COVID-19: Support for landlords?

goltho

rudigarude said:

Can I ask, don't you have savings (an emergency fund)? What would happen to your finances if all three properties needed expensive repairs at the same time, e.g. like roof damage from a storm, boilers breaking? 

In 21 years, that's never happened. I also know the condition of the properties well so I assess the risk of major simultaneous non-insurable costs to be so low as to be negligible. The risk from non-payment of rent however due to this current situation is relatively high for me as two out of the three sets of tenants work in jobs which are almost definitely about to be ended imminently (whether temporarily or permanently, no-one can say at this stage). So that risk is tangible to me, now.

davidmcn said:

Do you need to do anything at the moment? Have any of your tenants said they'll have trouble paying the rent? You'd need to be pretty unlucky for them all to stop paying rent.

Yes, two out of three are facing complete loss of income. That's the reality, not just theoretical and premature fears.

Lover_of_Lycra said:
That constitutes starting eviction proceedings? Would issuing a Section 8 even though you know you can't do anything with it in the immediate future be enough to satisfy that condition? 

As I read it this morning, landlords will not be permitted to issue eviction notices to tenants who are/will be non-paying due to provable Coronavirus reasons.

I called my insurers this morning. Their underwriters are meeting this afternoon to discuss the rent guarantee policies so more information may be available by the end of the week.

Thrugelmir

goltho said:

Thrugelmir said:

Secure a loan against one of the properties to tide you through. Once the dust settles sell one of the properties and diversify your income sources. 

That's simply not an option for us. We're in our mid/late 60s and securing a loan is almost impossible. The few possibles I've seen incur expensive fees.

Then you'll need to cut your cloth accordingly. Lots of people are going to incur financial pain in the months to come. At least you've no mortgages to pay if your tenants are unable to pay their rent. You yourselves at least have guaranteed sources of income. While your tenants are paying. Build some savings. 

Amirhere786

Landlords are not demons, we do not have money trees.Landlords main source of income is rent.If tenants don not pay we can also get in debt.This great 3 months of mortgage holiday will not help all landlords, they have many expenses, service charges, agent charges,insurance charges some pay utility bills to.We should be given help like a normal business, small private landlords are being made to look demons this is unfair.

Thrugelmir

Amirhere786 said:

Landlords are not demons, we do not have money trees.Landlords main source of income is rent.If tenants don not pay we can also get in debt.This great 3 months of mortgage holiday will not help all landlords, they have many expenses, service charges, agent charges,insurance charges some pay utility bills to.We should be given help like a normal business, small private landlords are being made to look demons this is unfair.

A tenant not paying their rent has always been a possibility. Anybody running such a venture should be aware of this before even starting. Having insufficient income or savings to at least tide oneself is major lack of foresight. No one is calling LL's demons. Help for business isn't going to allow all of them to survive either unfortunately. 

goltho

Thrugelmir said:

Amirhere786 said:

Landlords are not demons, we do not have money trees.Landlords main source of income is rent.If tenants don not pay we can also get in debt.This great 3 months of mortgage holiday will not help all landlords, they have many expenses, service charges, agent charges,insurance charges some pay utility bills to.We should be given help like a normal business, small private landlords are being made to look demons this is unfair.

A tenant not paying their rent has always been a possibility. Anybody running such a venture should be aware of this before even starting. Having insufficient income or savings to at least tide oneself is major lack of foresight. No one is calling LL's demons. Help for business isn't going to allow all of them to survive either unfortunately. 

Plenty of (ignorant) people regard landlords as pariahs. That's certainly the press's default position. Regardless of that, your instant generalisation is unhelpful at least, and judgemental at best. I can speak for myself and say I have had several lives and careers mostly involving being in business. If you include a global pandemic as a major lack of foresight in my case, then I plead guilty. Another World War would be a similar event. But given none of us - dare I say including you? - could reasonably foresee this, then what's your point? (NB: rhetorical question)

eLdn123

I have my own issues, so don't judge others, but what I do not understand is the idea of getting insurance companies to pay for such a loss., especially with how the legislation is worded.

The point of the government's position is that the 3 months are not rent-free, as eventually the money will be paid back. If a landlord claims from the insurance company unpaid rent ( which may be the case ), they could potentially receive from the insurance company the payout. Now 3 months pass, landlord discusses with the tenant, tenant is back in his or hers job, then agrees to repay the loss of rent. I am confused how a lot of people could find it fair that in such cases the landlord gets the 3 months rent from the insurance company, then again ( assuming the tenant is of good faith, which I believe the majority are ), gets another 3 months back from the tenant. If the insurance company would pay for your loss of rent would you pardon the tenants of the rent or still ask them for the money after the 3 months pass ? Would you just ask them for the deductible, assuming you would have to pay to file a claim ?

