The effects of the coronavirus pandemic are not only affecting tenants, but also many landlords who are dependent on regular payments. But what can landlords do if rent defaults lead to financial bottlenecks?
When the rent stops coming
Most residential property in Germany is owned by private landlords. They in particular are often dependent on rental income to cover their own obligations such as loans or maintenance costs. If these payments are not made, things can quickly become critical. The government has passed a regulation that allows loans to be deferred - but only for contracts concluded before 8 March 2020.
Prevention: communication instead of confrontation
An open dialogue between tenant and landlord can avoid many problems. Understanding and transparency are more important than ever during the crisis. Both sides should explain their situation clearly in order to find solutions together. Some landlords agree to temporary instalment payments, while others look for alternative solutions, such as the temporary use of rent reserves.
Political initiatives under discussion
In order to relieve the pressure on tenants and landlords, the introduction of a state fund is being considered. This could partially cushion rent losses and thus relieve both tenants and protect landlords from major financial difficulties. It is still unclear how these measures are to be implemented in practice, but the discussion shows how urgent the issue is.
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