UK Landlord Forum / Life

If the Government, in their wisdom, decide to "protect" tenants from eviction due to non payment of rent during the Corona virus pandemic then how long will it be before Landlords can realistically expect to receive any further payments..?

I know you don't know the answer, but have we just seen the green light go on for every tenant in the PRS to massively take the piss..?

I'm guessing Boris isn't going to pay the rent for them.. so how would you mange if the rent payments just stopped tomorrow..which I firmly believe they will..
And what kind of eventual repayment of arreaers do you think your tenants will be able to agree to and to keep up..

I'm guessing most of us just caught a cold.. Pun intended.

I would have thought that non-payment of rent (arrears are not caught up on) will, eventually, bite the tenants on the bum if they ever ask the LL for references.

However, if tenants suddenly stop paying rent citing C-19, rent protection insurance should cover that. But yes, I want to know how the government plans on paying the rent arrears for tenants if there is no rent protection Insurance in place!

I contacted my insurer (direct line) to see what the score is with Corvid-19 and rent protection insurance. They told me that the insurance only kicks in after a section 21 (or section  eight) notice has been served. However given the emergency legislation regarding eviction this would make the cover offered by the insurance a nuanced point. Reading between the lines, I really don't think they knew what to say as this is a rather unique situation, and my guess is they are going to look for a way of not paying out.

My assumption is that we can serve notice (not that I would in these circumstances!) - the government cannot stop landlords doing that! However they do control the court process that follows, so perhaps the way to deal with this IF we expect insurance companies to pay out, is to serve notice then let things play out with the courts while the indemnity cover kicks in.

Strange times

I had my first SMS this morning... from a Tenant who's locked down due to Corvin-19 (sic)... what I particularly liked about it was she said she didn't know how she was going to pay the rent and that I should reply with any solution. I replied quickly, reassuring her that I would not start any form of legal proceedings (Government says I can't, but I wouldn't anyway) so to concentrate on what matters, rather than fretting about this (I'm not so sure she is fretting, but - anyway - you have to play along)... I pointed out that the rent is still due - it's not a rent holiday - and if she is eligible for the 80% salary payments then the dust needs to settle there and then, at least, logic says 80% of rent could be due to stop things mounting-up. I said we'd need to then arrange a suitable repayment plan (one that emanates from her) when the time comes.

For me, this property is unencumbered so what I'm losing is pure income... there's no benefit (however dubious that benefit might be) to a theoretical mortgage holiday for me. I'm just down £500.

She started off her SMS by assuming I would have had a lot of such contacts... I pointed out to her that she was the only one. Childish, I know. But I did it in quite a nice way. I used a smiley.

What isn't clear to me - yet (because I've not looked into it) - is how people get their 80%... does it come into their bank account like normal pay, does the Government somehow automatically do it, do people have to start filling out forms and stuff... do employers have to do it on behalf of their employees... none of that is clear to me yet, because (heeding my own previous advice) I don't worry about things too much until they actually happen.

Employers claim, through HMRC..... once the bill actually goes through parliament and become law.

https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses#support-for-businesses-through-the-coronavirus-job-retention-scheme

Thank you; this is good news... any Employer (or, basically, any other person in the world) is likely to be more proactive than this particular Tenant is.

I initially thought I would only have one possible tenant affected (personal trainer) but now I am not so sure.There's an academic at the local university,hopefully in the public sector,a professional man on a 3 year contract of some kind,and two properties with charities who house vulnerable adults.I would imagine these two are safe for now,but take nothing for granted.
I gather that landlords with rent protection cover feel quite bomb-proof (a bit smug maybe?) but I am very cynical about insurance of all kinds.Does this not count as an act of God in anyone's terms, and not insurable?

I've never bought RGI... I've heard many stories of it not paying-out... and I will ride it out with savings if needs be. However, listening to the chat in the Commons this afternoon... there's plenty of talk of no fault evictions being 'banned' for many, many months... everyone is, of course, talking about the front-end... but no-one yet appears to be talking about the back-end.

So... a no fault eviction ends up being banned if a person doesn't pay rent, because they couldn't get any income... because of being let go from work... because of a virus... all that now seems to amount to no fault. Forget the fact that a person might've had savings or what-have-you (like I have managed to)... non-payment of rent is considered no fault now (special circumstances) whereas before it would never have been, obviously. Yet, the rent remains due... it hasn't been forgiven, or paid by some benefactor (like Her Majesty's Government - also effectively us)... so Landlords are offered the same kind of interest-bearing mortgage holidays as people do who have a mortgage on their own home. Fantastic. Who pays the interest?

