Coronavirus? Let's be good people

Landlord Discussion
1

I have two flats,both tenants work in the leisure industry, pubs with restaurants.
My first hope is that they both stay safe, but on another note it occured to me that they may be very vulnerable to being laid off as things develop.
In the grand scheme of things,peoples health is paramount but on a practical note will banks and lenders be prepared to adopt a flexible approach to mortgage payments? Personally I am willing to be flexible with rent payments,as I am in control of them but I hope lenders will adopt the same pragmatic approach.
No caring person would want to make this crisis worse but we do need Councils, Government and banks to walk the walk not feed the press PR rich soundbites.

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2

Hi. From the small amount I have heard, I believe mortgage companies are meant to be sympathetic to self isolators. But will this mean they are also sympathetic to landlords who have tenants that are self isolating and can’t pay? I have no idea and was wondering the same. I read briefly that tenants have started a petition to the Government that if they have to self isolate then they should not have to pay rent. Does anyone know if there have been any developments in this?

3

If it comes to it the banks could impose a moritorium on mortgage repayments.
Whilst not sustainable for a long period surely that would be a sensible initial position.

4

Exceptional times call for exceptional measures, so I won’t be taking any action against any of my tenants during this moment of crisis. Decency must trump money in this critical moment for all.

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5

this is why those who have been prudent with their money over the years, will not be as worried as those who have spent their money on ciggies , drink and gambling ( cat amoungst the pigeons ?)

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6

The Italian government already set out a possible 3 month deferment on mortgages, unlikely that UK would follow suit. Not by the way they have handles this so far.

7

I don’t have a mortgage on my rental property, so any deferment of mortgage payments that the banks and building societies may give, won’t assist me . The rent on my property supplements my state pension. I put my savings into property for this reason. Worrying times for all.

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8

You can get rent insurance - up to ÂŁ2,500/month for 18 months only cost me ~ÂŁ90/year. I got it through OpenRent.

9

WIll the Rentguard insurance pay out if tenants default due to Coronavirus?

I’ve seen draft legislation that suggests tenants who don’t pay rent between March and Sep this year due to coronavirus will not be able to be evicted or chased for arrears until Dec 2021.

10

There will be a 90 day period of wait for you to be able to claim if not done from the start of the policy!

11

I am fortunate not to have any mortgages but I understand that a 2 month allowance has been made due to the crisis. I expect possibly 2 of my tenant may be stood down for a while. They are excellent tenants and I am happy to freeze the rent temporarily for at least 2 months then by ear. Its a no fault situation and if we can we need to support good tenants.

12

I’m offering rent holidays to those tennants affected and discuss recovery package when all over.

Some are topping up benefits so its only the top up that needs a holiday.

Early days on the scope and impact of this, but I fortunately can cover the gap for some months.

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13

Hi all, just wanted to share this guide to the measures produced to help tenants and landlords so far:

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14

Hi Sam. I am not sure I quite understand the new feature to “pause rent reminders”. How does this help landlords ?
If a new temporary reduced rent is agreed with both parties how are landlords protected against this becoming permanent ?

15

Hi Steve,

Our rent collection service usually chases tenants who don’t pay the full rental amount. If tenants and landlords have already agreed an alternative arrangement, then pausing the rent collection chasing messages means the tenants won’t receive one set of message from the landlord about their new agreement, and a conflicting set of messages from OpenRent chasing them for full rent.

Meanwhile, it will keep a record of any (possibly reduced) payments that are made. That will make it easier for landlords and tenants to keep track of how much rent can be put into any future repayment plan once the pause period is over.

You’re right to raise the question of best practice rent reduction agreements. I have sought expert guidance on this ans will hopefully have a guide for landlords soon. For the moment, we think phrasing it as a rent payment plan is the least risky way to do it. I.e. instead of saying “the rent for the next three rental periods is halved”, it is phrased more like “the rent for the next three rental periods is the same always, but multiple payments can be made, incuding payments made at some point tbc after the usual due date”.

One particular thing to look out for is that the Tenant Fees Act made it illegal to charge more in a later period than an earlier one (as otherwise it’d be an obvious tenant fee loophole). It’s unlikely a tenant who benefitted from a rent holiday would try and get their landlord fined by invoking this, and unlikely they would succeed in doing so, but it’s something to be careful of.

It’s complex and moving quickly, but hopefully we will get a guide out asap.
Sam

16

Is it too complicated to inform OpenRent of the temporary change so the usual (very good) rent collection is maintained ?

17

Thanks again.
I appreciate the way you word an agreement can be crucial. We do need to be mindful of the pitfalls of charging reduced rent and then finding it is actually illegal to enforce a repayment plan that bumps it up higher than it was before. I am sure this is not widely considered when caring, scrupulous landlords are giving payment holidays willy nilly. Thanks goes to all the unscrupulous landlords that caused this ruling to be introduced !
I want to offer financial support to my tenants but not to my own detriment. Same applies regarding the mortgage “holiday” being bandied around. I have always had access to this feature but would never use it unless desperate as interest will still be charged on the “holiday” periods, thus compounding the interest and ultimately increasing the cost and/,or length of the mortgage even if you pay it back at the end of the break. At least the mortgage companies seem to be confirming that deferred mortgage payments will not affect credit score.
Clear guidance will be very welcome. I am not contacting my tenants until that is available.
Thanks for all your efforts, btw

18

So the thing I think is really great about the Rent Collection pause is that you don’t even have to tell us about any agreements you make. The tenant can continue to pay any amount you have agreed to us as usual. We’ll record it, pass it on to you the same day as usual. Then, when you wish to return to the normal rent amount, you will know how much has been paid and how much would have normally been due: i.e. you can easily see the shortfall. You can then either:

  1. tell us that the amount does not need to be paid, or
  2. can keep the rent collection emails paused until the shortfall is repaid, at which point you can unpause the emails and continue to remind and chase tenants for rent as usual

A solicitor has agreed to produce a guide to writing a temporary rent change agreement by early next week, so hopefully we’ll have it by then.

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19

I am in a similar situation but on chatting to the tenants I was worried about I discovered thatuber eats etc are upping their game and they are remaining in business. As for mortgage companies being ‘generous’ at the moment this is residential customers only.

20

That is great Sam Thank you.