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Tenants not paying rent

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  • 17-04-2020 7:27pm
    #1
    bbehan202
    Closed Accounts Posts: 66 ✭✭


    1. I rent out a property at 1,700e to two tenants (via an agency). Pretty good tenants - no major hassle from them.
    2. I am not too sure of their relationship with their employer (I think it's a contract basis with an airline) but their hours have been cut back due to COVID-19 crisis.
    3. They have offered to pay 1,400e rent (they asked for there to be no arrears as they have been good tenants and plan on staying there once this is over) and assess situation as it progresses.
    4. My costs for the property are pretty high and I don't make much money off of it - just break even. I have savings but it's not much. I can't avail of any mortgage holiday from the bank. (That's a whole other story.)
    [line]300[/line]
    I am wondering what the best thing to do in this situation is:
    1. Reject their offer outright.

      Pros: I can clear my debts if they pay
      Cons: They might leave the property and I have an empty property and no income. I don't want the headache of legal hassle. Note - they are from a different country so chance of recuperating anything if they head home after this over would be low and I can't evict them.

    2. Use their deposit to pay for arrears.

      Pros: Keep me able to pay my bills but would only last a few months
      Cons: If they wreck the gaff - I'd have to pay out of my own pocket once they leave.

    3. Accept the 1,400e and chase them for arrears

      I don't know the specifics of their situation. I don't know if they are getting COVID-19 payment & rent/supplement. I don't know if it's okay for me to ask them to provide bank statements, wage slips, and evidence that they've tried to get rent supplement. If both of them were getting payment of 350e a month each that's 2,800e a month income. This well covers the cost of rent and them being able to live comfortably while being kept restricted to a 2km radius.

      Pros: I might get the money back eventually
      Cons: I'd have to pry into their personal affairs which I don't want to do. This could be a step too far.

    4. Accept the 1,400e and write off the rest for one month, maybe more?

      Pros: I get to keep my asset in an uncertain property/rental market
      Cons: My savings would deplete. I suffer a loss from that aspect. I know I took this on as a risk.

    Any advice greatly appreciated.


«1345

Comments

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    #2
    JPCN1
    Registered Users Posts: 887 ✭✭✭JPCN1


    D.


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    #3
    handlemaster
    Registered Users Posts: 6,003 ✭✭✭handlemaster


    Did you get a letter from there employer to see this or some other proof. You are been asked to effectively hand then money that is owed to you.


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    #4
    Deco99
    Registered Users Posts: 1,642 ✭✭✭Deco99


    300 euros would deplete your savings? What happens if the washing machine or oven went in the apartment? Let's say this went on for 3 months, €900 would deplete your savings? Nonsense


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    #5
    Batgurl
    Registered Users Posts: 1,208 ✭✭✭Batgurl


    D.


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    #6
    893bet
    Registered Users Posts: 8,771 ✭✭✭893bet


    E) they stop paying rent altogether and you can’t evict

    Box careful. They are good tenants so play ball.


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    #7
    JPCN1
    Registered Users Posts: 887 ✭✭✭JPCN1


    By you're own admission they've been pretty good tenants which are hard enough to find.

    They have offered you a good portion of the rent.

    It'll be a different renters market on the other side of this.

    No brainer for me. Work with them and take a small enough hit.


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    #8
    James 007
    Registered Users Posts: 962 ✭✭✭James 007


    Yes, accept reduced rent for now, hold onto good tenants during this time. Your title is misleading. Better change it to Tenants looking for reduced rent during Covid-19 crisis. Try & not word it as reduced rent, someone else put it better, as you can only increase your rent by 4% again for the year. Put it in as a temporary deduction until they return to work.


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    #9
    ooter
    Registered Users Posts: 3,061 ✭✭✭ooter


    if they were to leave tomorrow would you be confident of getting someone else to move in straight away, given the way things are?
    losing 300 euro a month isn't ideal but it's much better than losing 1700 euro a month.


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    #10
    enricoh
    Registered Users Posts: 4,841 ✭✭✭enricoh


    Better the devil you know imo. Tell em you can afford to do it for 3 months max.


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    #11
    Pkiernan
    Registered Users Posts: 4,315 ✭✭✭Pkiernan


    If you can't take a 300 euro hit, how are you going to pay your preliminary tax to Revenue?

    You've got to be looking at 6 grand at least on the rental income you're getting.

    Keep those tenants. Take the 1400.


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    #12
    punisher5112
    Registered Users Posts: 24,647 ✭✭✭✭punisher5112


    They will be getting the social welfare payment most likely and may even qualify for assistance for rent.

    Be very careful accepting a reduction as it may cause issues down the line, if you do I'd be making sure it's all in writing and written out correctly.