And if you have no mortgage? What then? Your income has just disappeared... just like the Tenant's income has disappeared... but you aren't in-line for any form of relief, or so it seems. I have not pondered all this in any great detail, yet... because the worst might not happen and it may be a single tenancy for me. I have tried to rank my Tenants... I suspect at least another one will be setting themselves up to take this route imminently (their rent is due on the 3rd).

If one of two rental properties is empty and on the market, and the other 50% of your income stops when the tenant can't pay, then by my calculations you're screwed.. No mortgage on either, not much chance of the sale proceeding ( Who actually would lend, or even borrow in the PRS now ? but that's another Horror story...) and no income, While the Council Tax, Insurance and utilities bills arrive, closely followed by the Insurance and Legal appointments.. Maybe I could be forgiven for thinking about it a while ago.. What I could do with is some ideas of how to react to non payment without sounding too psychotic....

It seems reasonable, to me, that if a Tenant claims they cannot pay rent due to Covid-19 then, for the vast majority of people, there is a safety net in place whereby they should receive 80% of their income (yes, I have not yet figured out all the mechanics and the possibility of any delays etc.) so if a Tenant isn't willing to then pay 80% of the rent due then that would immediately tell you what kind of situation you have on your hands. I have asked my non-paying Tenant if they've contacted their Employer about this yet... no response yet... but I am struggling to find out anything regarding whether the 80% just lands in their account as normal pay would (same source, same date) or whether it comes directly from HMRC (I'm doubting this from what's been said) with a delay.

So... at the moment... I think that if a person's Employer (one who intends to retain them) has done what they're supposed to then an Employee should receive at least 80% (as the Employer can top it up, of course) of their pay in the same way as they usually do. All of this remains to be seen, though. I will post more if anything interested happens in my personal situation. However, it's not top of my own list, you see?, as I have (unlike so many other people out there) managed to save through being tough on myself... and not always living in the moment.

I've found some specific Shelter and Gvt links about rights here in case they are of use: https://www.gov.uk/government/news/complete-ban-on-evictions-and-additional-protection-for-renters and https://england.shelter.org.uk/housing_advice/coronavirus - however I see no mention of landlords who will not benefit from the mortgage holidays. Will keep an update and post if I see anything more specific - lots of clarification still required

Quote from: Hippogriff on March 26, 2020, 09:17:57 AM
but I am struggling to find out anything regarding whether the 80% just lands in their account as normal pay would (same source, same date) or whether it comes directly from HMRC (I'm doubting this from what's been said) with a delay.

It's a support for businesses to help them pay their employees wages so they don't have to lay people off. So from an employee's pov, it's just their normal wages (maybe with a cut).

My current tenants seem to be reasonably honest people (fingers crossed) I don't think it would be at all unreasonable though to request some proof, such as a letter from their employers, confirming that they are laid-off.I would in theory be prepared to share the 20% loss of wages as a last resort,for a trial period.I am not Lady Bountifull, but no one is going to be moving much now,so I would be better off losing some rent than having a void.It's hard getting good reliable tenants,so they are worth hanging on to.I am certainly not going to jump the gun and offer anything unless I am approached.I would expect them to borrow from other sources,or cut personal spending, before they bother me.Hate negotiating of any kind,dreading it.

Quote from: heavykarma on March 25, 2020, 01:09:22 PMI gather that landlords with rent protection cover feel quite bomb-proof (a bit smug maybe?) but I am very cynical about insurance of all kinds.Does this not count as an act of God in anyone's terms, and not insurable?

Email in from Direct Line this morning, regarding some standard Landlord policies I have with them...

"Rent guarantee cover

Some of our landlord customers have rent guarantee cover, so we want to provide clarity on this. The Government have looked to provide some stability for both tenants and landlords in these uncertain times, announcing that no tenant will be evicted during a three-month period and if necessary, landlords are able to apply for a three-month payment holiday on their Buy to Let mortgage. These announcements remove the legal mechanism to take a rent guarantee claim forward and so no new rent guarantee claims will be paid for the next three months."

Still very carefully and quite deliberately ignores those Landlords that have a property let out without a mortgage... one thing (that has a good chance of happening) is linked to another thing (that might not even exist).

Quote from: heavykarma on March 26, 2020, 02:10:47 PMI would in theory be prepared to share the 20% loss of wages as a last resort,for a trial period.

