"Rent Holiday" asked for by tenant

[jpkeates]

I'd be personally tempted to help the tenant.
This is going to be more and more common as times remain tough.

I'd suggest one or two month's "holiday" to help the tenant get back on their feet and then a period of lower rent, with the understanding that the arrears are to be paid back by the end of next year (or sometime).

Some years ago my building society agreed to a much lower mortgage payment for 6 months, which (along with a new credit card) just about saved my financial bacon.
Sometimes you just need a break to get back on top of things.

You might very well get your fingers burned, but at least the tenant is trying to be constructive, and hasn't just taken the option of not paying a month's rent.

[teerev]

An update on this situation.

I have just met with our letting agent and we agree that our tenant knows that we are good natured and reasonable and was trying it on by asking for three months "Rent Holiday", so we have agreed on the putting forward the following plan to her.

We will give our tenant a one month "Rent Holiday".

She will agree a repayment plan for this with our agent, we would be happy with something like £50.00 per month or give her a couple of months delay and then a larger sum to still repay the total within 12 months.

Our tenant agrees to instruct the Local Authority to pay her rent covered by her benefits direct to our agent.

Her 6 month tenancy agreement has just finished so will not be renewed.

Our agent will issue a section 21 notice which will they will roll on and only invoke if her rent top up and arrears are not paid on time.

Hopefully that should be enough help for her and at the same time limit our exposure to serious loss.

[jta]

teerev,

You're too nice, I mean it. Rent is rent. Come back and tell us what has happened in three months from now please.

[Ericthelobster]

I agree it's a sticky one. Don't know what I'd do myself in the circumstances; however whatever you decide, I would suggest you have everything very clearly stated in writing, and make it clear that this is a one-off offer and that she is in no doubt that you will evict without further ado if she doesn't adhere precisely to the agreement. And if she doesn't, then do exactly that whatever the excuses.

[Perplexed]

This is a very unfair predicament to put a LL in.

A LL is not responsible for the consequences of a T's poor financial decisions.

I would immediately contact the council supplying evidence of what the tenant is asking of you, and ask the council to pay her housing benefit to you direct. Chances are, they will class her as 'vulnerable' and pay direct, though I have no idea how long the switch will take as I don't take HB tenants.

What T does about her own debts is T's problem.

Personally I would get rid of this T as quickly as possible, before her debts became my losses.

[teerev]

I thought it might be polite to provide an update on this situation after all of the excellent advice.

Our letting agent has had a couple of conversations with this tenant and given her much help and advice, she has now realised that she does not need to go bankrupt and is rearranging her finances right now to pay her debts off over an extended period.

To give her some time to do this we have agreed that she can pay two months rent on her next rent day and she has agreed to ask the Local Authority to pay her rent direct to our agent from then on which should help to minimize our risk in the future.

[Perplexed]

That sounds OK, but make sure she really does not go bankrupt by regularly checking the Individual Insolvency Register (IIR) - link here: https://www.insolvencydirect.bis.gov.uk/eiir/

I know Isuggested it, largely through a lack of alternatives, but you do need to be aware that there is one problem with the council paying the rent direct to the agent or landlord, and that is that if the tenant is found to be working or there have beenoverpayments, the council can claw it all back from the landlord. So watch out.

I hope it all works out for you.

[teerev]

Our agent is already primed to keep an eye on the Insolvency Register but we both feel that the possibility of bankruptcy for our tenant has now been avoided.

The lady in question is retired, 67 years old and has some mobility problems so the work issue does not arise with her.

Through unfortunate circumstance we seem to have ended up with three benefits tenants, one gentleman was working but is now on disability benefits and already on direct payments although he is hoping to get back to work again. The other one is just going on to direct payments, he was working when he first rented from us but has been diagnosed with serious heart problems and is unlikely to ever be able to work again.

That's more than our fair share of benefits people but all of our other tenants are solid working people and seem likely to be with us in the long term.