Playmysong
But as you as say, the LL will still have to pay their mortgage with increased interest......so in that sense they haven't 'pocketed' the mortgage holiday, because in time, MORE will come from their pocket than if they hadn't taken it.
The reality of what has happened here is the tenant has had lower rent (no plan for the reduction to be paid back) but the Landlord will incur HIGHER costs overall. Yes, they haven't paid the mortgage right now, but overall they will pay more. Therefore, the tenant has gained at the LLs expense.
I'm not saying this is right or wrong, just the reality. Lots of people seem to think the mortgage holiday is a free gift of money to LLs. It isn't. It is a temporary reprieve which costs them more long term.
Some people seem to think that LLs should sub tenants in difficulty because they are usually wealthier people. However, no-one applies this to other sectors of the economy. No-one suggests that Tesco should give less affluent customers free shopping or reduced shopping for a month, because its shareholders can afford it and are using that revenue to pay their mortgages. No one suggests that the window cleaner should clean windows for free if people struggle to pay, during this period, or that Marks and Soencer should give free school uniforms to children of workers who have been furloughed, because they can afford it and the furloughed or redundant workers can't.
There are 2 separate issues here.
One is the question of whether LLs have a duty to supply property to tenants at below market rents, which may well incur losses for them, when a tenant faces financial hardship.
The second is whether it is financially better for a LL to accept lower rent from known, reliable tenants, rather than face the risks of voids and uncertain tenants in a difficult market.
Personally, I think the answer to Q1 is that there is probably a short term responsibility to do this during a crisis such as Covid. However, I think any responsibility in this area is pretty short term and if giving rent discounts is resulting in losses for the landlord, they need to consider that and as long as everything is communicated clearly and compassionately, it would be reasonable to give the 3 months required notice from late August, if all other payment options (such as longer term payment plan) have been explored. It won't be in anyone's interests if the property is repossessed.
With regard to the second question, it may well be better to keep tenants on paying lower rent, in the current climate. This wouldn't normally be the case, but might be now. Some rental income, which may well cover most costs if the landlord might be seen as preferable to a void and then Unknown tenants who might also soon struggle to pay.
Personally I would be keeping the tenants beyond their 6 month rent reduction for a further period of rent reduction, because of the answer to Q2. I would hope to arrange a plan for them to re- pay some of the owed rent beyond the 6 month period, understanding the cost their lower rent has to me. I would hope they could appreciate I had subbed their rent whilst long term needing to pay my full mortgage and more interest, plus my flexibility and would be able to understand why I needed to ask them to do this and see it as reasonable.
In this scenario, most tenants want to pay and feel that having signed up at a certain rent level, they should pay and must pay if they can. I take this view. Some tenants see that if there is any opportunity to pay less, it should be seized, regardless of what they signed up to pay or regardless of ability to pay. There can be wide variations on whether tenants see an agreement with a Lamdlord as something to stick to, or if they think that Landlords are fair game to try and avoid paying rent to. I think some people like to de-humanise Landlords and use the fact they have property as a way to justify avoiding elements of the contract, without feeling it is wrong. I am not talking about the current Covid situation, when clearly lots of people have genuinely been thrown into difficulty, but in usual times, when some tenants will always look for loopholes or ways to escape paying full rent. Unfortunately, lots of people seem to support them in these endeavours, purely on the basis that the Landlord owns property, so seems to deserve it, whilst a tenant without property seems morally entitled to any action to avoid paying rent. There can be a convenient forgetting of the legal and binding agreements which tenants choose to sign up to.