Just received this request from my tenant. I too am self employed so in the same boat re finances. How do I respond. I have a mortgage on the property so can take a payment holiday but cannot afford for her to pay nothing!
heres what she says
As a self-employed Therapist I had not been able to work since the COVID-19 outbreak, in my case since Friday, March 13th 2020.
As you can imagine, I will be in financial difficulties and unable to pay the rent.Unfortunately I am therefore forced to kindly request a suspension of rental payments* until the situation improves.**
Advice very much appreciated
does she come under the goverment help for self employed? I would suggest half rent, but stress eventually she has to catch up
I have posted on here on a different thread but the same topic. Our tenants were very quick to ask for this rent holiday and send me a link to the government website advising them they are able to ask their landlord for a ‘rent holiday’ as they are self employed.
She did tell me they have applied for UC of which there is a LHA included. Our tenants have an interview tomorrow regarding their claim and I can let you know the outcome. ( I also have a friend who is a self employed hairdresser and she too, has put in a claim for UC.)
Perhaps you could advise your tenant to put in a claim anyway? The worse that can happen is that it is refused.
I also advised ours that we were in the same boat, whether or not that is the correct thing to do, I pointed out we were people too. I also told them it is not a ‘mortgage holiday’ for landlords. It is basically a loan on which interest will accrue thus increasing the debt on the landlord.
I also told ours to ask for a repayment holiday themselves on all their own credit/store cards, utilities and council tax. And I pointed out that they will be saving on travel costs and socialising and more than likely food bills also which should also go some way to reducing the pressure on their finances.
You could also politely ask if she could possibly get a small loan herself to tide herself over this time?
Whilst we all want to help wherever we can, the fact is, being a landlord is a job and the income received is being used to pay our own mortgages or rent. I was wondering if the landlord cannot pay their own rent, would they be able to claim UC? I don’t know for sure but think there is a question about owning a property which maybe ? exclude them being able to claim. If owning a property and not being able to claim, surely the landlord would be told to go and live in their own property, and will then have to ask tenants to vacate.
I would be interested to know how you get on.
It looks like we will all have to take the hit of this to a degree but try to minimise it as far as is possible. If a tenant has a good credit score there is no reason they cannot get a small loan. So much extra stress on landlords that on top of the worry of everything else, we are now so heavily responsible for our tenants.
P.S. is there anyway she could secure a temporary job? There are many jobs going for food delivery right now and there are always vacancies in care homes etc. As a therapist she has some relevant experience of dealing with people and their care needs which surely would be transferable to a slightly different setting.
(Our tenants have worked in food delivery but claim there is no work. Fathom that one.)
Thank you so much Mr T for your very detailed reply. There are some great points in there that I will address in a letter to her. I am also speaking to Which Legal team tomorrow so can let you know anything useful they have to say. Youre right when you say we are people too. It just seems shes so quick to jump on the bandwagon. I am self employed too so know what shes going through.
I look forward to hearing how you get on and Ill keep you posted this end.
All the best
Hi Mr T,
I doubt Landlords could apply to claim UC, since, whilst they have to complete a SA return each year, HMRC don’t class their income as from “trading”, so not classified as self-employed in the usual sense.
Hi Sue. Thank you. For landlords then no rent equals no income in this current crisis.
I run an insulation firm and am a builder and Landlord. I think Landlords will have to have other jobs as well , in order to survive. I have no mortgages so those with mortgages can be in cleft stick, whether I get help as a self employed I will have to wait and see but I will not bank on it
Useful advice from the government
Hello Mr T
The people at Which were not really of very much help except to say that the tenants are still liable for the rent they cant just not pay and make no arrangements with you . I actually ended up having a positive conversation with my tenant and she paid Aprils rent. I agreed to move her rental payment for May to the last day of the month instead of the first to allow her time to see what she can get in the way of help from the Govt and we are going to review nearer the time what she can pay. i hope your meeting with your tenants was positive too. Be interested to know how you got on.
Good luck and stay safe.
Sounds to me like her interpretation if a suspension could be a rental holiday. I think you need to quickly decide on a ”payment plan” that’s acceptable to you.
For self employed, the government have said that they will pay 80% of earning averaged over the last 3 years in June - I think it would be fair if she has no other money coming in to suspend payments until then and accept 80% of the rent owed at that time - effectively the government are paying you 80% the same way they are Self employed and PAYE earners.
Quite right Sue, rental income is considered by HMRC as purely investment income.
Hello Alison - I have a similar problem as yours where my tenant says she has been furloughed and cannot pay the rent. The issue is she is not willing to provide any proof of this ( including that she is not covered by the govt’s 80% salary cover) nor is she willing to engage in a discussion on repayment plan for any rent arrears. She just says she cannot pay rent and is protected by the government from eviction. Any advice/ suggestion?
keep a record of all discussion etc so when you can evict her you do so, if you know where she works you may be able to enquire if they are shut or if she is a con merchant
Thats very interesting Kathryn thank you for sharing. Fortunately my tenant paid in full for this month (due 1st but we had agreed she could pay when she had sorted funding. So thats good so far. Good luck to you and everyone facing this.
Thing about the payment holiday is having the interest stuck on your mortgage til the end of term!
We’re now in the business of acting as welfare officers and lenders. In any other situation someone could not afford to pay they would simply not get the service. Can you imagine driving into a petrol station, filling up and asking the garage for a payment holiday and that the fuel is essential in order to get to work? They’d just call the police! Whilst I sympathise with these people they should not be our problem, in the same way I would not ask one of my tenants to pay 50% more rent this month because I can’t afford the mortgage and I’ll pay them back at a later date - if I can afford to or I don’t bugger-off meantime! I’ve said it before, landlords have had a hard time financially and politically and get little sympathy, yet now we are expected to be helpful, understanding and benevolent. I’m willing to go someway to help, but only to the extent I can afford to.
So have people done? for a commercial tenant who could have carried on. I offered a 50% discount for the 3 month lock down and a 1/4 years rent deferral for 1 year but the tenant wants more and more and more and I think I have offered enough given a lot of their overheads have been covered by the government, or am I being evil mean landlord…they rent a few units off me and i suggested they give one up but no they want to keep it all rent free until things get better…
The government talk of rent and mortgage holidays did not help deliberately misleading to people who think it means free money for all when actually its free money for some but not self employed landlords…
When you say units do you mean commercial units?