thinking that information is power and determining how the people to whom we have rented our properties can act can be a basic help when it comes to acting. For this, we must know what type of tenant we have in our apartment. How? Very easy, it is enough to check the delinquent files to know how the tenant’s financial situation is. Obviously, we refer to the past situation since it is very possible that the coronavirus has affected you fully and your current moment is different from the past.
However, that does not mean that the tenant has appeared for months in delinquent files, it means that they have no creditworthiness and are not reliable. For this reason, it is to be feared that this situation will repeat in the future, so you must be prepared.
The Delinquency Is Very High, And The Most Possible Is That It Increases
And more with the delinquency figures in hand. And it is that not only we say it in this article, the figures of non-payments guarantee that the delinquency is increasingly high. The main reason is the real estate bubble, and now with the arrival of the coronavirus and the paralysis of the economic and housing market, the situation is most likely to get complicated.
In fact, the estimates of the IMF, the ECB, and other entities is that the economic fall in GDP will be brutal, a decrease in GDP of 8% is calculated in 2020, which will lead to an increase in unemployment up to figures from the 2011 crisis, in around 21%.
In other words, people will have less money and will not be able to meet their payments, which will increase their delinquencies, already high. Therefore, it is not surprising to consult the information in delinquency files such as ASNEF, RAI, or ExperianBadexcug. So we can know if the tenant is delinquent or not. The consultation in this type of file of defaulters is a preventive tool against the rent since relevant information appears about the tenant in recent years.
In fact, it is an option used in commercial operations since it reflects the economic evolution of people and provides us the details of creditors.