Rent Freeze - the mechanics of

Samuel T. Cogley

With a mortgage freeze being suggested, where no doubt the payments would just be tacked on to the end, how could a rent freeze work? Just tacking the payments on to the end won't work and there are other fixed costs each month such as insurance and management fees.

Could some sort of tax break work?

Gumbo

Samuel T. Cogley wrote: »

With a mortgage freeze being suggested, where no doubt the payments would just be tacked on to the end, how could a rent freeze work? Just tacking the payments on to the end won't work and there are other fixed costs each month such as insurance and management fees.

Could some sort of tax break work?

I was thinking this earlier.
The lost money has to go somewhere.

With regards the mortgage, the banks have said they will spread the payment over the remaining term.

But from the tenant side, do they get 3 months free rent?

whippet

Gumbo wrote: »

I was thinking this earlier.
The lost money has to go somewhere.

With regards the mortgage, the banks have said they will spread the payment over the remaining term.

But from the tenant side, do they get 3 months free rent?

There is nothing free here .. private landlords can’t just not charge rent ... and tenants just can’t expect landlords to pick up the slack when times are tough ....

Fann Linn

whippet wrote: »

There is nothing free here .. private landlords can’t just not charge rent ... and tenants just can’t expect landlords to pick up the slack when times are tough ....

Are private landlords getting a freeze on their mortgage payments?

Gumbo

whippet wrote: »

There is nothing free here .. private landlords can’t just not charge rent ... and tenants just can’t expect landlords to pick up the slack when times are tough ....

I agree.
It needs to be clear and concise from both sides when entering this agreement.
The tenant needs to be fully aware that the 3 mo this rent will be collected on the other side.

Zulu

whippet wrote: »

There is nothing free here .. private landlords can’t just not charge rent ... and tenants just can’t expect landlords to pick up the slack when times are tough ....

Yet this is what plenty think will happen.

I suspect the tenant would need to provide proof that they lost their job, that could then be passed to the bank in terms of pausing mortgages, and again to revenue for a tax deduction. But it wont account for everything and the LL will get a hit no doubt.

Certainly this will not be as easy as some would believe.

jrosen

I was only thinking the same. Im a landlord and the property has a mortgage on it. So I wont be allowing any rent break.The mortgage still has to be paid. Even if I got a break on the mortgage, it will be tagged onto the end for me and ultimately I will take the hit.

I dont see how there could be a break for renters.

Zulu

Zulu wrote: »

Yet this is what plenty think will happen.

I suspect the tenant would need to provide proof that they lost their job, that could then be passed to the bank in terms of pausing mortgages, and again to revenue for a tax deduction. But it wont account for everything and the LL will get a hit no doubt.

Certainly this will not be as easy as some would believe.

Can you imagine the situation where at the end of the tenancy, the tenant owes the equivalent of 4 months rent, I wonder how many will just walk away. It’s nearly impossible for a LL to get rent arrears as it is.

listermint

jrosen wrote: »

I was only thinking the same. Im a landlord and the property has a mortgage on it. So I wont be allowing any rent break.The mortgage still has to be paid. Even if I got a break on the mortgage, it will be tagged onto the end for me and ultimately I will take the hit.

I dont see how there could be a break for renters.

How exactly would you be taking the hit if its still rented at the tail end ?

The renters would still be covering only later.


Im not sure you understand the mechanics of this at all..... :rolleyes:

jrosen

jrosen wrote: »

I was only thinking the same. Im a landlord and the property has a mortgage on it. So I wont be allowing any rent break.The mortgage still has to be paid. Even if I got a break on the mortgage, it will be tagged onto the end for me and ultimately I will take the hit.

I dont see how there could be a break for renters.

You can still rent it on the "other side".
Show a bit of decency will you.

listermint

listermint wrote: »

How exactly would you be taking the hit if its still rented at the tail end ?

The renters would still be covering only later.


Im not sure you understand the mechanics of this at all..... :rolleyes:

I think he understands it perfectly well, a pause on mortgage payments does not reduce the amount paid, it just lengthens the term. Tacking it on to the end of a tenancy introduces a huge risk that the tenant will not pay. Eaten bread is soon forgotten.

Fann Linn

Judging by some comments here I can see emergency protections being introduced for tenants.

BrownFinger

BrownFinger wrote: »

You can still rent it on the "other side".
Show a bit of decency will you.

What is the “other side”?

Eric_Noon

jrosen wrote: »

So I wont be allowing any rent break

Best of luck with that. you'll be told you're not getting rent.

listermint

Dav010 wrote: »

I think he understands it perfectly well, a pause on mortgage payments does not reduce the amount paid, it just lengthens the term. Tacking it on to the end of a tenancy introduces a huge risk that the tenant will not pay. Eaten bread is soon forgotten.

