Rent Freeze - the mechanics of

Samuel T. Cogley · 18-03-2020 3:15pm #1

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 · 18-03-2020 4:39pm

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 · 18-03-2020 4:40pm

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 · 18-03-2020 4:42pm

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 · 18-03-2020 4:43pm

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 · 18-03-2020 4:44pm

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 · 18-03-2020 4:47pm

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.

Dav010 · 18-03-2020 4:47pm

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 · 18-03-2020 4:50pm

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:

[Deleted User] · 18-03-2020 4:51pm

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.

Dav010 · 18-03-2020 4:54pm

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 · 18-03-2020 4:55pm

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

Dav010 · 18-03-2020 4:55pm

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 · 18-03-2020 4:55pm

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 · 18-03-2020 5:00pm

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 · 18-03-2020 5:01pm

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 · 18-03-2020 5:05pm

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.

Dav010 · 18-03-2020 5:05pm

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 · 18-03-2020 5:06pm

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 · 18-03-2020 5:06pm

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 · 18-03-2020 5:07pm

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 · 18-03-2020 5:09pm

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 · 18-03-2020 5:10pm

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 · 18-03-2020 5:11pm

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 · 18-03-2020 5:14pm

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

jack842 · 18-03-2020 5:14pm

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 · 18-03-2020 5:18pm

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 · 18-03-2020 5:20pm

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 · 18-03-2020 5:20pm

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 · 18-03-2020 5:27pm

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 · 18-03-2020 5:29pm

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.

Rent Freeze - the mechanics of

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