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Thanks to all of you for your invaluable advice in the past.
I have a very nice young couple renting from me for almost four years. I have been aware that they were struggling to pay the rent each month and have under payed a few times. Currently they owe exactly one third of a whole months rent. They always phone and tell me when they can't make the full amount with promises to pay the arrears in the next few months and failing to do so.
Their situation has now changed and one one of them is not working. They phoned me the other day to tell me that they would not be able to afford the full rent when it is due. The shortfall will almost double their current arrears. They also indicated that their financial situation next month looks even more drastic.
They are told me that they will be going to the council and the benefit office for further advise. I am planning to talk to them in the next couple of weeks to see what their plans are going forward but I can't see that they have many options. They would not be able to find anywhere cheaper in the same area without downsizing drastically.
I would love to help them out but apart from reducing their rent drastically, which would leave me in financial difficulties, I don't know how.
If they I knew that this was only a temporary situation that they were in I would bite the bullet for the time being and wait it out. The time and money to evict them and re let the property is still the more costly option at the moment but it would not be too long long before that situation changes. I really don't want to be in a position where I am owed 6 months of rent and still having to incur those costs anyway.
I am also weary on what advise the council will give them as we all know what councils and organisations like Shelter think of private landlords.
What would you do in this situation? Is there anything I could do to help them? How long would you wait? Is section 21 the best route to go down if the situation seems irretrievable?
As always I look forward to your wise thoughts.
Talk to them immediately face to face - check their LHA entitlement online first so you know the max welfare they are entitled to.
I assume you had details of their respective earnings at outset so will have a rough idea of their current income.
Did they say why only one partner is now jobless - is it an area where jobs are plentiful?
A working age childless couple will be back of long queue for any social housing so Council will just refer them to PRS.
If they tell Council they are facing eviction - Council will tell them to remain in situ until Court Bailiffs arrive. In meantime potentially little or no rent is being paid.
If they have dependent children Council may eventually place them in a B&B - ie after Bailiff process.
A long while ago, we wrote How can landlords reduce rent arrears? with some great industry leaders thoughts.Though one thing we landlords cannot plan for is Tenants having reduced income - for whatever reason.Except perhaps Rent Guarantee Insurance, which is too late to bring up now.
Your best bet is to keep in contact, inform them of your situation but you are hoping to work with them. They need to check their Local Housing Allowance or Universal Credit entitlement to make claims where possible.CitizensAdvice Buru can help people identify their entitlements. They should also look at budgeting see where savings can be made, ending Gym/Sky Memberships for example.
It's also a good time for you to reflect on your budget. See if you can get a better mortgage, lower buildings and contents insurance, switch utilities and so forth. So you are able to continue to pay your bills (and their mortgage) if they do default or continue to pay a reduced rent.
The inevitable thing is they may need to downsize. So serving Section 21 would be in your best interest to not prolong their financial deficit with you.Though there are other ways to help, perhaps helping the unemployed person find a Job. There is never any harm in phoning around our friends to help someone else and ourselves at the same time.
The best outcome is they stay and pay rent. Them moving our or you evicting them can be costly from Legal Fees, Void Period Costs and Re-Tenanting Costs.
_________________________________________________________________________My posts are not financial advice, just a rambling guy passing time on a coffee break.The team at Bespoke Finance offers advice, including Limited Company Buy-to-Let , HMO Conversion and Cheap Life Insurance._________________________________________________________________________
My friend Erol025, the first position and decision you need to accept and make is that you are neither a charity, nor a financial counsellor to your tenants. You are a business person. Business persons make business decisions.I can advise you in many ways but I believe the most important advice you need right now is to separate yourself from making emotional decisions with your tenants whom for all intents and purposes MAY be telling you untruths or not the entire truth. Sure be empathetic with their situation but don't be sympathetic.Ultimately, you're not related to them. If they can't meet their obligations to you and to themselves to have a roof over their heads above all else, they need to move on.Every private landlord will tell you that every emotional decision they've made about their tenants have ALWAYS gone wrong for them. Why? Because while you think they've given you all the facts, the truth and the whole story could be miles from that. So, please don't join the statistics.Bite the bullet, help them move on, get new tenants and recover any unpaid rents through the court process if need be.If you don't want them to move, encourage them to contact the bank of mum and dad etc to keep their home. Good luck.
Meet with them
Sec 21 them ( for their benefit and yours and the council )
That gives all 2 mths to deal with the snail paced councils
They have a 56 day target to deal with homelessness
So the sec 21 starts the clock ticking for all parties .
Get them to take that up the council . They will do affordability tests
They will likely get council support through LHA / DHP to keep them there.
I take it your rent is the going rate for the accommodation they have
The council dont want them in their B&B`s but they have obligations to house the homeless
A recent case law was created about rent arrears doesnt necessarily mean its their fault .
Check out https://www.supremecourt.uk/cases/docs/u...dgment.pdf
Its an expensive option for the taxpayer to B&B them and also much more hassle
Much better to keep them where they are and help them out a bit
The Homelessness Reduction Act now puts a much greater onus on the council to help
They shouldn't force LL`s down the court route so much as that serves no one well
So if you want them still, work with the council and I am sure it can be resolved with a positive outcome
Different councils have different interpretations of their obligations.
The turnover of staff is high so dont take on face value what the operative says
They may be ignorant of their obligations if only been employed for a short time
One I spoke to the other day was working on an old sec 21 format from last year
They tried to invalidate mine .
I had to educate her
Jonathan Clarke. http://www.buytoletmk.com
I am in a similar position to the original poster, can you tell me please Jonathan why you suggest a S21 and not a S8?
All comments are made in good faith and are given to the best of my knowledge and experience but I would advise you to consult an expert before making important decisions and I accept no liability for comments made.
A s8 notice always results in a hearing, and the notice can be defended on the basis of disrepair.
It also penalises the tenant, because if they are evicted for non-payment of rent they're regarded as having deliberately making themselves homeless, which removes the obligation on the local authority to give them emergency support and can have an effect on their entitlement for council housing.
That's great, thanks for your quick response John-Paul