Rent Reduction

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    Rent Reduction

    I just received an email from the letting agent of my old family home saying my tenant has asked for a rent reduction due to unemployment. My tenant is nearly a year into a two year fixed tenancy.

    Anyone got any advice?

    edit: I would add that this place is quite tricky to let due to its size and location, and I have had a number of long voids over the years.
    To save them chiming in, JPKeates, Theartfullodger, Boletus, Mindthegap, Macromia, Holy Cow & Ted.E.Bear think the opposite of me on almost every subject.

    #2
    You dont have to reduce rent of course. Obviously if the tenant cannot afford the rent and you incur a loss that you cant recover, its not helpful either.

    Options:

    1) Do nothing
    2) agree to a reduction if you want to keep the tenant and think he can pay the reduced rent
    3) agree to release him from the contract if he surrenders the tenancy
    All views posted reflect my personal opinion only and do not constitute professional advice which I am not qualified or knowledgeable enough to provide.

    Comment


      #3
      Is he going to be working again soon?

      Amongst other things, I would see if the tenant would create a new fixed term for 6 months, with 3 months at the reduced rent(if this is a reasonable amount), and then 3 months at the regular rent. If it goes into a periodic tenancy, then the higher rate applies.

      With him giving a defined amount of access during the last 3 months for viewings.
      Allow tenants to protect their own deposits. I want free money when they do it wrong

      Comment


        #4
        Thanks guys. All good ideas.

        Anyone else?
        To save them chiming in, JPKeates, Theartfullodger, Boletus, Mindthegap, Macromia, Holy Cow & Ted.E.Bear think the opposite of me on almost every subject.

        Comment


          #5
          There is no need to reduce the rent as such. What you can do is to agree to accept x pounds per month on account of rent until the tenant is employed again, with a provision as to how the shortfall is to be made up.

          Comment


            #6
            Thanks Lawcruncher.

            That sounds very sensible. I have emailed my agent to suggest T pays three quarters of the rent until he finds a new job. Then he will gradually make up the arrears.
            To save them chiming in, JPKeates, Theartfullodger, Boletus, Mindthegap, Macromia, Holy Cow & Ted.E.Bear think the opposite of me on almost every subject.

            Comment


              #7
              "until he finds a job" is infinite - a time limit would be more motivational to the tenant and advisable.

              In current economic times with no employment chances are low. In addition benefits are paying far less to tenants for housing. The tenant has notified you that he can no longer afford the premises, it would be wise to conciser issuing getting a signed Section 21 notice whilst in negotiation. So you can act fast if tenant is unable to improve their circumstances.

              Comment


                #8
                Originally posted by YesAdam View Post
                "until he finds a job" is infinite - a time limit would be more motivational to the tenant and advisable.
                Perhaps until he finds a job or until a certain date, whichever is the earlier.

                Comment


                  #9
                  Thanks guys.

                  Well the tenancy ends early in 2014, so if he hasn't caught up by then he will be kicked out. My agent is a stickler for getting the rent (and her commission) and took my previous tenant to court after he left, when I was willing to let him off!
                  To save them chiming in, JPKeates, Theartfullodger, Boletus, Mindthegap, Macromia, Holy Cow & Ted.E.Bear think the opposite of me on almost every subject.

                  Comment

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