Thats exactly what i said, why are you repeating the mechanics of it back to me.

Christ on a bike....


He will still not be paying, his extra month or 3 months will be paid not by him ever, it will still be a tenant now or later

Tacitus Kilgore

jrosen wrote: »

I was only thinking the same. Im a landlord and the property has a mortgage on it. So I wont be allowing any rent break.The mortgage still has to be paid. Even if I got a break on the mortgage, it will be tagged onto the end for me and ultimately I will take the hit.

I dont see how there could be a break for renters.

Soo, you'll get a break on the mortgage but won't pass it on?



I hope you never get another cent from your tenants, and lose your asset.

jrosen

I understand quiet well actually. Its virtually impossible to get rent arrears as it stands.

My term will simply lengthen. The money isn't written off. So how would a landlord enforce payment of money owed at the end of a tenancy? Of course if the tenant was planning to stay long term the rental amount could increase monthly to make up for the months missed but if a tenant is leaving a property the landlord has little come back.

listermint

listermint wrote: »

Thats exactly what i said, why are you repeating the mechanics of it back to me.

Christ on a bike....


He will still not be paying, his extra month or 3 months will be paid not by him ever, it will still be a tenant now or later

But there is no guarantee the tenant will pay. Three months rent in Dublin could be over €5k, if the tenant does not pay, the Landlord still has to pay the mortgage, the three month freeze is just added on to the end of the 25year term. The Landlord could be significantly out of pocket if the tenant does not make up the payment at the end of the tenancy.

listermint

Dav010 wrote: »

But there is no guarantee the tenant will pay. Three months rent in Dublin could be over €5k, if the tenant does not pay, the Landlord still has to pay the mortgage, the three month freeze is just added on to the end of the 25year term. The Landlord could be significantly out of pocket if the tenant does not make up the payment at the end of the tenancy.

your 25th year tenant would cover it. you wont be covering that 3 months now or then.

Zulu

listermint wrote: »

How exactly would you be taking the hit if its still rented at the tail end ?

The renters would still be covering only later.


Im not sure you understand the mechanics of this at all..... :rolleyes:

There's no need for the rolleyes as i'm not sure you understand the mechanics either. In fact, it's all so vague, there is no clarity about the mechanics.

We don't know how long this will go on for. Management fees will still be incurred. Insurance bills will still be issued. Other costs might also be covered by LL like cable, internet etc.. these bill will still continue. And wear & tear and other costs will exist. None of these appeared to be accounted for when "freezing" rent for tenants and mortgages for landlords.

listermint

jrosen wrote: »

I understand quiet well actually. Its virtually impossible to get rent arrears as it stands.

My term will simply lengthen. The money isn't written off. So how would a landlord enforce payment of money owed at the end of a tenancy? Of course if the tenant was planning to stay long term the rental amount could increase monthly to make up for the months missed but if a tenant is leaving a property the landlord has little come back.

exactly , your term will lengthen by a few months which in the scheme of things makes no skin of your nose, you still wont be covering it.

Eric_Noon

I have had all my utility bills deferred until May, why cant he do the same? this is an unprecedented time...you absolutely cannot expect rent to be payed as normal.

Zulu

listermint wrote: »

exactly , your term will lengthen by a few months which in the scheme of things makes no skin of your nose, you still wont be covering it.

Nevermind the term for a moment - did you read my post? How do all the bills get paid?

Tacitus Kilgore

Eric_Noon wrote: »

I have had all my utility bills deferred until May, why cant he do the same? this is an unprecedented time...you absolutely cannot expect rent to be payed as normal.

Don't worry - see how he gets on when trying to evict during a pandemic.

Michael McGrath already has his eyes on them

https://www.independent.ie/world-news/coronavirus/coronavirus-landlords-warned-to-aid-tenants-or-state-will-intervene-39054060.html

Eric_Noon

I am a capatilist through and through, but you cannot expect business as usual during a Global Epidemic.

jack842

listermint wrote: »

exactly , your term will lengthen by a few months which in the scheme of things makes no skin of your nose, you still wont be covering it.

The landlord will pay the costs if they decide to sell the property at any time before the mortgage ends. Not many small private landlords rent out properties for the entire length of the mortgage.

Eric_Noon

jack842 wrote: »

The landlord will pay the costs if they decide to sell the property at any time before the mortgage ends. Not many small private landlords rent out properties for the entire length of the mortgage.

whats your point? how do tenants pay rent if they have no money because the world is seeing an unprecedented epidemic?

if you evict, there is most likely a significantly lower pool of people looking to rent at the moment... possibly no one!

jrosen

As it stands everything is vague and none of us really know how things will work out. Hopefully something that protects both sides will come to light.
There are many landlords who are just getting by and making zero profits.

