Blogger says tenants with Coronavirus should get 3 months rent free!

Blogger says tenants with Coronavirus should get 3 months rent free!

9:26 AM, 5th March 2020, About 2 years ago 74

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Richard Murphy of Tax Research LLP, a Professor of Practice in International Political Economy at City, University of London and regular columnist for AccountingWEB.co.uk, claims Landlords should bear the cost of Coronavirus and provide three months free rent to tenants who contract Covid-19.

Murphy claims: “As a matter of statutory right any tenant should be provided with a minimum three-month rent-free period to ease the stress upon them whilst this crisis last. I would suggest that the grant of that extension should be automatic to anyone who does not make a due payment of rent on the required date during the period of the epidemic. They should be automatically granted this extension by the landlord without having to make any further application or to complete any additional paperwork.”

“I stress that the cost of this will fall directly upon the landlords in question. I am quite deliberately suggesting that they should bear the heaviest burden of dealing with the epidemic. The reason is simple and is that whatever happens they will still have an asset at the end of this period, and no other sector can guarantee that at present. As a consequence they have the greatest capacity to bear this cost. And, if it so happens that some landlords do fail as a consequence, the assets that they have owned will still exist after this failure and so the economy can manage the consequences of this.”

Murphy goes on to suggest that the other group that should carry the burden of Coronavirus is the finance sector, but only by offering a three month extension to loan or mortgage payments and not the total loss he seems to wish upon Landlords.



Comments

Mike

21:50 PM, 19th March 2020, About 2 years ago

Exactly JJ, all I will get if all 4 of my tenants in my HMO stay at home is guaranteed rent of £300 PCM, paid to one tenants as housing benefit, at least that would cover some way towards paying the bills, normal monthly outgoing is around £400, in bills and council tax and home insurance, as well as allocated £50 pcm for replacement of appliances breaking down plus other hidden costs. Fortunately I have no mortgage commitment. So long as I am not paying their heating bills and other bills they can live for free for a limited period, but bills they must pay. No let on that.

Beaver

9:41 AM, 20th March 2020, About 2 years ago

Reply to the comment left by Mike at 19/03/2020 - 21:50
Absolutely right. My property is mortgaged but the mortgage isn't the only cost.

My tenants are already not straight with me. They already break things and claim these things just broke and I am unable to invoice them for this under the present rules. Light ripped off the wall by one of their children....I can't just leave the wires dangling. Towel rail ripped off the wall in the bathroom by one of their children...I can't just leave the broken tiles. It's a safety issue. There are still other costs.

And when these things happen they say, "...it just fell off the wall.." or "...the shower door fell off..." They don't say, "...my child was swinging on the shower door and it fell off, sorry." I can't invoice them under the present rules.

So when it comes to "...I've got coronavirus and therefore I don't have to pay my rent..." What is the standard of proof going to be? The GPs don't want to see anybody, it's telephone consultations only.

So are we going to be expected to have to accept a letter from a GP saying, "...patient X has symptoms that are consistent with coronavirus.." [this means the patient has a persistent cough] "...and therefore the tenant doesn't have to pay his rent?"

Under the present rules the only way that you can do anything about tenants that do persistent damage is to raise the rent. So, that's a no from me when I know that my tenants aren't straight with me anyway.

I don't think anybody thought this through. I don't believe that the Chinese came clean early on coronavirus. I think they'd had it for some time and they 'fessed up when they knew for a fact they wouldn't be able to keep it quiet any more. And in terms of the 'modelling' that government advisers are doing to try and spread the peak of coronavirus I think these are based on faulty data. I think coronavirus is already endemic in the UK and it's unstoppable.

So the problem is this. The government is presently collapsing the economy in an attempt to stop the NHS being overwhelmed in the short term. But british summer time is less than two weeks away and when we all open our doors and windows and go out in the fresh air a lot of those respiratory bugs are going to disappear in the normal way just as they do every year.