Why would you contemplate this? Aren't you possibly setting a dangerous precedent for all of us? Allowing an 80% payment with the rest considered arrears (to be paid off in good order, reasonably and sensibly) is all well and good, but accepting the 80% as full and final rent payment could be sending quite the wrong message that Landlords are there to bail Tenants out... when we aren't. Unless absolutely millions of people die off, and then there's not so great demand for rental properties, then your property is still worth what it was before. Allowing a partial payment of 80% would be understanding because we realise that so many people operate so close to the bone these days, and seemingly cannot save (to save their lives), but going past that means you are shouldering the burden of Society / Government and a Tenant's own inability to live within their means and accumulate savings for a rainy day.

This will all come out in the wash, but I would hope (possibly I am crackers) that any rental debts aren't just forgiven by The System at large when we come out the other side. Anyone feel a big RESET coming?

I'm not one for hyperbole.

I would do everything to avoid having to do this,but being pragmatic,the type of tenant who cannot manage on savings for a couple of months or so is unlikely to be able to clear arears easily.If I agreed to reduce rent  by 10% for an agreed period,say 2 months,enabling them to stay put and keep a clear credit rating,surely that is a reasonable compromise? All things are only worth what you can sell them for,some flexibility is needed.The question for me would be is the tenant someone you would happily allow to stay, had this never happened. Also, I would not be at all surprised if an amnesty was called on  some rent arrears.

I don't currently use any of the rental income,having always concentrated on clearing the mortgages,but I do appreciate that some landlords are reliant on the income,and I do  not envy them.My hairdresser has a salon in a development housing several businesses,including that of the accountant who owns the whole building.He emailed them all last week telling them to cancel their direct debits until it's business as usual.He does not want to lose them for good.

I would welcome the forum's advice. I started renting my house out in January 2020 (after the sudden death of my husband) therefore I'm a novice Landlord. My property is being managed by an estate agent and I received an email today, Friday, 27 March 2020 to inform me that my tenants have lost their jobs due to the Coronavirus Pandemic and they are going to have difficulty in paying the rent. I have landlord insurance, etc. but I've asked my property management to request proof from my tenants that they have indeed actually both lost their jobs and that they are not simply jumping on the 'Coronavirus Pandemic band wagon'. My question to you is that, due to more stringent data protection laws, can I actually request this type of proof from my tenants? It goes without saying that I will definitely feel more sympathetic to their plight if I see some evidence backing up their unemployment claims hence why I would value your advice.

Fact 1: You cannot evict them at this moment in time.
Fact 2: Having trouble paying the rent doesn't necessarily equate to not being able to, or at least some. I would be asking about savings, help from family and friends etc..
Fact 3: As it stands today... the rent is still due... it's not a rent-free time.
Fact 4: If the Tenants had been kept on, then it should be the case that they get 80% (or more) of their salary, via Government.
Fact 5: If the Tenants have actually lost their job then it is reasonable to ask for evidence of that, of course, but they should be moving forward their Universal Credit claim ASAP.

For 5... if I could see evidence of that claim moving ahead, then this should allow them to pay the rent... but it will then become a matter of time. Usually, you might decide to evict anyway... but now that avenue is removed. So it's not like you have much choice.

Landlord Insurance is not, necessarily, Rent Guarantee Insurance (but it can be)... and there is no guarantee that Rent Guarantee Insurance will pay out.

Dear Hippogriff, thank you very much for your detailed reply. When I requested proof of unemployment from my property management company (i.e. estate agent), they confirmed that the tenants have applied for Universal Credits and they (the tenants) also asked to change the date of the rental payment from the 1st of the month to the 22nd of the month (apparently to fall in line with the date when Universal Credits are paid out). My concern is that they won't receive anything near the amount of money they need in order to pay the rent of £1,500/month. 

I did not realise Universal Credit had a standardised pay-out day... one of my Tenants has a 'pay-day' of the 11th of each month, that much I'm sure of (because it comes directly to me).

My Tenant on Universal Credit even considers it to be "when I get paid"... go figure.

There was something on the radio saying the huge rush of new applications for UC would overwhelm a system that is already failing to function efficiency.Happy days.

I figured that the date of the 22nd of the month coincided with what should be their first Universal Credit payment (or is that just wishful thinking on my part). Also, by asking to move the rental payment date from the 1st of the month to the 22nd of the month, are they trying to gain 3 weeks 'rent free'?

Quote from: Hippogriff on March 30, 2020, 03:18:25 PM
I did not realise Universal Credit had a standardised pay-out day... one of my Tenants has a 'pay-day' of the 11th of each month, that much I'm sure of (because it comes directly to me).

It's basically the day of the month they made their application.