    I'd also look that they contribute to this reduction when back to normal and make this clear.


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    #13
    Fred Cryton
    Registered Users Posts: 972 ✭✭✭Fred Cryton


    Ah sure isn't this the new SF republic we keep hearing about? no rent to be paid to those "greedy" landlords, and no power of eviction either.

    Virus is no excuse, are they really claiming to have zero savings to use to pay the rent? Tell them to show you balance in their bank account, and also show evidence of looking for loan from bank to pay the rent. You should be the very last person they come to after exhausting all other options.

    there are lots of people who will take a mile if you give an inch, and will use any excuse to shirk responsibilities.


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    #14
    JeffKenna
    Registered Users Posts: 4,518 ✭✭✭JeffKenna


    D.


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    #15
    Graham
    Moderators, Society & Culture Moderators Posts: 17,642 Mod ✭✭✭✭Graham


    Allow them to defer a proportion of the rent for now unless you're happy to permanently reduce the rent.


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    #16
    robinbird
    Registered Users Posts: 471 ✭✭robinbird


    D.

    Rents are falling and doubt that FG/FF will have the same level of funds to subsidise landlords to keep rents at the same high level when this is over.


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    #17
    TheChizler
    Registered Users Posts: 9,426 ✭✭✭TheChizler


    Why not C without the prying into their affairs? Just let them know they're in arrears and expect it to be paid when they can. This is what you'd do in normal times (with the added threat of termination) so why not now?


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    #18
    bbehan202
    Closed Accounts Posts: 66 ✭✭bbehan202


    handlemaster wrote: »
    Did you get a letter from there employer to see this or some other proof. You are been asked to effectively hand then money that is owed to you.

    No. Good feedback though. I haven't received anything written. I don't know if it's "legal" for me to do that. See below about my chat with PRTB today.
    Deco99 wrote: »
    300 euros would deplete your savings? What happens if the washing machine or oven went in the apartment? Let's say this went on for 3 months, €900 would deplete your savings? Nonsense

    All repairs etc. are taken from the rent collected by the agency at the end of the month.
    James 007 wrote: »
    Your title is misleading. Better change it to Tenants looking for reduced rent during Covid-19 crisis. Try & not word it as reduced rent, someone else put it better, as you can only increase your rent by 4% again for the year. Put it in as a temporary deduction until they return to work.

    Agree re:title. It won't let me edit it though.
    punisher5112 wrote: »
    Be very careful accepting a reduction as it may cause issues down the line, if you do I'd be making sure it's all in writing and written out correctly.

    Agree. I'll definitely do that.
    Fred Cryton wrote: »
    Ah sure isn't this the new SF republic we keep hearing about? no rent to be paid to those "greedy" landlords, and no power of eviction either.

    Virus is no excuse, are they really claiming to have zero savings to use to pay the rent? Tell them to show you balance in their bank account, and also show evidence of looking for loan from bank to pay the rent. You should be the very last person they come to after exhausting all other options.

    there are lots of people who will take a mile if you give an inch, and will use any excuse to shirk responsibilities.

    This is the post which resonates with me the most. The relationship I have with them is a business one ya know? It's not like I am here sitting on stacks of cash. If I am taking a hit on my savings - how am I to know that they are not on theirs ya know? I don't have 100% of the information to make a judgement call. I asked the PRTB chat thingy today about the landlord's rights and about requesting documents from them and she said that I'd need to consult with a solicitor.
    TheChizler wrote: »
    Why not C without the prying into their affairs? Just let them know they're in arrears and expect it to be paid when they can. This is what you'd do in normal times (with the added threat of termination) so why not now?

    I agree - they said they'd like to stay in the property moving forward so maybe a payment plan can be arranged until the tenancy ends.

    This whole thing is a dilly of a pickle.


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    #19
    Gumbo
    Moderators, Society & Culture Moderators Posts: 38,529 Mod ✭✭✭✭Gumbo


    As a LL I’d accept the €1400 once they can prove or I’d you are certain they are on reduced income.

    But I’d keep it official and let them
    Know the €300 may be added to the rent going forward once back to full time employment. The arrears, even if it’s 6 months of €300 which is 1800 can be paid back over 12 months or so.

    I wouldn’t risk loosing good professional tenants over €300 here
    Which don’t forget, if you make a loss, can be carried over to next year.


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    #20
    HamSarris
    Registered Users Posts: 109 ✭✭HamSarris


    If you are taking a substantial financial hit by losing €300, it suggests you need better financial planning skills. Consider developing a rainy-day fund and avoid using excessive debt that you can’t service in an economic downturn.

    Also consider getting a promotion in your job or educating yourself in a higher paying degree such as software development.


