Rental discount request?

[Elouera]

My mother rents out a house to 3 students which is managed by their student association. The student association have forwarded on a request from 1 of the students for a rental reduction, as they say they moved out of the property 2mths ago.

What amount is fair if she does allow a reduction, and would it be un fair on the others? What if the others decide they too will now leave and expect a discount too? Any thoughts or other considerations appreciated.

I'd say they should have discussed whether this would be possible at the time they moved out, it's not really on to be bringing it up now

@stitchmaker85- good point.

Mum obviously still has the mortgage and regular fees to pay, with no discount herself. She is always proactive in getting anything fixed asap, so unsure what to do/say.

Can your mum apply for a mortgage holiday? Lots of students are really struggling and have lost the jobs that paid for their rent. They may literally not have the money at all, at least they’re trying to pay some of it

@BuffaloCauliflower- A mortgage holiday isn't much help, as she still needs to may the mortgage off in full at some time. I'll mention it though.

She is trying to be reasonable, but is also affect job wise and doesn't know if its fair on the others still staying there? Or what amount, if any discount, would be advised?

That doesn’t sound fair at all, I take it they haven’t actually given any notice?

Is your mum open/able to arrange a payment plan if the problem is they’ve lost a source of income? If they had a guarantor she may have to go down that route.

@Elouera well unless she’s paying off the mortgage in the next 3 months I’m not sure a 3 month extension is really that prohibitive

My student daughters both rent in different areas and effectively moved out at the beginning of lockdown.

However apart from a reduction in the bill portion of their rent (one LL offered and the other agreed when approached), both are paying until the end of their contracts.

It's not the LL fault there is lockdown and it is not really reasonable to expect them to be able to re-let the accommodation in a shared house.

Does she have a letting agent managing the property or she deals directly with the student association? How is the rent paid.... 3 amounts each month from 3 different sources, or one payment which has been collected first at the other end (possibly by the student association)?

The problem I would see (and where a letting agent would be able to clarify) is whether ay discount offered should then be split between the 3 tenants. If you reduce the rent for the heating not working for more than 48 hours, or disruption caused by building work, it gets split between tenants. Can you legally offer a discount to one but not others?

I don't know the answer. And that's why I pay 12% of my rental income to an agent who does.

So the remaining two are still in the property?
I’d say your mother would be extremely generous to offer a discount, it should’ve been requested at the time.
Have students continued to get their usual loan payments throughout?

unless she’s paying off the mortgage in the next 3 months I’m not sure a 3 month extension is really that prohibitive

Depends really, it’s a ‘holiday’ not an extension. So the amount for the three months is added to the value of the mortgage (not just added to the end) and the monthly payments increase. Not such a big deal if you’ve got 20 years to go, but has a much greater effect if you’re in the last couple of years of paying it off for example.

All good points thanks. As far as I know the student association act as an agent and organise gas certificates, do inspections, take the rent etc. I have no idea if they pay separately or not though.

Does your mother actually need all 3 rent payments to cover the mortgage? Is your mother not making a profit? I think it’s unfair to expect them to pay if they can’t afford to at the moment. It’s a difficult time for most people right now.

I wouldn't waive rent retrospectively and think the tenant has approached it the wrong way due to that. If they'd contacted the landlord prior to vacating I think it would have been ok to ask to be released from their obligations - bit much to be charging someone for an empty room that they've left due to a pandemic especially when all mortgage companies are waiving their own rights.

Difficult one - I think it was the student’s choice to leave so they are liable for the rent in full the house was available to use.
It’s not a good idea to offer one a discount
Maybe offer a goodwill discount to all once the rent for the whole house is paid IN FULL? ( maybe the amount the first student asked for divided by three ?)
She is not obliged to do this
A payment plan is an alternative option to show she is being reasonable

Is it just rent or also includes bills? The latter is common with student housing. If that is the case, it would be fair to reduce the payment accordingly.b

Did the students choose to go home? I would still charge as still got overheads to pay for

The fees charged by the student association to manage the property have not changes or been decreased. She also paid a fair amount this year to get the students a new shed to store their bikes in (their request), a new boiler, new beds and entirely re-painted. I realise these are LL's expenses, but its far from a dodgy student let that has been left run down.

Early on, she got a letter from the student association saying that the students already had their loans in place to cover them till sept, so there shouldn't be any issues with rent. She is aware that students may well have lost their jobs or been furloughed, but so has she!

She's been furloughed and she's lost her job? Unlucky.

Does the rent include amount for utilities? Even then because the other joint tenants have stayed then they are actually being used.

Mortgage holidays cost owners more because they end up paying more interest so do not go down that route.

I would answer that as the property has not been entirely vacated then I am afraid we can offer no discount.

Also, the agency sounds a bit iffy. Was the statement re student finance an undertaking and did the tenants agree to this being issued? Because it's an inaccurate leap to make that just because a person has student finance in place they can guarantee rent will be paid. Even outside of global pandemic situations, finance at best covers the cost of rent but tenants have other costs too, like eating for eg, which the money also has to cover so in fact at the point finance is received they're in a shortfall position in regard to a twelve month contract - that only improves as the tenancy progresses and they are able to access other sources of income ie wages to offset the shortfall.

@SeasonFinale: I don't think the rent includes utilities but not 100% sure as its my mums property.

@Heroicasymphony- I don't know the details of the wording in student association letter, or whether the students were informed? I just recall her telling me and saying there wouldnt be an issue with rent. Yes, mum only works part-time. One company has furloughed her, the other can't because there are still jobs, but much fewer shifts than before. With that one, she's had 1 shift the entire month.

Between 2 minds. Your mothers situation sounds quite precarious with 2 part time jobs, one significantly reduced and one furloughed plus a student rental property that may not be filled in September. The students had loans in place to cover their rent. Yes it's tough for everyone. You could sit down with her and go through her finances and see if she has room to make a gesture to all three of them or offer them a discount on next year. However, based on what you have said, I would be leaning towards saying that she is not in a position to help.

@ChateauMargaus- thanks. These students are leaving in sept and the next 3 have already signed the agreement to take it on from then. I assume this could change though if classes don't re-start. I'm sure she would offer to help discount them all if they were indeed already staying on next year, or if he position was better. She did already help the student in question out when he could only pay half the rent 1 month, then make it up later. At the time though, he never mentioned that he's already moved out.

Good to know she already has tenants signed up for next year.

She could ask the student association what other landlords are doing and ask them to reply stating the policy.

I would be somewhat concerned that the remaining rent might be at risk given the student already has had delays in making payments and that the property is due to be rented until September.

Also is the Agency going to reduce their fee either as a proportion of what is going to be paid in line with the discount given or b) give her a discount on her fee over on top of the reduction?

After all if they know the students have less money so think they should pay less, then it would follow that she is getting less so should pay less too.

Maybe she should say that she is happy to release the one from their contract if she can find someone to move in and take it over until the original move out date - on the off chance there might be someone looking for somewhere to stay?