Coronavirus - Tenant rent payment holiday.
Discussion
We are in a position that we have several private residential tenants.
Over the coming weeks we expect requests from them for rent holidays.
We are happy to reduce or cancel rent whereby the tenant is not able to pay.
I am conscious that tenants may request their rent cancelling whereby they are still employed and receiving income as before the outbreak.
As such what is the legal requirement in the following situations.
A) tenant/s no income change - Request rent holiday.
B) tenants where one has no income change, but partner has a decrease or income reduced to zero.
C) tenant/s both have reduction in income or income reduced to zero.
As said I'm happy to reduce rent to zero. But what are my obligations.
Does any reduced rent have to be repaid at a later date?
As our mortgages are a small proportion of the rents, are tenants liable for the mortgage part or the rent in full, if at all?.
Any advice would be appreciated and for reference were unlikely to ask for mortgage holidays regardless of any change in rent we charge.
Over the coming weeks we expect requests from them for rent holidays.
We are happy to reduce or cancel rent whereby the tenant is not able to pay.
I am conscious that tenants may request their rent cancelling whereby they are still employed and receiving income as before the outbreak.
As such what is the legal requirement in the following situations.
A) tenant/s no income change - Request rent holiday.
B) tenants where one has no income change, but partner has a decrease or income reduced to zero.
C) tenant/s both have reduction in income or income reduced to zero.
As said I'm happy to reduce rent to zero. But what are my obligations.
Does any reduced rent have to be repaid at a later date?
As our mortgages are a small proportion of the rents, are tenants liable for the mortgage part or the rent in full, if at all?.
Any advice would be appreciated and for reference were unlikely to ask for mortgage holidays regardless of any change in rent we charge.
1. Rent holiday can/should be negotiated and agreed by both parties
2. After the holiday period a repayment plan must be agreed.
3. No evictions during the 3 month period.
To sum up they will HAVE to pay at some point. pretending that they're unable to pay wont help them in the long term.
2. After the holiday period a repayment plan must be agreed.
3. No evictions during the 3 month period.
To sum up they will HAVE to pay at some point. pretending that they're unable to pay wont help them in the long term.
Our family business is leased properties (although I'm not actively involved) - around 8 shops, 4 offices, 3 flats and 6 restaurants.
We've sent letters to them inviting them to contact us if they have concerns and to speak to us sooner rather than later. This allows them to digest the contents letter and think of a response/plan/offer in their own timeframe. Putting extra pressure on them to think in a telephone call isn't ideal which is why we've gone the letter route. So far the response has been positive. Obviously the restaurants may change stance.
We will probably allow them to defer rent and then cancel it down the line. My father already operates his leases on the basis of 11/12 payments - if you pay your rent on time that year then he returns the December rent as a Christmas present - probably why he's had the same tenants in every property for over 10 year, bar one flat.
We've sent letters to them inviting them to contact us if they have concerns and to speak to us sooner rather than later. This allows them to digest the contents letter and think of a response/plan/offer in their own timeframe. Putting extra pressure on them to think in a telephone call isn't ideal which is why we've gone the letter route. So far the response has been positive. Obviously the restaurants may change stance.
We will probably allow them to defer rent and then cancel it down the line. My father already operates his leases on the basis of 11/12 payments - if you pay your rent on time that year then he returns the December rent as a Christmas present - probably why he's had the same tenants in every property for over 10 year, bar one flat.
vikingaero said:
Our family business is leased properties (although I'm not actively involved) - around 8 shops, 4 offices, 3 flats and 6 restaurants.
We've sent letters to them inviting them to contact us if they have concerns and to speak to us sooner rather than later. This allows them to digest the contents letter and think of a response/plan/offer in their own timeframe. Putting extra pressure on them to think in a telephone call isn't ideal which is why we've gone the letter route. So far the response has been positive. Obviously the restaurants may change stance.
