One of the key issues South Africa is now facing due to COVID-19 is similar to other countries – how can the country balance the rights of tenants who have temporarily lost income and may not be able to afford their rent with the rights of landlords to collect rent for their properties?
It is a difficult conundrum; however, looking at what other countries, like Australia, have implemented might suggest a way forward. In Australia, the basic premise is that if the tenant has had a reduction in income due to COVID-19, landlords and tenants need to negotiate a temporary rental reduction until the crisis is over. In practice, this means establishing the loss of income of the tenant due to COVID-19 and then reducing rent by the equivalent percentage amount for a period of time.
In theory, this sounds simple; however, the complexity lies in the calculation and proof to ensure both parties can agree in good faith as to the new rental amount. To overcome this, Trustlink, with its partner, Vidual, has just released the South African Rent Assessment Manager (RAM).
To use RAM, the tenant simply has to upload the last three or six months of their bank statements. RAM then confirms their income pre- and post-COVID-19, calculates the percentage loss due to COVID-19 and provides an estimated rental reduction that can then be provided to the landlord.
Trustlink Deon Tromp says: "This is a very difficult time for everyone and we understand a lot of people are concerned about the impact of COVID-19 on their income and how this might affect their home. Although we are still waiting on government direction, through our partnership with Vidual and RAM, we can provide a fair, technology-based solution to assist both tenants and landlords to negotiate a fair outcome during this time."
Edward Sedgley, CEO of Vidual, says: "Through its partnership with Trustlink in South Africa, Vidual typically provides electronic income and expense verification solutions to financial institutions. However, in both Australia and South Africa, we have seen the dilemma facing the rental market and developed RAM as a tool to take away the guesswork and allow both renters and landlords the ability to negotiate a fair, temporary rental amount based on data collected from bank statements."
Trustlink moves, validates and translates data
Trustlink enables the secure and reliable exchange of information, including payment instructions, corporate and customer information and operational data.
By building long-term professional relationships with our customers, we develop an understanding of their environment, challenges and requirements in order to assist them to meet their demands. The nature of our products and solutions means they make up critical components of our customers' business practices and infrastructure, firmly entrenching us as a value-added service provider.
With the solution/s we offer, the results are immediate, and your organisation will be able to:
- Validate IDs;
- Conduct PEP/AML/sanctions screening;
- Verify bank account statements;
- Confirm income;
- Provide a seamless online experience;
- Speed up your digital on-boarding process;
- Ensure KYC/FIC compliance;
- Reduce/require zero human interaction; and
- Track/audit and record all client interactions digitally.
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Vidual
Vidual provides solutions to South Africa banks and other lenders to quickly and efficiently determine the income or loan potential of new customer applications in real time. Through this expertise, Vidual has developed RAM and released it to market to hopefully assist both renters and landlords during this difficult time.