PRS chief Sean Hooker takes a thoughtful look at how the crisis will affect our society and the property industry that is its bricks-and-mortar backbone.

“May you live in interesting times” is one of the most common English expressions that gets wheeled out at during periods of major turmoil and tragedy.

It is was also known as the “Chinese Curse” although this once common title has rightly faded from modern usage as there is no evidence of any historic connection to China.

Such doubts have not stopped the equally false labelling of COVID-19 as the “Chinese Virus” a phrase now frequently uttered and tweeted by the US President.

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This use of language shows the human desire to attribute things that they think as being out of their control and to find something to blame.

Coping mechanism

However wrong, this is one of the key coping mechanisms we employ in the face of danger and is reflected in some responses to the disease sweeping the world now.

It is right to reflect on the here and now and understand and cope with what is going on.

As with any tragic event, the human mind goes through a series of emotional stages, which whilst are well documented are difficult to measure and control, however they are sufficiently common to identify and therefore attempt to deal with.  

Depending on what model is used, we typically move through between five and seven stages in dealing with trauma, however the first reaction always appears to be a sense of shock and denial. This is followed by helplessness, moves through to anger and blame, desperate attempts to prevent the inevitable, despair, acceptance of the reality whilst finding realistic solutions to finally moving on and surviving the event.

Denial stage

It could be argued that many people are still in denial, however this will not last forever, and the longer the situation goes on the more frustration and resentment will rise. Personal and business lives will be affected, and the emotions will run high.

Complex cases

At the Property Redress Scheme we deal with these complex cases every day, however the nature of this crisis has never been seen before and therefore, it is worth remembering that prevention is better than cure and complaints are always best dealt with by the people involved and at the earliest possible opportunity.

For property agents, they are in the unenviable position of being in the middle and they are obliged to act in the best interest of both parties.

These obligations continue even if the agent is not receiving their commission, unless there are provisions in place under their contract.

Remember the landlord is your consumer and protected under consumer protection law so any clauses will need to fair and not take advantage of the client.

Tenants also can expect to continue receive the service and whilst some agents wrongly believe that since the Tenants’ Fees Ban that the tenant is not their customer, the agent is contracted to fulfil the landlord’s obligations and has a duty of care to the tenant.

All this will make life difficult in the circumstances and with some tenants not being able to pay all or some of their rent and with many letting agents calculating their commissions as a percentage of the monthly rent, even if they point out to landlord that contractually they are still liable for the payment regardless of arrears, many landlords themselves will not have the cash spare to pay the agents fees for at least a period of time.

Vicious circle

This vicious circle may well become common place as the restrictions kick into place and letting agents may have to continue to manage properties, without an income.

Life will be difficult for some time and challenging decisions will need to be made. With evictions stopped and restrictions being put on re-letting properties under lockdown, the agent has little choice but to roll up their sleeves and try and continue servicing their clients.

Even if they can get out of their contracts, how many will do this; it does not take a genius to work out that a landlord left high and dry by their agent are not going to go back to them after this has all passed.

This tricky situation will play out over the next weeks and months as the effects of the necessary measures start to hit.

Each circumstance will be different and while a majority of agents will be able to sustain themselves over the short term, if the period of the containment is extended or even increased the pressures may have devastating for the whole sector.

What can agents do?

There are things all agents can do to help mitigate the adverse effects the clampdown:

  • First get your head out of the sand, this is happening and is in place to save lives.

    Next get yourself a plan. Speak to all your landlords and if possible as many of your tenants as possible.
  • Manage their expectations and look for the possible not for the barriers.
  • Do a risk assessment on each and every case and remember one size that does not fit all.
  • Concentrate on the vulnerable and highest risk cases but do not ignore the rest.
  • Reassurance to your clients and maintaining confidence in you is essential to build the trust you will need to get through this.
  • Keep compliant and stick to your processes. When this is all over, the authorities will not see this situation as an excuse for you not fulfilling your legal obligations.
  • Overall remain calm and expend your energy on what you can do and not on what you cannot control. You will be faced with anger and blame often aimed at you, try not to take it personally and do not react. Overall remain professional and approachable. 

The Property Redress Scheme expects the number of and intensity of complaints to increase and this is part of the anger and blame stage of such an event, but we are working to provide guidance and support to all sides of the sector to help during the crisis.

We must all actively work together for solutions in order to come out of this as best as we can.    

Read more guidance about the Coronavirus pandemic.

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