Tenant asking for covid rent reduction, WWYD

[psychedelephant]

My tenants have asked if I could reduce the rent due to cv and I've said I'm happy to work something out. Wondering what other landlords are doing.
I suggested they do a financial statement, look at the benefits calculator and work out what they can afford but they keep bouncing it back to me.

Just say more than happy to work with them but you need full info to agree to something.
A mortgage holiday isn't free you still have to pay it back at the end .

Sounds like they are scared. What can you afford to reduce it to? Start there.

Just tell them that you are more than happy to help but you need them to explain to you what they need.

NRLA I recommend all landlords join -its tax deductible the best money I ever spent - they have phone advisers & forms & forum, training etc they also have advise on this & legal issue

but do remind them that they will have to pay arrears back

One tenant who is self employed has said she can't pay for the moment. I trust her (and she's a friend of a friend) so am not going to ask for 'proof'. I've said fine that we can work something out when the benefits kick in but I imagine she won't be able to pay it all. Another tenant is a uni student and didn't renew as the university is closed (he'd normally rent thru the summer) and I'm unlikely to rerent it now. I'm waiting for another tenant to claim hardship too. So currently down 40% on my income. I can weather it in the short term but this is my income and I have two kids. I expect any tenant to do all they can to pay the rent - I can be flexible but I'm not doing this for free. But no way I'd evict anyone (even if I could) - what would the point be? No one's going to move in.
In your case I would ask them when they think they can repay the rent and have them work out a schedule.
And a mortgage holiday means you will be paying more later, not that it's written off. You could tell them an X% discount now but an equivalent increase later in the year.

My tenants have been happy to discuss it, I realised they would have issues due to the industry they work in and being self employed. I have taken a mortgage holiday and given this as a discount (about 1/3 of the rent), that they will not have to pay back (and I will pay back the mortgage interest on this from my own income in the next couple of years).

They are going to pay 2/3 of the remaining rent every month from Universal Credit as this is all it will cover, and the remainder of the discounted rent amount in June when the self employed scheme starts paying.

I am really hoping this works out and that things are moving towards opening again as I can't afford for them to struggle to pay long term. But even if it's bad timing for me not having much money at the moment, I still have the asset long term, and the responsibility to be a good landlord to my tenants. Also if my tenants decide they cant afford the house anymore and move out to live with family there is no chance I would rent it for a few months while corona is going on so I prefer to keep them paying half the rent that have an empty house.

We budget for 20% fallow periods/defaults on rent.

Have had a tenant for three years, no problem with rent. Hourly paid, claims laid off not furloughed. Claims can't pay rent. Not entirely sure of the truth but we are in the eye of a shit storm. Giving it 4-6 weeks and encouraging to claim UC. Have asked for a payment plan and will be looking for it to be met.

On the other side of this, our cleaner can't presently clean. We are paying her; others aren't. I assume she can't pay her rent.

My tenants parents are quite well off and if don't work can claim housing benefit etc so I don't expect to reduce rent as already well below market rates..

We sent out a message to tenants telling them that the first step, if they are struggling, is to talk to us (the landlords) good tenants are with looking after. Personally we treat each one on a case by case basis. It helps if you know them all ( as we do)
We are all in this together and it's just a case of getting through it with as little hurt /damage /loss to both sides as possible. Hope other landlords are just as friendly?

The number of landlords on this thread who are being kind and understanding to their tenants is heartwarming. I rented for almost 15 years, I'm not sure any of mine would have been do good!

That is very odd and frustrating not saying what they want. if they really won't say I guess you can either ask for documentation of the reduction in income and work from there, or offer a small reduction and see if that prompts them to suggest a lower figure. Or simply say you would consider a suggestion if they give you one, otherwise rent stays as normal.

I'm a tenant and I sympathise with any tenant struggling to pay but this kind of vagueness doesn't help anyone.

I guess one thing for most landlords to bear in mind is the cost of having the property empty for a long time if a tenant does have to leave. Goodness only knows when anyone will be able to move again. The market must be at a total standstill. If someone needed to rent a new place right now I don't even know how they could. Quite alarming really.

Our tenants haven't asked for a reduction. We are mortgage free on both of the rentals but rely to some extent on the money. I would want proof in writing that they couldn't afford to pay before offering anything.
No one can be evicted while this is going on.

What kind of tenants are they generally? Are they just seeing what they can get, or in genuine need? Mortgage holidays are only for 3 months at the moment, will that actually be long enough for your tenant's situation to improve?

I let my landlady know rent would be paid as usual as I'm a student and my income isn't affected (yet...). She was more concerned with how me and my DCs would stay safe as I'm a single parent of 3, told me to let her know if I needed anything dropping off (porch area so totally safe and no contact). It made me cry.

Luckily my ex lives relatively close and has been doing the food shopping for me and our DC.

I think your tenants need to be more transparent, its the only way to deal with this situation, 100% honesty.

I wouldn't give a rent reduction until I had seen proof via pay-slips etc.

Most people I know are WFH on full-pay or have been furloughed (on 80% of normal wages, but no commuting costs) or like me, actually slightly better off because I've been furloughed with current job and earning additional money working full time making deliveries/organising stock for the local farm shop.
Shop is owned by a friend, she is drowning in orders and making a fortune!
Hopefully these new customers will stay with her long-term so she is happy to pay me decent wages to help capitalise on this opportunity.

