UK Landlord Forum / Life

I have an excellent tenant.
He is a single father of 5 children who live with him at the property.
The rent is paid by him claiming Housing Benefit.
He has been told by the council that they are now reducing his payments due to 'cut backs'. Is this happening everywhere?
He is now no longer able to afford the rent.
I want to keep him as a tenant and am willing to reduce the rent to achieve this. Is there anything formal that I need to do to reduce the rent, any official forms that need to be served/signed?
Thanks,
Matt

Hello Matt,

If your tenant's rent is being funded from his HB / LHA allowance: I thought the 10% reduction to anyone unemployed for more than a year was not coming in until 2013.  I'm not aware of any other changes.

Do you know for certain thet LHA is his only gvernment income?  Or could it be that one of his children has grown up and is no longer getting Child Benefit?

I would advise you to ensure this reduction in benefit is genuine.  There is a standard form to increase the rent.  You could fill than in with a negative increase?  Or it could be easier for you both to countersign a simple letter of intent saying you've mutually agreed to a lower rent.

Hi Matt

That's quite a predicament you have there.

Are you currently in a fixed agreement with the tenant? If so, I believe you have to wait until the agreement expires. Once the agreement comes to the end, the only official way of doing this would be to issue a new tenancy agreement at the new, lower rate. Things like mutual agreements and section 13 notices only apply to increasing rent.

Another way is to verbally agree with the tenant and simply start to accept lower rent at discretion, however it would leave the tenant in a very vulnerable position. For example one day you could turn nasty and claim he has been paying you less rent since 'the date', and possibly claim for loss of rent.

That is just my understanding, if anyones wants to correct me, feel free.

Jeremy I thought about that to but pretty sure the section 13 would not be enforceable for a decrease in rent.

Hello Mr X,

I've had a quick refresher read of the legislation.

The format of the notice is for the landlord to re-state the existing rent with the rent that will apply after the rent review.  The form is constructed to vary rent up or down, not just increase it.

Bizarrly enough, where Matt could come unstuck from an "anally attentive attention to detail of the law" kind of way is in the amount of notice he gives to allow the rent to reduce.  Depending on how long the tenant has been in situ and if he's in a contrct or periodic, he could have to give the tenant quite a long lead in time to "legally" reduce the rent.

But the reason these clauses are in statute is consumer protection from rubbish landlords who try to put the rent up often and for unfairly high amounts.  If, for a bizarre reason, an agreemtn to reduce the rent went before the court to asses its reasonableness on this technocality: I thik the court would ratify it.  It is a matter of mutual will between two consenting parties and the principles behind the legislation have not been breached, quitet the opposite, Matt is helping a consumer the legislation was designed to protect.

So now I'm more convinced a negative rent increase on a Section 13 notice will be acceptable to everyone.

But happy to take your opinion and experience.

hmm yes I see what you mean. I must say it is a bit of a grey area but you do make some good points. Just goes to show how rare this situation is, where a landlord willingly reduces rent. 

Hi Mr X,

I'd guess the last time we had market / economic dynamics to reduce demand for rented property to such an extent that rents nominally reduced (rather that staying static whilst inflation removed their real buying power value) would have been in the eighties which would have pre-dated my involvement in the industry.

Does anyone out there know if we've had falling rents more recently?  Any economists out there who know the maket dynamics?