Even if a vaccine can be developed, shown to be effective and safe in time there won't be enough of it to go round next winter, probably not even for the vulnerable groups. So the virus will come back with a vengeance next winter spread by people who didn't get infected the first time and who couldn't be vaccinated.

What this means is that by kicking the can down the road now, the government is trying to protect the NHS from being overwhelmed at a time when the risk is low (spring and summer). And in doing so, by preventing the natural spread of the virus they are engineering another outbreak next autumn and winter when the risk for the NHS will be high.

And if somebody then comes along and says, "...if you can't pay your rent because of coronavirus then you can't be evicted" that means your landlord has to pay. For those like Mike they are fortunate enough for their properties to be unencumbered by mortgages, but they still have costs. For those of us whose properties are mortgaged they still have mortgages.

So if as landlords somebody were to expect us to pay what would our emergency powers be? Would we have right of entry to check that our tenants weren't just pulling the wool over our eyes? Would we have access to their medical records? And what would the level of proof be?

No way would I accept a GP letter without a definitive diagnostic test from a reputable laboratory with rigorous quality assurance.

Dennis Leverett

11:01 AM, 20th March 2020, About 2 years ago

Reply to the comment left by JJ at 20/03/2020 - 09:41
I was told yesterday by e mail that my rent insurance will cover the Corona Virus loss of rent, so fingers crossed, worth checking out.

Whiteskifreak Surrey

11:10 AM, 20th March 2020, About 2 years ago

Reply to the comment left by Dennis Leverett at 20/03/2020 - 11:01
What sort of proof will they require when making a claim?

Beaver

11:13 AM, 20th March 2020, About 2 years ago

Reply to the comment left by Whiteskifreak Surrey at 20/03/2020 - 11:10
Maybe. Although when my daughter recently took a Ryanair holiday and took out the Ryanair insurance she found out that the small print meant that she wasn't covered when she actually needed to claim. The Ryanair insurance was a waste of money.

So what burden of proof would the insurance company require for loss of rent due to coronavirus? There aren't enough diagnostic tests anyway. But the presence of antibodies in the blood doesn't mean you've been ill, it just means you've been exposed.

Dennis Leverett

11:42 AM, 20th March 2020, About 2 years ago

Reply to the comment left by Whiteskifreak Surrey at 20/03/2020 - 11:10
Good question, will ask.

Whiteskifreak Surrey

11:52 AM, 20th March 2020, About 2 years ago

Reply to the comment left by Dennis Leverett at 20/03/2020 - 11:42
Great, please kindly let us know. All policies are different but it will be useful to know a guidance from at least one insurer. Are you by any chance use P118 recommended one?

Dennis Leverett

12:03 PM, 20th March 2020, About 2 years ago

Reply to the comment left by Whiteskifreak Surrey at 20/03/2020 - 11:52
Perhaps Neil could answer that here as this insurance is through Letting Supermarket with their package.

Chris Sheldon

13:24 PM, 20th March 2020, About 2 years ago

Reply to the comment left by Dennis Leverett at 20/03/2020 - 12:03
Hi Dennis,

Any policy taken out prior to yesterday will cover the eventuality of a tenant not paying rent as normal regardless of the reason. The proof required is simply to prove that the tenant is 30 days in arrears via a rental statement. The nature of the arrears for policies purchased prior to yesterday are irrelevant.

I do know that our insurers (ive heard of several others as well) will not take on any new policies as of yesterday.

We havent received any guidance as to how it will work regarding court proceedings and the eviction part of the insurance however we have had confirmation that the rent guarantee will pay out.

Beaver

13:28 PM, 20th March 2020, About 2 years ago

Reply to the comment left by Chris Sheldon at 20/03/2020 - 13:24
So bottom line is, if you had rental insurance prior to yesterday then you *may* be covered, subject to the fine print of the particular insurance company you are with, but if you are a landlord and have landlord's insurance (legal requirement) but not rent insurance (not a legal requirement) then you are stuffed if your tenant defaults.

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