It sounds like you don't have a relationship with your tenant, and they are trying it on. You might have to offer a 'good-will' gesture temporary reduction in the condition it is paid back within 6 months. I would be loathed to get in this position though, as there is no legal protection.

I actually have a rental property, I have been in touch with the tenant about other maintenance repairs I needed to organise (outside repairs) and she told me she is still working (key-worker). If she wasn't, I would expect her to apply for UC so she could pay the rent. I'm not wealthy and can't afford to subsidise someone's else's rent unless it is completely unavoidable.

We too, would be willing to help but only on seeing evidence to help us decide how much help is necessary.
So far all seems good though. Fingers crossed.

If they are unwilling to work with you then no don,t reduce, but if they can say that they are willing then show flexibility.

Thanks for all the replies, it's helpful to get an idea of what others are doing.

It's true I haven't got much of a relationship with them, they only moved in a few months ago. They requested a new appliance and various other things which I sorted out and we've been on good terms.

Two weeks ago I messaged them about something unrelated, I referred to the current circumstances and said to let me know if I could help. A few days later they messaged to say they would struggle in the future and didn't know when they'd get more money (they referred to the government plan to pay up to 80% of wages). I replied saying to look at what Shelter recommends, work out a financial statement and get back to me with what they can afford. I said I’m happy to look at it again over time since things seem to be changing so quickly and suggested they check the benefits calculator to see what support they’re entitled to.

They said they'd spoken to Shelter and that I had to say what I want them to pay.

I replied saying I'm happy to agree a plan if they work out how their income and expenses have changed and propose what would work for them, and had they had a look at the benefits calculator? So they've bounced it back saying it's up to me. They haven't even made an offer, which is what makes me wonder if they've misunderstood something Shelter said.

I'll give them a ring, maybe that will be more revealing.

I believe your tenants asking you to set the lower rate without providing any information about their change in income shows they have had no change in income or circumstances and just want a lower rate. If you agree to this and find out later that they have not had a change in income, they are able to truthfully advise they never told you that their income had decreased and you chose to reduce the rent as a goodwill gesture.

As a landlord of multiple properties - DO NOT reduce their rent. Remember, a lot of people are still working their normal hours at their normal pay. Check your contract to see who they recorded their employer as (which may indicate if they are still working or not). If their income has decreased due to COVID-19, they would willingly show you evidence and you could decide based on that information whether to reduce the rent or not. As they are unwillingly to provide any evidence, I would not reduce the rent at all. If they later provide “evidence” I would be making calls to confirm what you are provided is accurate, as there will be a lot of people trying to take advantage.

If reducing their rent, I would only reduce in very short term basis (ie - 3 months, which could then be reviewed based on world events), with a requirement to repay the reduced amount when rent returns to fall rate (ie - repent plan if $x per week in addition to regular rent). Making this clear may also see them suddenly be able to pay the correct rate.

If they have been furloughed they can provide the letter from their employer to confirm this. I would assume that most people coping on 80% of their normal wages would be able to cover their rent....my tenants had to pass an affordability test as part of the agents tenant check I paid for.
I would assume they are trying it on if they can't produce evidence to support their claim, as their workplace will have had to produce the paperwork to furlough them and this will be reflected in their pay-check/pay-slip.
What does your agent advise?

My estate agents asking for bank statements, income and expenditure plus proof of current income etc. Also needs to be paid when this is over. All of which is reasonable.

Thanks for replies.

I know they'll have taken a hit at work (neither can wfh) but one has the kind of job I'd expect to offer formal protection. Apparently there hasn't been much communication with the employer.

They haven't applied for any benefits, maybe that process will clarify things.

perma we don't use an agent anymore. They were aggressive about hiking the rent at every opportunity and put a lot of pressure on us to accept very long contracts, one of them fraudulently advertised our property as rented, I just had a few bad experiences.

I am sorry you are in this position.

My daughter has been furloughed at 80% of her basic contract of 14 hours at minimum wage. She did approach her landlord but wasn't quite sure what to ask as she didn't know if she was definitely going to be 'furloughed' at the time - her place of work shut down hours after the government announcement. She had to wait a week to find out. The money she will be paid won't cover her £500 rent. Apparently when working people get given their 14 hours, then are able to sign up for any other available shifts. She always volunteers for as many as possible to earn enough to pay rent and food/travel. She didn't want to come home as I'm old and should self isolate, the landlord wasn't forthcoming with an offer, so I have lent her the money so she can eat. As it is going to continue, I'll be doing this until she returns to work.

A 20% reduction as you suggested would have really helped her.

Salome I'm sorry to hear that. Apparently a lot of employers have been very lax with information, which then makes it hard to know what to do.

Has your daughter had a look at Citizens' Advice? It looks like your daughter should be able to apply for Universal Credit - ? Lots of good guidance there on what to do if your hours are reduced, if you're subject to lay off or short-time work and what to do if you can't pay your bills.
www.citizensadvice.org.uk/work/coronavirus-if-your-employer-has-told-you-not-to-work/
www.citizensadvice.org.uk/work/leaving-a-job/redundancy/layoffs-and-short-time-working/if-your-contract-allows-layoff-or-short-time-working/
www.citizensadvice.org.uk/debt-and-money/if-you-cant-pay-your-bills-because-of-coronavirus/

Obvs it provides no solution - at this stage I don't think anyone has a solution - but it does offer some idea of where to start.