Advice on new tenancy

[AnnaJJJ]

I am just about to rent a flat to a family. The tenants have paid a holding deposit but we've not yet signed contracts. After paying the holding deposit the tenants have now advised that they may be laid off with the 80% furlough agreement. There is only one salary in the family. They've approached me to ask if I can be flexible regarding a reduction in payment should this occur. Being a new landlady I am unsure what to make of this. Any advice welcomed and appreciated.

[ash72]

If you don't want or need the money take them on, as it's most likely they will stop paying you the rent. You could ask for a 6 month advanced payment on the rent upfront, or alternatively hand back the deposit and keep the property vacant until the crisis is over.

[boletus]

Home owning guarantors (plural)?

[jpkeates]

They shouldn't be moving in now anyway.
I'd return the deposit rather than renting to someone who can't afford to pay the rent.

[nbhamilt]

If you don't want or need the money take them on, as it's most likely they will stop paying you the rent. You could ask for a 6 month advanced payment on the rent upfront, or alternatively hand back the deposit and keep the property vacant until the crisis is over.

Are you allowed to charge 6 months rent up front? doesn't that come under additional fees thing over and above 5 week deposit and 1 month rent?

[jpkeates]

You can ask for the rent to be paid in advance, but it has to be the rent, not an extra deposit.
So you can't ask for six months payment and then demand a rent payment in month 2.

Theoretically the five month's deposit paid in advance meets the definition of a tenancy deposit, but it's a conventional commercial practice.

[AnnaJJJ]

Thanks for all your responses.

I have checked this morning and unfortunately they don't have a guarantor, and they don't have enough money to pay more than one months deposit plus the first months rent up front.

Currently the tenant hasn't been laid off, but has just been advised that if things get worse it could be a possibility. The employed tenant has a good salary compared to the rent, so if they were laid off with the government furlough agreement I should expect a minimum 80% of rent from them right?

Equally am I liable if I return their holding deposit as they have given notice on their current home and have nowhere to go?

If I can get 80% rent until things improve then at least I can pay the flat service charges and my basic running costs. If I reject them I could get nothing for many months but still have these outgoings.


Any further advice appreciated. Thank you!

[Snorkerz]

Have you seen these 'Cant Pay, We'll take it away' programmes? Funny how people say they can't pay but suddenly find a way once their BMW is clamped! Maybe your tenant will miraculously find a guarantor once their new home is at risk.

As your proposed tenant has a 'good' salary, you might be prepared to defer 20% of their rent for x months (reviewable) with the balance to be paid off over the balance of the fixed term. I'd suggest an initial 3 month deal as the situation will be very different (clearer?) by then.

However, I would warn them (in advance) that if they want to do this, with each deferral, they will get a section 8 notice and, should they default on re-paying when the time comes then you will be in a position to recover your property.