Tenant can't afford rent - proof?

holschubes

We received a text message last night from our tenants simply saying that due to covid19 they can not afford to pay the full rental amount and can only pay half....as landlords are we able to ask for proof of this? Last year we knew that the tenants were employed as a Care Home Manager and a Care Assistant, we had learnt that the care home they both worked in had been shut down but we did not question our tenants as we decided as long as the rent was still being paid then that was all that mattered, so currently we do not know what their employment status is or where they work, but they have had no problem paying the rent up until now. The government are helping people and with furlough are paying 80% of peoples wages, am I correct in thinking this? Surely as landlords we have a right to ask our tennnts for proof of why they can't pay the full rent. Our first question back to them was "Have you lost your jobs?" and are yet to reply. It's a stressful time for everyone and as landlords we are very understanding of the current situation but where does it leave us. I know we can ask for a mortgage holiday period but still, I would like proof of why they can't pay.
Many thanks.

[Deleted User]

Yes definitely ask for proof. Care homes are still open so unless they have both been unlucky again they may be taking advantage 

Mickygg

What proof would you be looking for though? A bank account with no money in it? Proof of job loss but wouldn’t say if they got another one?

Maybe look at it another way, if this current environment isn’t it better to get something than nothing? If they turn round and say they can’t pay anything then what will you do...

hazyjo

holschubes said:

The government are helping people and with furlough are paying 80% of peoples wages, am I correct in thinking this? 

They're only paying up to £2500pm per person. So it depends what they were earning as to how far out of pocket they are.

Rent should be considered a priority bill, so it's a bit worrying if they're saying they can't pay that already. I'm betting they just want a few months of not having to pay, prob thinking you're getting a few months off the mortgage.

Maybe offer them one month free and see when that takes you with them? If you're happy to lose them, don't do a deal.

afis1904

There's no proof for this sort of thing but there's also no reason why you shouldn't believe them.

knightstyle

Also think about how this will work  Will the not paid half be stored up as debt to be paid back later or will you just make a new contract for reduced rent? 

davidmcn

hazyjo said:

holschubes said:

The government are helping people and with furlough are paying 80% of peoples wages, am I correct in thinking this? 

They're only paying up to £2500pm per person. So it depends what they were earning as to how far out of pocket they are.

It also requires the cooperation of the employer, rather than being something the employee can demand. Some people have simply been made redundant, or don't qualify for furlough. 

MoneySeeker1

I'd be checking the local job vacancies personally to see what the odds were of them getting equivalent other jobs. 

There does seem to be a lot of advertising of vacancies currently by health authorities (ie the same sort of job) on the one hand and supermarkets needing extra staff for the duration on the other hand.

So I'd be surprised if there weren't job vacancies there they could apply for if their existing jobs have really gone - and I would want proof, in your position, they were asking for those vacancies before I considered whether to let them off their responsibilities.

They may be genuine (after you've checked on them for this).

 They may be one of those households that normally have enough spare income they can save (but they chose to blow it on consumer spending) and it's their fault they don't have savings (as the chance was there).

 They may just be thinking "Lots of other people are having a long break from work - so why shouldnt we?" and have chosen that option rather than take personal risks (and have instead preferred to risk your finances v. their health/wish for a break from work).

I'd analyse all those things in your position and see if they were taking the michael or genuine before I made my decision.

lisyloo

_shel said:

Yes definitely ask for proof. Care homes are still open so unless they have both been unlucky again they may be taking advantage 

Unless they get COVID19 when unfortunately it’s game over for a lot of the residents. 
Im not sure what happens but I would imagine new residents are not being discharged to care homes with COVID19, so I guess they have to wait until they are empty and then deep clean and start again.
some may go bankrupt if they are not allowed to fill their rooms.

but not point speculating there needs to be a conversation to find the facts.
one argument is that half rent is better than none 
another is that good long term tenants are worth keeping but I certainly think it’s reasonable to ask more.

i would not have sent “have you lost your jobs”, something more like “I’m really sorry to hear you’re having a hard time, this is a difficult time for many people. I would like to understand a little more about your situation so that we can come to the best long term arrangement. Can we fix a convenient time for a chat?”

anselld

Given that you have no recourse to any action for at least 3 months I would be inclined to accept at face value but remind them that they will be building up arrears which will need to be repaid when things return to normal.  You need to be clear that you are accepting delayed rent, not reduced rent.

Comms69

holschubes said:

We received a text message last night from our tenants simply saying that due to covid19 they can not afford to pay the full rental amount and can only pay half....as landlords are we able to ask for proof of this? Last year we knew that the tenants were employed as a Care Home Manager and a Care Assistant, we had learnt that the care home they both worked in had been shut down but we did not question our tenants as we decided as long as the rent was still being paid then that was all that mattered, so currently we do not know what their employment status is or where they work, but they have had no problem paying the rent up until now. The government are helping people and with furlough are paying 80% of peoples wages, am I correct in thinking this? Surely as landlords we have a right to ask our tennnts for proof of why they can't pay the full rent. Our first question back to them was "Have you lost your jobs?" and are yet to reply. It's a stressful time for everyone and as landlords we are very understanding of the current situation but where does it leave us. I know we can ask for a mortgage holiday period but still, I would like proof of why they can't pay.
Many thanks.

You can ask, but they arent obliged to provide it. You arent obliged to agree, but ultimately your method of enforcement isnt available at the moment.

Whilst you may not have meant it this way, what do you mean you didnt question your tenants when the care home closed? Were you going to offer to help? Because the alternative is that you feel that you are entitled to be involved in their lives? You have no right to know where they work or what they do.

The 80% is not as simple as that. Ultimately you have no say in this. Accept the rent will be halves and move on.