Money Moral Dilemma: Should I reduce my furloughed tenant's rent?

gloriouslyhappy

"crmism said:

Landlords can count their blessings if they have trouble-free tenants who pay their rents promptly and comply with the terms of their agreement in full .... many other landlords who often find themselves spending their own money in court trying to recover unpaid rent and the costs of damage to furniture and fittings."

mrpunk50 said:

.. landlords are parasitic vultures. You artificially inflate the housing market in order to keep a monopoly on property and make profit off the fact that others cannot afford to buy. 
In an ideal world, the vulture class of private landlords would be extinct.

In an ideal world, the government wouldn't sell off social housing, there would be controlled rent rates, tenants would pay their rent on time and not trash the place, and landlords would look after the property well and be able to evict tenants in a timely fashion if they didn't pay their rent, trashed the place or behaved in an anti-social maner causing hardship to their neighbours.

However this isn't an ideal world, and some landlords - these 'parasites' as described by some - suffer enormous hardship caused by tenants. The police do nothing as it's considered a civil matter, and there's no landlords' benefit like there is housing benefit to help when they're owed thousands by rogue tenants who can happily go on to new places with absolutely no redress for the suffering landlord. Where's the justice in that?

In this dilemma, I think the landlord should talk to the tenants and see just why, with £2500 gross salary plus husband's pension, they think they deserve a rent reduction. After that, based on tenant's situation and landlord's own situation, a decision can be made. There will be many savings to be made by the tenants on not going in to work, plus Martin Lewis says: If you're working from home, you can claim tax back on additional home expenses.

So I wouldn't rush to grant this requested discount. Just yet.

gloriouslyhappy

bvulc said: " As an alternative you can always go down the route of reducing the rent and apply for the 3 months mortgage holiday ... this way everyone is happy. "
Well, not quite. The mortgage holiday is not free money for the landlord, they still have to pay all that money, just at a later stage, and with interest as well. Reducing the rent only makes the tenant and the mortgage company happy, leaving the landlord out of pocket. What would be better is if necessary, reduce the rent temporarily with an agreed repayment plan eg 10% backlog added on to the rent in say 6 months time until the arrears are paid off.

HolisticHealth

No you are not being mean.  If they can afford it given the circumstances, why should you take a loss?  The 25% rent savings they are trying to make must surely be off-set by reduced outgoings.  What is the worst that could happen if you say no (I hate to be callous but they aren't exactly in a position to move)?  If you say no, be kind and explain where you're coming from.  If you say yes, perhaps reduce their payment by 10% rather than 25%...

WinterSoldier

Wow. It's interesting how that line of what can and can't be afforded moves for different people. Like many others on this thread, I pay nearly the same amount in rent and certainly don't earn that much a month.
My two cents is that, no - you're not being mean if you say no to this. It's your call.

brokenclock

jazzert1000 said:

I'm a landlord and currently I am owed 60% of my rent for this month.

I have spoken to my very good tenants and assured them that we will get through this difficult time together, but I have made it clear there will be no rent reduction overall.I am more than happy to work out a financial package that makes sense to both parties in the short term to ease their current cash crisis.I have also made it clear that it has to work for everyone.

Most reasonable people would agree that paying rent is a priority for anyone, it's  an essential.

Sadly I think tenants believe the hype about mortgage holidays and think they are free, but like every holiday the inflated interest rate Bill's will be there to pay in a few months time,

leading to a bigger headache for both parties.

I would insist on full rent perhaps over a longer time period.

I'm absolutely amazed that you think speaking to your tenants to say "we'll get through this together but I'm getting all my money from you" is remotely reassuring or commendable.

For all you know your tenants could be stressed at the potential they may be out of work in a few months time in a dire economy with little prospect of getting a new job. The next several years could be more difficult that the recent financial crisis and many tenants are making rational decisions to try to lower their outgoings, including rent.

brokenclock

impuzzled said:

I'm an older landlord, I was told as a young teenager that you should have a little cash saved for that rainy day. Unfortunately younger generations have not have that kind of mentoring, and spent their spare cash with Easy Jet and leased cars etc. Now the wheel has come off, some people are looking to blame others.
Understandably that on low paid work it is difficult to save, asking for what amounts to 3 months holiday from paying your rent is a bit much when the landlord has probably had to take a mortgage out, or  spent their savings to but a property to rent out to enhance their retirement income.
A 25% temporary reduction on £750/ month for 3 months amounts to  £562.50. 

When you were in your twenties, how many times average earnings did the average house cost?