We will probably allow them to defer rent and then cancel it down the line. My father already operates his leases on the basis of 11/12 payments - if you pay your rent on time that year then he returns the December rent as a Christmas present - probably why he's had the same tenants in every property for over 10 year, bar one flat.
That is a very generous way to repay loyal tenants. We've sent letters to them inviting them to contact us if they have concerns and to speak to us sooner rather than later. This allows them to digest the contents letter and think of a response/plan/offer in their own timeframe. Putting extra pressure on them to think in a telephone call isn't ideal which is why we've gone the letter route. So far the response has been positive. Obviously the restaurants may change stance.
We will probably allow them to defer rent and then cancel it down the line. My father already operates his leases on the basis of 11/12 payments - if you pay your rent on time that year then he returns the December rent as a Christmas present - probably why he's had the same tenants in every property for over 10 year, bar one flat.
I'm a landlord and have a small parade of rental shops and flats as well as some more flats and lockups in the Mews to the rear, all of our shop tenants are long term and most of our flats don't change over too frequently either.
On Thursday i met the hairdresser who had just had all of her forward bookings cancelled and the dry cleaner who had only had three customers this week, I agreed an immediate one month rent holiday and 50% rent reduction thereafter for the duration or as long as they stay in business, if I have to help more I will.
This weekend I have had conversations with several of our flats tenants who have all said their jobs are okay at the moment apart from one who works in baggage handling at Gatwick, he expects to be laid off tomorrow so may need some support.
Other tenants have yet to speak to me but my plan is to deal with each case on an individual basis.
On Thursday i met the hairdresser who had just had all of her forward bookings cancelled and the dry cleaner who had only had three customers this week, I agreed an immediate one month rent holiday and 50% rent reduction thereafter for the duration or as long as they stay in business, if I have to help more I will.
This weekend I have had conversations with several of our flats tenants who have all said their jobs are okay at the moment apart from one who works in baggage handling at Gatwick, he expects to be laid off tomorrow so may need some support.
Other tenants have yet to speak to me but my plan is to deal with each case on an individual basis.
I would be grateful if any of the surveyors or lawyers here could remind me of the law around landlords of non-domestic properties taking acting for non-payment of rent. My knowledge is rusty and it would be good to know in these times. My role does not involve landlord and tenant but just wondering might happen to local businesses that have been forced to shut.
On the topic I'd say its up to the Landlord what to do, and I guess in part that depends on how much a landlord needs the rent. However reality is a landlord that demands rent from a tenant that cant afford to pay it is just going to end up with an empty property at some point in the future and could well struggle to let it again. Probably much better to accept no rent where a tenant asks for it, for a limited reduction of 6, 8, 12 weeks.
On the topic I'd say its up to the Landlord what to do, and I guess in part that depends on how much a landlord needs the rent. However reality is a landlord that demands rent from a tenant that cant afford to pay it is just going to end up with an empty property at some point in the future and could well struggle to let it again. Probably much better to accept no rent where a tenant asks for it, for a limited reduction of 6, 8, 12 weeks.
I was talking with a relative who works in a local authority, and their recommendation to me as a private landlord was the following:
1) If you genuinely believe the tenant is struggling directly as a result of their job/virus then do the right thing mutually.
2) If you have a tenant who you suspect may be just trying to take advantage of the situation, then advise them that you will consider the application once they have applied to the local authority for housing support. This will then mean they have to declare and show all savings and earnings - which they would not need to do to you - that way if they get the housing allowance then they can pay you and you know there is a genuine issue. If the local authority refuse, then that may help you make the right decision on your rentals due from them.
1) If you genuinely believe the tenant is struggling directly as a result of their job/virus then do the right thing mutually.
2) If you have a tenant who you suspect may be just trying to take advantage of the situation, then advise them that you will consider the application once they have applied to the local authority for housing support. This will then mean they have to declare and show all savings and earnings - which they would not need to do to you - that way if they get the housing allowance then they can pay you and you know there is a genuine issue. If the local authority refuse, then that may help you make the right decision on your rentals due from them.
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