Aibu tenants not paying rent

[FrenchFancie]

AIBU?
We are ‘accidental’ landlords in that DH got posted abroad four years ago and we put tenants in our flat. It’s our only flat, we have a mortgage on it. Rent has always just about covered mortgage and costs, we don’t make any money on the flat.

Tenants have contacted us to say they can’t pay rent due to one of them loosing work due to Covid. Fine, ok, I know it can’t be helped.

I’ve asked them to apply for whatever help the government will offer, asked for clarification if it was a job loss through redundancy or just that she’s been given no hours (iirc she works for a retail chain). - as this will make a difference I think in the support that she will be offered?
I’m prepared to accept lower rent for a period but I want them to apply for whatever they are entitled to in order to minimise both their loss and ours! I’m not going to evict them due to this, and we probably won’t treat it as rent arrears but instead just write the missing rent off - I think I’m being pretty reasonable with this, but tenants say it’s none of my business what benefits they apply for and I just have to accept whatever rent they choose to pay as they can’t currently be evicted.

AIBU to think they are being CF? I mean I’m happy to work with them on this but feel we are being taken for mugs if they just refuse to pay rent.

YANBU - the government has given tenants a ‘get out of jail card’ with their approach to tenants and rents.

The reality is (and I’m self employed with NO income presently) if you want to live somewhere you have to pay for it.

Only 1 the of the 2 tenants has stopped working (and presume they have a joint AST) so they are jointly responsible.

As a start point I would join NLA National Landlords Association and ask for their advice.

There was a post on FB telling people what wording to use if they want to get out of paying their rent It sounds exactly like your tenants message to you. There will be CF's trying to get out of paying their bills!

You could sell or leave the property empty.
could you? Is it so easy to sell a property you think? (well, it is in my area, but it's not the rule across the country)

Empty? It still costs money and you are at great risk of attracting squatters and being vandalised. Not recommended to anyone. Not anyone can afford to pay bills and maintain on an empty property either.

I agreed a £200 a month reduction yesterday fr 3 months with my son's tenant who is down to 2 days a week for work but he will pay the difference after 3 months in instalments. There is no mortgage so mortgage interest postponement by a lender is not relevant.

I also send him 3 useful links to universal credit and another to the employee wage deferment scheme - he is under PAYE an in a sense furloughed which his employer might want to consider bringing him under (employer's choice) and he seemed very happy. (His income is more even now than his landlord, my son, so not the usual situation).

There have been 500,000 recent universal credit applications by the way with some loosening of the rules such as face to face interviews. Apparently there are as many as the number of all those people who found work in the last 5 years such that until this crisis we had reached the fullest employment even since the 1970s so sound like we have lost all our gains to keep people alive. Difficult balance for the state at present to get right. Destroy so very many lives so many many fewer most of whom might well have died in the next few years from underlying conditions get more life but I can see why we have done it and it does hit fit people hard too.

@fishface1979
It's not a holiday, it's a deferral of payment - you still pay the same, and with additional interest. So ultimately you pay more. The term 'holiday' is very misleading.

I'd argue its spot on. You pay for your holiday and then you ultimately end up paying more for stuff whilst ON the holiday. It never costs just what the holiday costs.

Don't people realise that landlords have to pay mortgages?

A common phrase on Mumsnet is "why should I pay someone else's mortgage?". One argument seems to be that housing is such a fundamental need that it should exist outside of anyone else's financial needs, preferably with rentals run by the state who in turn pay private LLs whatever they deem fit

Strangely, the point that this could amount to state theft doesn't seem to bother those who suggest it ...

For those who see this as an opportunity to get cash in their pocket and couldn't care less about the consequences and impact on others, do they really lack any sense of forward thinking and that the first thing their LL will want to do is to get rid of them as soon as possible? The last thing any LL want is the uncertainty of payment. Every LL take a risk, that's part with being a LL, but they will do their upmost to minimize it. If you not only stop paying but refuse to engage, do you really think your LL will say in 3 months 'never mind, I'm sure we can come up with an arrangement now and I can trust you'll oblige to it'.

I suppose some either don't have the mental bility to think 3 months ahead, or just don't care, they'll just moan and cry outrage when it happens.

Is it so easy to sell a property you think?

At the right price of course it is

Empty? It still costs money and you are at great risk of attracting squatters and being vandalised.

Still an option.

I absolutely get that these are not options that necessarily benefit owners or are attractive too ok them.

But they are still options open to you. If you are a landlord it is because you’ve made the choice to be, because it suits you.

For most people I’m sure renting out there property makes the most financial and practical sense. But that doesn’t mean it’s not a choice

I totally agree with this, but it's also fair to say that renting's often a choice too

The overall point is that both landlords and tenants have responsibilities and getting this out of balance isn't always wise. Yes there'll be wobbles, but decent communication and a bit of good faith on both sides can usually work things out

Unfortunately OP's tenants don't seem committed to either of these things, which is why I personally wouldn't want them there long term - and I certainly wouldn't write off any rent, for fear of setting a precedent for the next time they'd prefer not to pay

I think if they are claiming they can't afford to pay rent, they need to 'prove' it based on job loss/layoff letter, proof that they're not getting paid, or show you what benefits they are getting.

Otherwise, they should keep paying.