Zulu

Eric_Noon wrote: »

I am a capatilist through and through, but you cannot expect business as usual during a Global Epidemic.

I'm an "accidental" landlord, not a capitalist, and I fully understand that this isn't business as usual.
If my tenants lose their jobs, or god forbid one suffers the worst, I wont be seeking to evict, however, I have a family and children. I'm worried about me and mine also. I cant afford to sub bills for someone else during this. I only wish I had that kind of money.

jrosen

Assuming a mortgage break is allowed on rented properties, tagging at the end is not a huge deal. Still the landlords problem to deal with but in the larger scheme of things its workable. However the devil will be in the detail. We have great tenants that have been with us for years and I would hope we could make this work, I would never want to see them out but im the person the bank will come knocking for.

Eric_Noon

Zulu wrote: »

I'm an "accidental" landlord, not a capitalist, and I fully understand that this isn't business as usual.
If my tenants lose their jobs, or god forbid one suffers the worst, I wont be seeking to evict, however, I have a family and children. I'm worried about me and mine also. I cant afford to sub bills for someone else during this. I only wish I had that kind of money.

Call utility bill companys and explain your situation, thats what i did!

Apart from spotify and phone bill I now have no bills due until May, and if i am not in a position to pay my bills come May, the companys will be told just that.

Eric_Noon

jrosen wrote: »

Assuming a mortgage break is allowed on rented properties, tagging at the end is not a huge deal. Still the landlords problem to deal with but in the larger scheme of things its workable. However the devil will be in the detail. We have great tenants that have been with us for years and I would hope we could make this work, I would never want to see them out but im the person the bank will come knocking for.

What on earth are you talking about?! if your tenants cant pay rent, you go to your bank and explain the situation and you will get your mortgage deferred!

Tacitus Kilgore

Eric_Noon wrote: »

What on earth are you talking about?! if your tenants cant pay rent, you go to your bank and explain the situation and you will get your mortgage deferred!

Landlords will have some fight on their hands trying to remove financially ruined tenants from a house.

This goes for banks too.


Whether you own, rent, or squat right now - you're going nowhere.

Eric_Noon

Eric_Noon wrote: »

and if i am not in a position to pay my bills come May, the companys will be told just that.

I suspect this is the dread for LLs, that tenants would will adopt the same policy and tell them just that if they can’t pay the rent tagged on at the end.

Eric_Noon

Eric_Noon wrote: »

What on earth are you talking about?! if your tenants cant pay rent, you go to your bank and explain the situation and you will get your mortgage deferred!

and if your worried about earnings, you can apply for an emergency social welfare payment of 203 pw online like everyone else.

Eric_Noon

Eric_Noon wrote: »

What on earth are you talking about?! if your tenants cant pay rent, you go to your bank and explain the situation and you will get your mortgage deferred!

Simple as that, banks are well known for their willingness to help mortgage holders in distress.

Fian

Being realistic it is essentially inevitable that landlords will take a hit. Not as big a hit as someone running a hairdressers, beauty salon or small restaurant. Need to take it on the chin, that's business reality.

I certainly won't be evicting my tenants if they can't pay atm. What can you do.

Will likely fund the mortgage payments from my salary, in fairness I am funding some of the payment from my salary even with full rent. I don't see myself failing to make mortgage repayments and dealing with the credit rating implications of that regardless of whether i have the option or not.

jrosen

Eric_Noon wrote: »

What on earth are you talking about?! if your tenants cant pay rent, you go to your bank and explain the situation and you will get your mortgage deferred!

Will I? You can guarantee it? Because I cant even guarantee it. My bank speaking with them this morning couldnt give me a straight answer. So until I hear it from them I do not know what the options will be.

It could be a whole lot of worry over nothing and the rent will come in as usual. Im just trying to plan and be ready if thats not the case

Eric_Noon

jrosen wrote: »

Will I? You can guarantee it? Because I cant even guarantee it. My bank speaking with them this morning couldnt give me a straight answer. So until I hear it from them I do not know what the options will be.

It could be a whole lot of worry over nothing and the rent will come in as usual. Im just trying to plan and be ready if thats not the case

https://www.independent.ie/world-news/coronavirus/coronavirus-landlords-warned-to-aid-tenants-or-state-will-intervene-39054060.html

I have a friend who has had his mortgage deferred already. banks are currently dealing with it on a case by case basis.

a bit of foresight wouldnt go a miss here, prepare for the worst. but as you said your tenants might be fine, they might be lucky and they can work from home.

jrosen

Fian wrote: »

Being realistic it is essentially inevitable that landlords will take a hit. Not as big a hit as someone running a hairdressers, beauty salon or small restaurant. Need to take it on the chin, that's business reality.

