FAO Landlords - Your experience/advice during Coronavirus with existing tenants

syncopix

Hello all.
I'm a landlord with a few long term (20+ year) commercial leases. One of my tenants has reached out to me to say they've been forced to close their takeaway business because of the current situation regarding the COVID-19 pandemic. I'm not in a position to be able to verify this but it's not an unreasonable claim and I did expect my tenants to ask for some assistance during this difficult period.

I made an offer of reducing the monthly rent by 50% and reviewing on a month-by-month basis but I attached one condition that I would like any money owed to by repaid in full before 1st April 2021 and that no interest will be added. The 50% reduction equates to approx £625pcm. Obviously I'm not aware of their financial situation but even so to me this seemed reasonable. They don't appear to have received my offer too well and what I want to avoid is any conflict going forward. It's a very delicate and tricky situation for both landlords and tenants.

What are other landlords in similar situations doing? I know it's a very ambiguous question to ask. Does anyone have any advice for me?

Regards,

chrisw

One of my tenants is a taxi driver and they have said they can't pay anything for a while until he returns to work.

I cant do anything about it, however, I will expect them to come up with a repayment plan once he's back at work. I suspect it will take them well over a year to repay the missing money at a reasonable extra monthly payment so I'm half expecting to write at least some of it off. 

They have been good tenants up til now so I'm prepared to cut them some slack for now.

Crashy_Time

syncopix said:

Hello all.
I'm a landlord with a few long term (20+ year) commercial leases. One of my tenants has reached out to me to say they've been forced to close their takeaway business because of the current situation regarding the COVID-19 pandemic. I'm not in a position to be able to verify this but it's not an unreasonable claim and I did expect my tenants to ask for some assistance during this difficult period.

I made an offer of reducing the monthly rent by 50% and reviewing on a month-by-month basis but I attached one condition that I would like any money owed to by repaid in full before 1st April 2021 and that no interest will be added. The 50% reduction equates to approx £625pcm. Obviously I'm not aware of their financial situation but even so to me this seemed reasonable. They don't appear to have received my offer too well and what I want to avoid is any conflict going forward. It's a very delicate and tricky situation for both landlords and tenants.

What are other landlords in similar situations doing? I know it's a very ambiguous question to ask. Does anyone have any advice for me?

Regards,

Contact Gov/Local authority and see what assistance/compensation is available first, before you make any deals IMO, and ask the tenant to do the same,many many people are now in the same situation and government have basically been saying they are going to backstop everything? Time to see if they can deliver IMO.

FreeBear

chrisw said: One of my tenants is a taxi driver and they have said they can't pay anything for a while until he returns to work.

Depending on the total household income, he may well qualify for Universal Credit. In which case, that would pay some of the rent.

A_Lert

Depending on how long the Covid-19 restrictions are in place for, your tenant could be left with in effect a massive rent increase from when they reopen for business until your April 2021 date. I can understand that they might be cautious about accepting.

Murphybear

The government has promised financial help for many of those affected.  I understand that the UC system is in meltdown with so many new claims all at once.  It’s possible people will have to wait even longer to get the first payment.  

JayRitchie

FreeBear said:

chrisw said: One of my tenants is a taxi driver and they have said they can't pay anything for a while until he returns to work.

Depending on the total household income, he may well qualify for Universal Credit. In which case, that would pay some of the rent.

Not sure - doesnt the OP indicate it is commercial tenancy for a takeaway business?

IAMIAM

This is where landlords and employers need to take the lead, that is what the government is asking, stop penalising. 

hb2

JayRitchie said:

FreeBear said:

chrisw said: One of my tenants is a taxi driver and they have said they can't pay anything for a while until he returns to work.

Depending on the total household income, he may well qualify for Universal Credit. In which case, that would pay some of the rent.

Not sure - doesnt the OP indicate it is commercial tenancy for a takeaway business?

The person who mentions the taxi driver is not the OP.

[Deleted User]

IAMIAM said:

This is where landlords and employers need to take the lead, that is what the government is asking, stop penalising. 

He has taken the lead by offering a partial payment holiday. The rent due is not a penalty. 

steampowered

It does depend a bit on the circumstances. You also need to think about whether your tenant is credit worthy. If the lockdown goes on and you ask for full rent, the likelihood is that the takeaway will declare insolvency. Takeaways are generally low margin businesses and don't generate enough cash flow to pay what is in effect additional rent from the end of the lockdown to APril 2021.

You won't be able to re-let takeaway premises in this environment so if the tenant does declare insolvency you'd end up with nothing.

Your offer sounded reasonable to me, I think it is up to the takeaway to explain their financial situation and make a counteroffer.