Payment Break

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    Payment Break

    I have a great long-term tenant who, along with her husband and daughter has been with me for nearly 5 years. Unfortunately the husband has done the dirty and left leaving her with nothing but debts. Her finances are in a mess and she has said she may need to move in with family whilst she sorts herself out. I am considering allowig her to live there rent free for 2 or 3 months to help out. I'd be happy to take the loss as I think she'll stay for years if she can just get back on her feet.

    Are there any issues with doing this? She'll be applying for (but isn't yet in receipt of) housing benefit. Are ther eany complications regards not getting market rent when declaring my tax return? I'm seeing this just like the void I would have if she moved out but am aware things are always as simple as they ought to be.

    Any advice greatfully received.

    #2
    You'll paint yourself as a pussy and never get rent on time again.

    Issue a s21 and in due course a possession application. Tenant will be able to use these to convince council to pay you instead.

    Comment


      #3
      JK0 - I appreciate the view point but honestly don't believe this will happen. She has always kept the house in immaculate condition and never missed or been late for a payment. One of life's good people who we've known for far longer than she's been a tenant.

      Aside from the risk of being pussied are there any complications in doing this?

      Comment


        #4
        Its very charitable of you Ollie, certainly no implications tax wise, they couldnt care if you rented the place out for £10.

        Rather than saying rent free, I'd prefer rent deffered to be used as this would seem more business like and less charitable/free money but with a view to you writting it of in the future as you already intend to.

        Are you holding a damage deposit? If so, maybe release this to help if she keeps the house in such good order over such a long period it doesnt seem necessary to withold this money maybe?
        "I'm afraid I didn't do enough background checks apart from checking her identity on Facebook" - ANON

        What I say is based on my own experience and research - Please don't take as gospel without first checking the gospel yourself.

        Comment


          #5
          Sounds a pretty bad idea to me if your point is to run a business.

          As a charitable venture sounds OK - even worthy. But I suspect you will regret it.

          The basic rule is don't let to friends., and this falls into a similar category.

          Rather tell her that it does need to be paid but you will defer payments for a month or two. Where is the capital going to come from? If you tell her the rent is zero for 2 months, and you don't receive rent in month 3 either you won't be able to serve a S8 most probably either.

          Comment


            #6
            I think it’s very noble of you to do what you’re doing and as long as you’re confident that she won’t take advantage of you then there’s no reason why you shouldn’t help a friend out.

            I bought a property from my friend of 35 years who got himself into financial trouble and Let the house back to him for a slightly discounted rate to help him. No skin off my nose; I have a tenant for life.

            No no issues tax wise but just be careful and make sure you trust them.

            Comment


              #7
              Don't do rent free. Just do deferred.

              When her HB claim gets processed the first payment may well be 2 or 3 months worth - that needs to go to you.

              Comment


                #8
                Don't agree to any payment break. Issue s21 & s8s as they become valid (probably s8g10 initially then 10&11 then 8,10&11) - if feeling very charitable explain if they do all they can to get benefit etc & keep you informed you are minded not to proceed to court. Agreeing to a payment break could be taken / presented in court as agreeing to a different type of tenancy or a new tenancy: You don;t want that complication.

                Assuming they are joint tenants, just because he's gone doesn't mean he's no longer liable for the rent (ALL the rent and arrears). If that is the case ensure s21s & s8s are properly served at the property for both of them and also for him at any other address you can find. In your shoes I'd pursue just him (little toad with a trump-like small **lly...) MCOL small-claims: If only to make him unhappy.

                Artful: (Male)
                I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

                Comment


                  #9
                  If she gets back with her ex and he moves back in, or she moves someone else in the HB office are likely to demand back from you any rent for that period as she will be committing fraud.

                  Comment


                    #10
                    Thanks everyone - all good points, she's working and unlikely to get anything other than a small amount of housing benefit. She is extremely proud and cannot bear the thought of not clearing the debts her ex has dumped on her which is what's forcing her to consider her options.

                    Not sure what I'll do yet but at least I'll be going into it eyes wide open now.

                    Comment


                      #11
                      You have a good tenant and if it were me I'd be looking for ways to keep her rather than evict her. Might be worth having a chat and find out how much she can afford now and in the long-term. If she can afford it on her own once the debts are cleared possibly offer her a reduced rent for a year equivalent to the 2 months you're prepared to lose? If she's doing her best to pay off his debts & is prepared to move n with her mother it seems unlikely she'd do the dirty to you.

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