I certainly won't be evicting my tenants if they can't pay atm. What can you do.

Will likely fund the mortgage payments from my salary, in fairness I am funding some of the payment from my salary even with full rent. I don't see myself failing to make mortgage repayments and dealing with the credit rating implications of that regardless of whether i have the option or not.

I think your right and landlords will take a hit. But how much of a hit they will and can afford to take will have huge implications for tenants. There is an incredible amount of uncertainty for everyone.

jrosen

Eric_Noon wrote: »

https://www.independent.ie/world-news/coronavirus/coronavirus-landlords-warned-to-aid-tenants-or-state-will-intervene-39054060.html

I have a friend who has had his mortgage deferred already. banks are currently dealing with it on a case by case basis.

a bit of foresight wouldnt go a miss here, prepare for the worst. but as you said your tenants might be fine, they might be lucky and they can work from home.

Thats good to hear. Yes Im trying to plan and organize and have all the info I need.

sbsquarepants

I have an apartment rented out, on which there is still a mortgage to be paid. If i get a 3 month holiday on the repayments, i'd give a 3 month break on the rent - it will leave me out of pocket which is a bit shít (and which i can ill afford) but i don't really see another option. The 3 months "free" rent will just have to be tacked on at the end of the mortgage, finish paying 3 months later than planned - boo hoo!

These are unusual times, we're all going to have to do unusual things!

Kevg268

I'm an accidental landlord and when I had to leave my house I got in a tenant. He has been hit and miss paying but has always maintained the house. I'm tax compliant and above board but I didn't tell the mortgage company that I was getting a tenant in when I was moving. My accountant told me not to tell them when I enquired from him, it was 2011. If I contact the mortgage company now, as tenant has lost his job, will they assist in a mortgage holiday or am i asking for problems.

Eric_Noon

Kevg268 wrote: »

I'm an accidental landlord and when I had to leave my house I got in a tenant. He has been hit and miss paying but has always maintained the house. I'm tax compliant and above board but I didn't tell the mortgage company that I was getting a tenant in when I was moving. My accountant told me not to tell them when I enquired from him, it was 2011. If I contact the mortgage company now, as tenant has lost his job, will they assist in a mortgage holiday or am i asking for problems.

have you lost your job? reduced earnings?

Kevg268

I didn't but ive 2 mortgages now and only 1 working as wife is mind the kids.

GreeBo

Tacitus Kilgore wrote: »

Soo, you'll get a break on the mortgage but won't pass it on?



I hope you never get another cent from your tenants, and lose your asset.

What if the property is mortgage free, does that change your expectations on what the landlord "should" do?
What if the rent covers 5% of the payments?
10%? When is the onus on the landlord to freeze the rent?

dharma200

Dav010 wrote: »

But there is no guarantee the tenant will pay. Three months rent in Dublin could be over €5k, if the tenant does not pay, the Landlord still has to pay the mortgage, the three month freeze is just added on to the end of the 25year term. The Landlord could be significantly out of pocket if the tenant does not make up the payment at the end of the tenancy.

The second sentence there. This is what will have to change in society.

GreeBo

Eric_Noon wrote: »

https://www.independent.ie/world-news/coronavirus/coronavirus-landlords-warned-to-aid-tenants-or-state-will-intervene-39054060.html

I have a friend who has had his mortgage deferred already. banks are currently dealing with it on a case by case basis.

a bit of foresight wouldnt go a miss here, prepare for the worst. but as you said your tenants might be fine, they might be lucky and they can work from home.

Foresight on the tenants part to have money to cover times without income?

Eric_Noon

Kevg268 wrote: »

I didn't but ive 2 mortgages now and only 1 working as wife is mind the kids.

it just depends if we get a mortgage freeze or not, I guess. but if not it most likely be best if you keep up with your repayments!

I'm not an expert though, so it might not hurt to make an enquiry about this!

Tacitus Kilgore

GreeBo wrote: »

What if the property is mortgage free, does that change your expectations on what the landlord "should" do?
What if the rent covers 5% of the payments?
10%? When is the onus on the landlord to freeze the rent?

If it's mortgage free the landlord should do what's right. Now is not the time for profiteering off assets, Many people are basically volunteering to be unemployed at the moment for the greater good. Losing out on a bit of free money because one owns an asset is barely a contribution but would make a huge difference.

If rent only covers 5% of payment on a property it should not be rented, that's terrible business.

Whether they freeze rent or not, some tenants won't be able to pay full rent, its up to the landlord how they deal with it then. Eviction won't be the answer though.

Eric_Noon

GreeBo wrote: »

Foresight on the tenants part to have money to cover times without income?

It is not up to tenants to be flush with cash in case of a global epidemic, its up to the government to impliment measures.