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    #21
    Tasfasdf
    Closed Accounts Posts: 660 ✭✭✭Tasfasdf


    HamSarris wrote: »
    If you are taking a substantial financial hit by losing €300, it suggests you need better financial planning skills. Consider developing a rainy-day fund and avoid using excessive debt that you can’t service in an economic downturn.

    Also consider getting a promotion in your job or educating yourself in a higher paying degree such as software development.

    Yeah and he should start doing the lotto aswel:rolleyes:


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    #22
    mrslancaster
    Registered Users Posts: 1,783 ✭✭✭mrslancaster


    punisher5112 wrote: »
    ...
    Be very careful accepting a reduction as it may cause issues down the line, if you do I'd be making sure it's all in writing and written out correctly.....

    Info recently from rtb is that any change to rent is a rent review which can only be every 12 months with 90 days notice in a rpz.

    Arrears notice now is 28 days not 14.

    suggestion from TheChizler seems a good option, tenant pays lower rent & arrears can be sorted out later.


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    #23
    Pawwed Rig
    Moderators, Category Moderators, Home & Garden Moderators, Recreation & Hobbies Moderators, Social & Fun Moderators Posts: 22,307 CMod ✭✭✭✭Pawwed Rig


    You would be down €140 after tax!
    No brainer


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    #24
    Gumbo
    Moderators, Society & Culture Moderators Posts: 38,529 Mod ✭✭✭✭Gumbo


    HamSarris wrote: »
    If you are taking a substantial financial hit by losing €300, it suggests you need better financial planning skills. Consider developing a rainy-day fund and avoid using excessive debt that you can’t service in an economic downturn.

    Also consider getting a promotion in your job or educating yourself in a higher paying degree such as software development.

    Same could be said about the tenants. They should have a rainy day fund for times like this.


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    #25
    overkill602
    Registered Users Posts: 267 ✭✭overkill602


    Bit off topic talking to some friends and staying in Ireland at atm with f/a social scene going on and no pubs restaurants entertainment less travel clothes buying and lots of staying in, home cooking, we are spending less i know i am sure.
    So I guess it makes it look like a stroke, likely hood when this end we will have more in the bank as well as the LL who should be allowed or not?

    I would not like to looking for a tenant or a tenant looking for a place to live in the current climate reduce for 3 months

    If they leave would you give them a reference?

    I assume they will be working after the lock down ends


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    #26
    rosmoke
    Registered Users Posts: 416 ✭✭rosmoke


    How are you barely breaking even?
    The tenants literally pay the mortgage/house!?
    You are in a fantastic postlition if someone else pays for your house in an economic shutdown.


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    #27
    zinfandel
    Registered Users Posts: 234 ✭✭zinfandel


    B use the deposit to pay the arrears and hope that having been good tenants they will leave the place in good order.


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    #28
    silver2020
    Registered Users Posts: 2,045 ✭✭✭silver2020


    punisher5112 wrote: »
    They will be getting the social welfare payment most likely and may even qualify for assistance for rent.

    No they won't - generally your information of your posts is very wrong and should always come with a health warning

    The covid payment does not entitle you to rent assistance - you need to reach a totally different bar and apply separately for that. It is highly unlikely that these tenants would qualify.

    They will get the covid payment. At €1500/month (€3,000 combined), the rent they have offered is almost 50% of their net income.


    I think they are being fair. They have not suggests 50%. I think the decent thing is to accept it for a 3 month period, but also inform them that it will also place hardship on you due to the high costs your have of the mortgage and that you would not be able to extend it past 3 months.

    A way of doing this is to do get them to pay the €1700 and for you to do a "special refund" of €300 the next day.


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    #29
    Deco99
    Registered Users Posts: 1,642 ✭✭✭Deco99


    Why are they not dealing with the agency? Just because an agency takes repairs out the impact to you is the same still a loss. So again how can €300 or €900 over 3 months deplete your savings. Have you got €1000 savings? What if 3 of your friends were getting married over the next 3 months (pre-lockdown) would you not be able to go cause your skint? The issue isn't savings, you don't want to give the inch which is understandable and long term it maybe unsustainable if it were to stay at €1400 but claiming you can't afford €900 is not going to win much sympathy.


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    #30
    overkill602
    Registered Users Posts: 267 ✭✭overkill602


    You cant win here even though you say they are good tenants but all LLs are bad here except the professional ones.


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    #31
    Deco99
    Registered Users Posts: 1,642 ✭✭✭Deco99


    overkill602 wrote: »
    You cant win here even though you say they are good tenants but all LLs are bad here except the professional ones.

    Disagree, I don't have an issue with trying to make sure they get full rent due. Just don't claim that €300 will break them


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