# Landlords and temporary Rent reduction



## Bluebird (17 Mar 2020)

Is there a way for landlords to help out tenants who are struggling at this time by giving them a temporary rent reduction?
Without then being stuck way below market value in a rent pressure zone when all of this eventually ends.

Any ideas or advice appreciated.


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## noproblem (17 Mar 2020)

Bluebird said:


> Is there a way for landlords to help out tenants who are struggling at this time by giving them a temporary rent reduction?
> Without then being stuck way below market value in a rent pressure zone when all of this eventually ends.
> 
> Any ideas or advice appreciated.


Good question because of where we are and yes, I do feel the tenant needs to start having a chat with their property owner about what you're suggesting if they find themselves in trouble.The wheel is turning and there could possibly be 350,000 people out of a job by the weekend. This time there won't be tenants lining up to rent the properties.


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## Thirsty (17 Mar 2020)

If I'm asked, I'll do what I can; but I have bills to pay too.


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## Paul O Mahoney (17 Mar 2020)

I just hope that this isnt abused if introduced yes people will need assistance if they are laid off and should be helped. 
But as a landlord I would need proof of the change of circumstances.
Cant see that going down well.....


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## Paul O Mahoney (17 Mar 2020)

noproblem said:


> Good question because of where we are and yes, I do feel the tenant needs to start having a chat with their property owner about what you're suggesting if they find themselves in trouble.The wheel is turning and there could possibly be 350,000 people out of a job by the weekend. This time there won't be tenants lining up to rent the properties.


And where do you think these people will go? Even 10% of 350000 is 35,000 people looking for new accommodation would create demand.


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## noproblem (18 Mar 2020)

Paul O Mahoney said:


> And where do you think these people will go? Even 10% of 350000 is 35,000 people looking for new accommodation would create demand.


To tell you the truth I think they'll stay where they are, won't be able to pay and create a situation whereby the property owner will have to spend a hell of a lot to do something about it. Even then, they still have to get housed by ? Will the situation be abused? You can bet your bottom dollar it will be.


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## Ger1966 (18 Mar 2020)

I'd be more than willing to not take rent from my tenants until this issue gets resolved. However, I have a mortgage that needs to be repaid, so, without receiving the rent, I wouldn't be in a position to do this until I got confirmation that my mortgage payments wouldn't be taken at the start of the month. 

There's a sequence here that needs to happen i.e. 1. Bank announces that no mortgage payments would be taken and, 2. I would then inform my tenants that they don't need to pay any rent. This would be repeated when the crisis is over. It should be simple enough for banks to write to mortgage holders to let them know that no payments will taken for x months.

There might be _some_ landlords who get mortgage payments frozen but don't pass it on to the tenants. In cases like this, there should be some way for tenants to "report" these to RTB.


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## George12 (18 Mar 2020)

My problem with this is that the term frozen suggests that the payments are being deferred rather than written off. I have tenants who live on a week to week basis so their expectation would probably be that they would never have to pay the rent back that they don't pay now. I understand their plight and they can't starve but it is not my role to provide social housing. For the moment I will continue to get paid but my husband won't so it's not all roses for landlords either.


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## Ger1966 (18 Mar 2020)

Hi George12. Yep, that's my expectations i.e. the bank wouldn't write off these monthly repayments, but rather defer them to the end of the mortgage.  It's trickier when it comes to the tenants though.  Say I have a tenant who hasn't been laid off, I would just expect things to continue as normal i.e. I get paid the rent, and I then pay my mortgage.  
On the other hand, if I have a tenant who works for a company where they have been temporarily laid off, I would be willing to not charge them rent as long as the bank doesn't expect me to pay the mortgage.  I know this can't continue indefinitely and a time will come when the bank can no longer allow payment not to be made and this is where it gets tricky.


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## Leo (18 Mar 2020)

It's a tricky one, rent reductions or moratoriums would cause knock-on effects. Dublin City Council have already warned they would quickly run out of money of they were forced to halt collections.


