Landlords and tenants alike suffer Covid-19 cash crunch

With millions of South Africans temporarily or permanently out of work due to the national lockdown to limit the spread of the coronavirus which causes Covid-19, only 37% of the country’s tenants have been able to pay rent in full, while 22% could not afford to pay at all.

According to the FlowFindings survey, conducted this month by residential rental platform Flow, both the high-end market – rentals above R12,000 a month – and the low-end market – R2,000 to R3,999 a month – were affected.

The survey of 22 questions was sent to more than 80,000 registered tenants and showed 78.8% of tenants’ income had been affected by the lockdown. The survey’s respondents said they had already applied or intended to apply for financial assistance to pay their bills.

Some landlords had accommodated their renters with reduced or waived rent – 35%. According to the survey, 44% of individual landlords seemed to be more forgiving.

Gert Swart, who owns and rents out four properties in Centurion, was one of them. He agreed that his tenants would not have to pay full rent should they not be able to.

Swart said he had lost around R30,000 in rental income, but hoped his tenants would pay it all back once their finances improved.

“Unfortunately, this is my income. But I must be human as well because I have good tenants.

“I told them they could pay me whenever they can. I hope it is not money lost and that they can pay me at a later stage.

“But if they can’t, I am definitely not going to put them out. I will give them six months or a year to try and pay it back.

“We are all affected. They have paid me in the past so I can’t be nasty,” he said.

Some tenants were not as fortunate.

Liam Ngobeni, who rents a flat in Pretoria, did not receive any relief, or a discount, despite having his salary reduced due to the lockdown.

“I think [relief] would help at this point because some of our salaries have been cut and we are relying on UIF [the Unemployment Insurance Fund] to supplement it.

“However, we have other bills on top of [rent]. Even if we pay the full rent, we still need water and electricity. It’s a bit hard to make ends meet.”

Managing director of Trafalgar Property Management Andrew Schaefer expects the rental market, under pressure even before the lockdown, to get worse.

“How do landlords plan ahead when tenants aren’t able to make payments if their income is affected?

“They won’t be able to catch up with their arrears any time soon, so we need to consider how this all clears through the system.

“We believe that rental credits are the only way forward,” he said.

– rorisangk@citizen.co.za

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