Landlords and Property Management Company Closure and Rescue Options
Changing regulations and costly licenses coupled with potential issues with tenants and property maintenance can create financial challenges for you as a landlord or your property management company. The market is increasingly challenging, and these extra financial burdens can leave you struggling to cover your liabilities. Speak to us for free, impartial, tailored advice, and we will help you understand your company’s options.
This guide offers tailored advice to help you address the financial pressures property management companies may encounter, providing the knowledge you need to make informed decisions about the future of your business.
Common financial challenges for property management companies
We can help advise on specific financial issues and challenges you could face as a landlord or the head of a property management company, including but not limited to:
- Rising costs and changing regulations
Managing property requires paying for utilities, cleaners, and maintenance contractors to keep those properties up to a standard for occupancy. Additionally, paying the appropriate taxes, insurance rates, and acquiring or renewing licenses to retain compliance adds to a landlord’s or property management company’s financial burden. Should your outgoings reach a point where it risks making the company insolvent, we can assess its situation and detail how best to move forward. - Issues with tenants
Tenants can typically cause multiple issues for landlords or property management companies. Late payments or defaulting completely on rent is common within the market. There is also the potential for damage to the property, resulting in additional costs to repair that damage. Speak to us if these issues have negatively impacted your company’s finances and potentially risk its future viability. - Maintaining and repairing properties
In addition to repairing damage caused by tenants, damages from external factors, such as weather or fire, or having to fix a flaw in the building’s design can be costly expenses. Even without these issues, properties need constant, sometimes expensive maintenance to keep them up to standard. Contact our initial advisers if the cost of managing or maintaining properties is putting financial strain on your company. - Bounce Back Loans (BBL)
The Bounce Back Loan Scheme was a vital lifeline for property management companies during the COVID-19 pandemic. However, many are now facing difficulties with repayment alongside other financial pressures. We can guide you through your repayment options and explain how these loans are managed in different insolvency scenarios, helping you find the best solution for your business.
How we can help rescue your property management company
Below are two formal insolvency procedures that can allow a property management company to continue trading while protected from creditor action:
- Repay your company debts in a payment plan via a Company Voluntary Arrangement (CVA)
A CVA is a formal payment plan between a company and its creditors that allows your company to repay its unsecured debts in instalments tailored to what it can afford monthly. When in place, all interest and charges are dropped and creditors in the arrangement cannot take further legal action. The procedure would allow you as a landlord or your property management company to continue trading, retaining all your business’s goodwill and reputation with customers. A CVA can last for up to five years, and once concluded, any remaining unsecured debt is written off.
More on a Company Voluntary Arrangement - Restructuring the company through administration
Administration is an insolvency procedure for companies. Entering the procedure, your company will be in a temporary state of protection by a moratorium that halts legal action from creditors in the payment plan, giving your company the breathing space to continue trading. We will act as administrator and our primary purpose is to rescue your company as a going concern, attempting to restructure and turn it into a leaner more profitable organisation. If rescuing the company isn’t a viable option, we will also look at the most appropriate exit strategies from administration, whether that be a potential sale of the business, assets, the whole company, or transitioning to an alternative insolvency procedure.
More on administration
How we can help close and liquidate your property management company
If your property management company is insolvent and creditor pressure is at such a level, you may be better off liquidating and closing your company, drawing a line under its operations, and writing off any unsecured debts.
- Close your property management company down via a Creditors Voluntary Liquidation (CVL)
A CVL is a formal liquidation procedure designed for insolvent companies. The process would see your property management company ceasing to trade and closing in an orderly and legally compliant manner. Your company’s assets will be realised and dissolved, once completed, any remaining unsecured debts within the company will be written off. If eligible, employees and directors can apply for statutory entitlements such as redundancy and holiday pay. If the company cannot afford to pay staff entitlements, claims can be made through the Redundancy Payment Services. - Close your property management company down and start again via a pre-pack liquidation
A pre-pack liquidation is a type of CVL where the sale of your company’s assets is arranged before liquidation, allowing business operations to continue seamlessly under the purchasing company. Your company’s name may be reused, and employees can transfer under TUPE. Contracts and essential agreements can also be included as part of a sale, ensuring minimal disruption to your business operations. This process eliminates the unsecured debts of your previous company, providing a fresh start free from previous unsecured liabilities.
More on pre-pack liquidation
Commercial finance for property management companies
If your company has an otherwise healthy cash flow, but a large, upcoming payment risks pushing you into a negative position, commercial finance could be a viable solution. There is a range of finance options that can potentially help cover a one-off expense or a gap in the company’s incoming payments. Speak to us for a more detailed breakdown of which commercial finance options would best fit your company.
More on commercial financeHow to get in touch with us: The next steps
If your property management company cannot pay its bills and could become insolvent, it’s essential that you seek advice and take appropriate action as soon as possible. Acting early increases the likelihood of achieving the best outcome and minimising potential damage.
Contact our initial advisers, who can advise you on your company’s solvent position and outline the options best suited to its circumstances.
- Speak with our initial advisers
Contact our team via phone or online chat. If we can help, we will arrange a free consultation with one of our consultants to discuss your situation in more depth. - Initial assessment
During the consultation, we will advise if an insolvency procedure is the most appropriate route forward or what alternative options are available. - Formally engage with Wilson Field
After your consultation, if there is an appropriate route forward, we will issue the relevant documentation for you to formally engage us.
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