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## George12 (18 Mar 2020)

And unfortunately the tenant will probably not be around Ger1966 when you have to pay the missed payments at the end of the mortgage term.....anyway best just wait to see what is announced before we panic


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## Stephen Brennan (18 Mar 2020)

Before the coronavirus outbreak, if a tenant lost their job they could get their rent paid through the HAP scheme. This is still the case now so I don't think it's fair that the landlord should be hit in the pocket too.
The government should make it faster for HAP applications to be processed, that way the tenant isn't liable for the rent and the landlord will still be able to pay his mortgage. It's no good the banks giving a 3 month mortgage holiday when interest is still accruing on the loan. Also, regardless of what the media or the banks say about affecting the landlord's credit rating, it will still be a black mark against him/her if they ever want to remortgage or borrow in the future. HAP is there for a reason, so the government should use it instead of making it complicated for the landlord and tenant.

Since all the recent job loses and the obvious delay in processing job seeker applications, the government has asked affected employers to pay the employee the equivalent of jobseekers allowance and then claim it back from the government at a later date. They could introduce that for tenants too while the HAP application is going through. So while the tenant is waiting for HAP, the landlords would waiver the rent the tenant owes them, knowing that they can claim it back from the government.


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## Paul O Mahoney (18 Mar 2020)

Stephen Brennan said:


> Before the coronavirus outbreak, if a tenant lost their job they could get their rent paid through the HAP scheme. This is still the case now so I don't think it's fair that the landlord should be hit in the pocket too.
> The government should make it faster for HAP applications to be processed, that way the tenant isn't liable for the rent and the landlord will still be able to pay his mortgage. It's no good the banks giving a 3 month mortgage holiday when interest is still accruing on the loan. Also, regardless of what the media or the banks say about affecting the landlord's credit rating, it will still be a black mark against him/her if they ever want to remortgage or borrow in the future. HAP is there for a reason, so the government should use it instead of making it complicated for the landlord and tenant.
> 
> Since all the recent job loses and the obvious delay in processing job seeker applications, the government has asked affected employers to pay the employee the equivalent of jobseekers allowance and then claim it back from the government at a later date. They could introduce that for tenants too while the HAP application is going through. So while the tenant is waiting for HAP, the landlords would waiver the rent the tenant owes them, knowing that they can claim it back from the government.


That would be the ideal situation but HAP is administered by councils and can't see them turning applications around in a hurry. 

If the government were to allow the capital payments for those months to be tax deductible that might soften the blow a bit but I can't see why landlords should be out of pocket in this.


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## geri (18 Mar 2020)

And the tenant still has to make a payment themselves to HAP in order for the landlord to be paid.  Currently if they dont pay their contribution the payment to the landlord is stopped. It's hard to know what to do for the best. Maybe council continues to issue the HAP payment even if the tenant cant pay?


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## Leper (18 Mar 2020)

I don't know anybody who was not affected somewhat by the Covid-19 situation. Is there a legitimate reason why landlords should not be affected?


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## Stephen Brennan (18 Mar 2020)

Leper, Landlords will be affected. There are many people that have investment properties and are therefore considered landlords but also have regular jobs to meet the payments. Remember, that many people who bought investment properties in the boom years ( 2005 - 2008 approx) are still in negative equity (Balbriggan for example), although you won't read that in the media.
It's about protecting people as much as possible. I agree that tenants should have help with the rent paid if they lose their jobs but it doesn't have to be at the detriment of the landlord.

Paul, I agree with you about the capital payments being tax-deductible, that would certainly help.
Leo was on last night about everyone being in it together. If that's the case, the councils will have to step up to the plate regarding HAP as well as everyone else. I know landlords aren't popular but the state needs them too.


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## Chipmunk (18 Mar 2020)

Am I right in thinking if I take a payment break of 3 months on 2k per month with 20 years left on mortgage and a rate of 5% instead of paying back 6k I will be paying back more like 16k. I.e. 6k over 20 years at 5%.