In cases of landlords which unfortunately rely on the income provided by the rent, in case of coronavirus, there may be other venues through which certain funds may be accessed. Indeed it could potentially be similar amounts as the SSP, so at the end of the day it may end up that landlords and tenants would live for a period of time on similar amounts. Let's not forget, we are all in this together now.

What I would do if I was in your position, I would secure a loan against the house with a reputable bank, for a small amount which I know I could cover  ( e.g 10 - 20k ), which I would cover upon receipt the rent arrears from the tenants, and then continue in a similar fashion, out of the rent profits. I don't think a bank would decline a house as a guarantee against a fairly small loan.

If anyone believes I am wrong in any assumptions made, please let me know.

goltho

eLdn123 said:

.... they could potentially receive from the insurance company the payout. Now 3 months pass, landlord discusses with the tenant, tenant is back in his or hers job, then agrees to repay the loss of rent. I am confused how a lot of people could find it fair that in such cases the landlord gets the 3 months rent from the insurance company, then again ( assuming the tenant is of good faith, which I believe the majority are ), gets another 3 months back from the tenant.

The existing arrangement with Rent Guarantee insurance is that the insurance company pursue the tenants for reimbursement directly. They also currently must be served with an eviction notice (Section 21, rent arrears) at the start of the second non-paying month, but that is no longer possible due to the new legislation. That's the dichotomy which the insurers must now deal with. So the way things appear to be moving forward, it's more likely that the tenants will be allowed to stay for a limited period, say 3 months, and not to pay rent, the landlord's insurance kicks in from month 2 (mine does anyway), and the insurer deals with the tenant directly for reimbursement as they do at present but without the eviction element. That's speculation on my part, but there's no question of the landlord receiving double rent.

And I agree from experience that most tenants are decent.

eLdn123

goltho said:

eLdn123 said:

.... they could potentially receive from the insurance company the payout. Now 3 months pass, landlord discusses with the tenant, tenant is back in his or hers job, then agrees to repay the loss of rent. I am confused how a lot of people could find it fair that in such cases the landlord gets the 3 months rent from the insurance company, then again ( assuming the tenant is of good faith, which I believe the majority are ), gets another 3 months back from the tenant.

The existing arrangement with Rent Guarantee insurance is that the insurance company pursue the tenants for reimbursement directly. They also currently must be served with an eviction notice (Section 21, rent arrears) at the start of the second non-paying month, but that is no longer possible due to the new legislation. That's the dichotomy which the insurers must now deal with. So the way things appear to be moving forward, it's more likely that the tenants will be allowed to stay for a limited period, say 3 months, and not to pay rent, the landlord's insurance kicks in from month 2 (mine does anyway), and the insurer deals with the tenant directly for reimbursement as they do at present but without the eviction element. That's speculation on my part, but there's no question of the landlord receiving double rent.

And I agree from experience that most tenants are decent.

Thanks for replying back to me ! I hope I didn't seem agressive, but I honestly did not understand how this works, and I myself have had some financial issues caused by gambling which am sorting through, and now hit even harder by the coronavirus outbreak ( tested positive ) . I will still pay my rent, later than the rent due date, and consider myself to try my best, and seeing a lot of posts or comments on articles from landlords assuming tenants will "steal and run" may have made me, mistakenly, take a personal touch.

goltho

eLdn123 said:

Thanks for replying back to me ! I hope I didn't seem agressive, but I honestly did not understand how this works, and I myself have had some financial issues caused by gambling which am sorting through, and now hit even harder by the coronavirus outbreak ( tested positive ) . I will still pay my rent, later than the rent due date, and consider myself to try my best, and seeing a lot of posts or comments on articles from landlords assuming tenants will "steal and run" may have made me, mistakenly, take a personal touch.

No aggression seen by me. Really sorry to hear you've been hit with the double whammy. I said above that we landlords generally get bad press; we also tend to moan or rant about bad tenants more than we enjoy talking about the good ones! It's human nature sadly. A default position of assuming tenants will steal & run is just as sad as assuming landlords are rich uncaring bar stewards. Keep well.

silvercar

I wonder if landlords who structured their business as a small company could get help through the government announcements of help for small businesses? I know that some landlords were doing this thanks to the changes in the tax rules on mortgage interest expenses.