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t clarke

Assisting Tenants Through Coronavirus

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I’m looking for some advice from anyone who is familiar with the legalities of managing tenant disputes please.

We have one property that we self manage and is tenanted by a couple who own a cafe.  Given the restrictions on social gathering their business is clearly going to be affected over the coming weeks.  I would like to get in touch with them to check they are ok and offer support, and was thinking that it may also be in both our interests to tell them to discuss with us if they are struggling financially and need to make any alternate arrangements for payment of rent, for example delayed rent payments.  I would rather they tell us and make arrangements to get through any difficulty in advance so we can plan for our own outgoings.

My question is whether such an offer could make it difficult in the future should there be any prolonged periods of rent arrears.  I obviously want to be as helpful and understanding as possible, but don’t want to create a potential issue down the line.

any advice much appreciated!

Thanks

Tom

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Thanks Richard, these were my thoughts exactly.

Since posting this there was a statement by RLA and NLA encouraging landlords to work with tenants to assist them as much as possible.  

https://landlords.org.uk/news-campaigns/news/landlords-call-package-support-tenants-hit-coronavirus


This gave me some reassurance I could avoid such a gesture being taken advantage of later down the line.

I’ve since been one touch with our tenants who were appreciative of the message and absolutely fantastic In their approach to the current situation.  I’d encourage others to do the same as it can only help build positive long term relationships.

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I'm surprised by the lack of interactions this post has received. Excellent post in my opinion. My question to you is @t clarke, have you got Rent Guarantee Insurance? If you're covered, give your insurer a ring.


I also self-manage and yesterday night was informed by my tenant saying he's going to see his income reduced by his employer after this month. I'm thinking of lowering his rent for a period of up to May, potentially June. My personal dilemma is the following: 

1. Reduce their rent to £585pcm during this period with no expectations of them paying the difference (rent is £735pcm so I'm taking off £150 off their rent).
1.1 I have Rent Guarantee Insurance so hoping to get the missing income from the insurer. I am currently waiting for the insurer to get back to me for advice on what to do.

2. Reduce their rent to £585pcm during this period BUT make a re-payment plan where they pay the leftover amount over a period of 6-8 months after June. 
2.1 This is another option I'm considering if for whatever reason the insurer does not play their part. 

3. Reduce their rent to £585 with no expectations of them paying the difference for a period up until June.
 

I'm thinking of asking him for proof (i.e. receive copies of pay slips) of his reduced income. My tenant told me he pays almost £500 a month for his Range Rover so I also don't want to be taken advantage of - priorities I guess. Especially given that they've only been at the property for 2.5 months. 

Stay safe everyone
Raf

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Thanks Rafael.  There are probably so many posts about Coronavirus that this just got lost in the ether!

I don't have rent guarantee insurance, but am also not too concerned having had a discussion with my tenant.  Clearly things change daily so who knows whether their situation will take a turn for the worse.  Thankfully these particular tenants have been in place for a year and have a business close by so I think they will be cooperative in finding a solution should we need one.

With regards your dilemma, contacting your insurance as you've done definitely makes sense.  I think regardless of this (and your insurer will no doubt ask for this anyway) you should obtain clear evidence of what exactly is changing with regards to their income.  This would be typical of any up front referencing checks so I see no reason why this is different.  You need assurance that their situation is likely to improve if/when this goes away, so I think this clear statement of facts from their employer is definitely key.  Out of interest, is the £150 reduction at their request or a figure you are proposing?  The statement from their employer should assist in understanding what a suitable rent adjustment is also.

I appreciate that you don't want to be taken advantage of and certainly I'm sure some unscrupulous characters will chance their arm.  I'm by no means saying this is the case with your tenant, but if they have extravagant outgoings such as the car payments you have mentioned then I would personally be ruling out option 3!  

Option 2 sounds reasonable, but I'm not sure of the mechanism for making that happen (i.e. contract amendment?).  I'm not sure if you use OpenRent, but they have released some functionality for deferred payments so may be able to capture this.  

It's a really difficult situation for all.  Hopefully there are some more experienced (than me) landlords out there who can provide some insights into potential options for executing this in a manner that is robust and compliant.  

Good luck with it.

Tom

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