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## locknbarrel (18 Mar 2020)

Chipmunk said:


> Am I right in thinking if I take a payment break of 3 months on 2k per month with 20 years left on mortgage and a rate of 5% instead of paying back 6k I will be paying back more like 16k. I.e. 6k over 20 years at 5%.


I think your logic is right...you will pay back more. Landlords will get no benefit from this. If the take a break they will pay everything back overtime with interest. But remember...we're all in this together.


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## Stephen Brennan (18 Mar 2020)

Geri, I agree. Yes, it's an emergency situation so the HAP payment should still be paid regardless of whether the tenant can make their contribution.


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## geri (19 Mar 2020)

Stephen,
Or maybe the landlord gets the hap payment less the tenant contribution if they are not paying it. This way no one looses out completely.


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## Trendisyrfriend (20 Mar 2020)

My long term tenant has asked me to drop the rent down as she cant go in to work over fear of contracting the virus.
Says she is on emergency annual leave?
While I want to help if this is genuine, she still has outstanding rent arrears from being out of work previously.
Can I ask her for something from her employer outlining her situation before we come to an agreed rent deferral?
Yet again the government has landed this on landlords to deal with.


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## Purple (20 Mar 2020)

Chipmunk said:


> Am I right in thinking if I take a payment break of 3 months on 2k per month with 20 years left on mortgage and a rate of 5% instead of paying back 6k I will be paying back more like 16k. I.e. 6k over 20 years at 5%.


You're paying 5% interest on your mortgage?!


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## Leo (20 Mar 2020)

Trendisyrfriend said:


> she cant go in to work over fear of contracting the virus.
> Says she is on emergency annual leave?



That sounds like it's her choice rather than one faced by many others losing their jobs at the moment.



Trendisyrfriend said:


> Yet again the government has landed this on landlords to deal with.



I'd suggest she should be assessing her social welfare entitlements. The government may introduce measures to support private tenants, if you move ahead of this you may lose out.


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## Brendan Burgess (20 Mar 2020)

Trendisyrfriend said:


> has asked me to drop the rent down



You cannot drop the rent down. 

By doing so you will be limited to increasing it by only 4% in the future. 

You must tell her that the full rent is due, but that you can agree a payment plan.

Brendan


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## Stephen Brennan (20 Mar 2020)

geri said:


> Stephen,
> Or maybe the landlord gets the hap payment less the tenant contribution if they are not paying it. This way no one looses out completely.


As far as I know, the tenant's contribution is paid directly to HAP unless the rent exceeds what HAP pay in which case the tenant tops it up by paying the difference to the landlord.
I agree with Brendan, the full rent should be due but you can agree a payment plan with the tenant.
It would be up to the council to waiver the tenant's portion of the rent (if applicable) and I can't see them doing that.


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## geri (20 Mar 2020)

Stephen Brennan said:


> Sorry, misread your message the first time around.
> As far as I know, the tenant's contribution is paid directly to HAP. The landlord should still get the full rent and it would be up to the council to waiver the tenant's portion. Can't see them agreeing to that.


Yes, but my suggestion is that the council could subtract the tenants contribution from the payment to the landlord if the tenant doesn't give it to the council.  Maybe I'm not explaining myself well. Almost like the landlord is now paying the tenants contribution. That way the landlord gets paid something, the council doesn't loose out and the tenant feels secure.   Maybe I'm missing something.  The computer probably says no


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## AlbacoreA (23 Mar 2020)

Leper said:


> I don't know anybody who was not affected somewhat by the Covid-19 situation. Is there a legitimate reason why landlords should not be affected?



I don't see how landlords won't be the worst effected. There is no way to get money from tenants, no way to evict, and no way to chase for money afterwards. However the banks will chase the landlord for the money if they have a mortgage. 