And mortgage holidays aren't 'free' ... interest will still be accruing.

but it's also fair to say that renting's often a choice too

I’m not sure about that. In some cases yes. In many others I think buying just isn’t an option.

I broadly agree with the rest of your post though.

My landlord reckons she cannot get a mortgage holiday on a buy to let. I'm sceptical about that! She also refuses to engage about agreeing a lower figure
Like not talking about it will magic the money up hmm

From the Barclays website:

At the moment, we’re only offering payment holidays if you have a residential mortgage (for your home), and if your income has been affected by the coronavirus situation. We currently looking at a way to help our buy-to-let customers in the short term

OP you will just have to accept that right now for your tenants, paying the rent/your mortgage is not the 1st priority.
They are not earning anymore. Geddit?

Whatever money they had when the hammer came down will have to tide them over until they get a penny in governmental help or benefits.
Do you really think that they and their children should go without food in order to pay your mortgage?
If you want to work with them, as you say, you should take responsibility for your own mortgage and seek whatever help you can with it. You have more room for manoeuvre than they have.

When the dust settles in a few weeks, they, and everyone will have a better understanding of where they stand. You should calm down.

In this story, the mug is not you OP, it's your tenant. They can afford to pay a mortgage since they are paying yours. But through circumstances that benefit YOU, they have to be content with buying you that flat.
Be grateful, stop being so rude and do sort your mortgage out.

It's difficult. I'm an 'accidental' landlord myself (our house wouldn't sell and I couldn't afford to pay two mortgages so rented it to our friends and former neighbours who have lived there happily since) and don't make any money on it in terms of cash in hand, but I'm obviously making money in the sense they are paying off my mortgage. I spoke to them about a week ago and said if they were struggling to pay the rent at all to let me know and we would find a compromise, so I think that's probably what needs to happen here. I wouldn't be asking about their intimate financial details or for them to tell me what benefits they were getting as that's none of my beeswax, but I'd hope we could find a middle ground figure that they could pay for the time being, even if it was only a half or a quarter of the rent or something.

If they couldn't pay at all, then I'd just have to deal with it I think. They're good tenants, nice people, and if they can't afford to pay the rent after paying it on time every month for several years, then it must be serious for them and they must really be struggling. It would involve some financial sacrifices for us, but we can just about afford to make them. I don't think, given the current situation, one person (ie.the landlord) should be absolutely fine and another person (the tenant) should be totally on their knees. I think now is the time that there needs to be sacrifice on both sides and it's about working together to find a compromise.

What DesLynnanMoustache says.

I'd expect any landlord to apply for a 6 month mortgage holiday on their rental property to give tenants breathing room

You can serve notice. The only change to the law in response to Covid19 is that no fault notices have to be 3 months instead of 2. You should send a warning shot across their bows by serving a notice on ground 10. Include a letter saying you would prefer if they engaged with you by discussing their financial position rather than proceeding to court. I would also include a link showing that all the government has done is to change the notice length for s21. That may focus their mind. It is essential that tenants communicate properly with landlords during this period. And of course vice versa.

Their attitude is shit.

On that basis alone I would get them out asap and fuck up their credit rating as much as possible.

I’m not sure about that. In some cases yes. In many others I think buying just isn’t an option
By your definition of 'choice', they could live with their parents, or in a hostel, or camping. After all, these are all options, so renting is a choice.

Such a pointless statement to talk about 'choice' as if it's an evidence! Just about everything we do is a choice, it doesn't take away the fact that some choices are not so attractive to the point of them not being productive choices anymore.

As only one of them has lost their job, they may well not be entitled to any help from UC, if the other one's net pay exceeds £500 or thereabouts, plus whatever the LHA for the property is.

I think they need to be clear with your what their financial position is. And if you explain that you need to know what their financial position to enable you to claim on your landlord's insurance, they may be a bit more open.

Lovely responses on here
Thats right go ahead and evict during a global pandemic. No wonder everyone hates landlords!

*Their attitude is shit.

On that basis alone I would get them out asap and fuck up their credit rating as much as possible*

Lovely.

Not everyone can get the 3 month holiday. We have savings in our account for when husbands tax bill is due. Once paid it will be zero. Unfortunately mortgage company have declined us. So £700 mortgage to pay, no rent and we need to live in the property in 2 months time but have to give 3 months notice now. What about us? We are not greedy tenants but we pay for the property so why should we be out of pocket too?

Please don't serve notice yet. Act more humanly then they are in these difficult times.

Write to them, say that you understand their stress and that you are willing to consider options, but you need them to work with you to agree these. Lay out clearly what evidence you would need from them, and discuss a forward plan. Point out that you hope that your letter won't be ignored as it would otherwise leave you with no choice but to make decisions of your own doing which you want to avoid as much as possible.

Then it's up to them.

Can see it from both sides.

On the one hand, their attitude is shit and the reality is, if they don't pay the rent, you can't pay the mortgage, and they could end up homeless regardless if the bank takes the property off you. So its a bit stupid of them really to do that, especially when they will eventually get paid 80% of their wages, plus benefits.

On the other hand, I think all landlords should be able to afford all of their properties mortgages regardless of tenants. It's foolish to go into that business otherwise, just plain stupid. You're depending on someone else far too much, and it's been time and time again proven you shouldn't rely on others. You could have sold the property, so it's on you.