Tenant asks for rent reduction

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    Tenant asks for rent reduction

    I expect I won't be the first in this situation.

    Couple on SPT been in over 2 years. Decent, reliable rent paying young professionals. One who works in high end hospitality has been laid off indefinitely and is asking for rent reduction during this strange situation. Tenant is to apply to gov for her 80% - not clear when that is to be paid.

    Rent is £775pcm what reduction (if any) would you make?



    Freedom at the point of zero............

    #2
    Maybe a deferral instead reduction? Presumably they still have some sort of salary coming in this month? Could you afford to defer 25% for 3 months?

    Comment


      #3
      There's a lot of confusion about furlough pay, and it's worrying people are still wrong about it.
      The people who claim furlough pay are employers, not the employees themselves.

      The intention is to stop businesses laying off workers, so your tenant should be speaking to their employer and asking them to apply for furlough support and not to lay them off.
      If they've had their employment terminated, the employer will have to re-employ them to qualify for support.

      The only thing an ex employee can claim is benefits, unless they were self employed.
      When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
      Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

      Comment


        #4
        jpkeates Agree - most businesses in our area are continuing to pay furlough workers 100% salary. Ask the tenant to provide proof that at least one of their salaries has been reduced and if they do ask them to pay as much rent as they can each rent day and the situation will be reviewed in 3 months and at some point in the future a payment plan agreed for paying the arrears.

        Comment


          #5
          Offer a rent holiday - with rent deferred until after the crisis. At this point you can decide whether to set up a payment plan for the deferred rent or to write some or all of it off depending on your & their circumstances.

          Comment


            #6
            The problem with 100% rent holidays is that for most people the additional repayment later simply won't be possible.

            If the tenant is self employed, I can see the logic of waiting until June to be paid the rent for April, May and June, because self employed people will get three month's worth of their 80% in June.

            It might be that the landlord has to be realistic with how much of the three month's rent the tenant can realistically afford to pay in June - and a lot will depend on the state of the world at that point.

            Otherwise, anyone with a rent holiday is simply running up debt and there comes a point where the rational course of action for the tenant will be to move and do a runner rather than address the unrealistic chance of ever paying the debt off.

            Lots of people can barely afford to pay 1 lot of rent a month, the idea that they'll pay 1.5 times or double is just unrealistic.
            When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
            Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

            Comment


              #7
              The government guidance for landlords and tenants includes this advice for tenants:
              "Local authorities can provide support for tenants to stay in their homes. If you are experiencing financial hardship, you may be able to access new funding; we have already made £500m available to fund households experiencing financial hardship and are determined to take action to support people in need."

              https://assets.publishing.service.go...e_PRS_v4.2.pdf
              When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
              Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

              Comment


                #8
                Thanks guys.

                Snorkerz - I am agent for the owner who lives abroard. Apartment is owned outright so it depends if they are willing to take a cut in income.

                JPK and Cymro123 -That is most useful information so have asked T to go back to employer and provide details to me of what they say. Yes, I had mis-understood the idea behind 'furlough'.

                jpucng62 - I don't like the idea of rent holiday. Allowing people to run up a big debt will not help IMO.

                I happen to know that Ts are saving to buy a house so there is money there but I suppose they want to ring fence that - understandable.

                I'll come back when I get a reply one the employers stance.



                Freedom at the point of zero............

                Comment


                  #9
                  If they have savings then they can pay the rent. I wouldn't be understanding with tenants who say they can't pay because they're saving to buy their own place.

                  Comment


                    #10
                    I agree, this isn't an expected occurrence and people's plans need to change to deal with them.
                    The tenant is basically asking you to lend them some money so they don't have to use their own.
                    When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                    Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                    Comment


                      #11
                      Rent holiday does not have to be 100% of rent - if income is reduced you could offer to accept reduced rent now with the balance payable in the future. Govt support like LHA and furlough pay may take a little while to get to people. Be flexible so that your tenants can manage their bills sensibly. Hopefully LLs and tenants will be building supportive relationships through this crisis which will benefit us all on the other side.

                      Good luck

                      Comment

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