Since most landlords have one property and not all have mortgages, for all it will their income immediately effected. 

It certainly won't make being a landlord more attractive, that's for sure.


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## AlbacoreA (23 Mar 2020)

LL is just a cog in a much bigger system.


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## Leper (23 Mar 2020)

AlbacoreA said:


> I don't see how landlords won't be the worst effected. There is no way to get money from tenants, no way to evict, and no way to chase for money afterwards. However the banks will chase the landlord for the money if they have a mortgage.
> 
> Since most landlords have one property and not all have mortgages, for all it will their income immediately effected.
> 
> It certainly won't make being a landlord more attractive, that's for sure.



What's the workable solution?


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## AlbacoreA (23 Mar 2020)

Leper said:


> What's the workable solution?



I honestly don't know.

 I guess the govt and the banks have to come up with a plan to put everything on pause for 3-6 months. As much as they can. No doubt a some economic activity can't handle that and will collapse.


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## Thirsty (24 Mar 2020)

I'm not clear on the proposed 'rent /eviction freeze' legislation.

Is it proposed that no evictions can be carried out during the next three months, or does it include notice of eviction? 

If I wanted to sell my house in September for example  I would want to give my tenant notice now.

Is the rent freeze to say tenants pay no rent at all for three months? Or there's no increase to be applied for three months, even if previously notified, or you can't give notice of a rent increase to take effect in say Sept.


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## Leper (24 Mar 2020)

Brendan Burgess said:


> You cannot drop the rent down.
> 
> By doing so you will be limited to increasing it by only 4% in the future.
> 
> ...



You can drop the rent. If you don't you're at more risk of losing the tenant. Since were no earnings greater than less earnings?
And more important, what's the chance of nearly all rentals being reduced when this pandemic is over?


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## AlbacoreA (24 Mar 2020)

If I could afford it I would give the tenant 2-3 months free rent and be expecting a rent but afterwards to match the average in the area. If you can afford it. It's no difference of a tenant leaving and missing a month or two. Recent landlords might not be used to this but missing a couple of months rent used to be very common when switching tenants.


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## AlbacoreA (24 Mar 2020)

Trendisyrfriend said:


> My long term tenant has asked me to drop the rent down as she cant go in to work over fear of contracting the virus.
> Says she is on emergency annual leave?
> While I want to help if this is genuine, she still has outstanding rent arrears from being out of work previously.
> Can I ask her for something from her employer outlining her situation before we come to an agreed rent deferral?
> Yet again the government has landed this on landlords to deal with.



You can ask. But if she does stop paying there is nothing you can do about it. The tenant could be genuine but all signs are that they are a Messer and you can expect more hassle going forward.


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## AlbacoreA (24 Mar 2020)

Leper said:


> You can drop the rent. If you don't you're at more risk of losing the tenant. Since were no earnings greater than less earnings?
> And more important, what's the chance of nearly all rentals being reduced when this pandemic is over?



It's likely all rents will fall. The question really will be how much supply will come back on the market, and will demand still be there. There is a possibility demand and the housing crisis will be even worse after this crisis. 

I'd expect a lock down for 2-3 months and economy will take 6 months to restart and it will be changed. A Landlord should be taking that long term view.


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## Leo (25 Mar 2020)

Thirsty said:


> Is the rent freeze to say tenants pay no rent at all for three months?



No, it's a freeze, the rate cannot be increased (once the measures are passed). There is no suggestion that rents would not continue to fall due. See here:



> While tenants will be expected to pay rent during this period, income supports and Rent Supplement is available to those struggling to do so. These supports are provided by the Department of Employment Affairs and Social Protection. Any rent arrears built up will be payable, but landlords have been asked to show forbearance and reach local arrangements in such circumstances.


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## AlbacoreA (25 Mar 2020)

I can't see any mention about falling rents? They are not frozen if they can fall. I'm being pedantic. But I'm surprised its not clearly stated somewhere.


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