9:31 AM, 14th April 2020, About 3 years ago 26
This is my first ever discussion starter – we are really desperate, don’t know what to do and hope the community here might be able to help.
We specialise in student rental. Fixed term for one year, 4 students on one AST. No HMO.
The University of Surrey decided to close early and cancel rent for the 3rd term for those who live in students’ accommodation and published this plea:
“The University has therefore cancelled all rent payments due for term 3 for over five thousand students in University managed accommodation who have chosen to leave early.
“Not all students are able to be accommodated by the University however, and there are private landlords and providers who have not yet taken the same action to cancel rents for students who have left. It is indeed disappointing to see that many private providers have chosen to prioritise their shareholders over their student occupants, especially in light of the support being given by the government in the form of mortgage breaks.
We are today calling for all providers of student accommodation to follow our lead; do the right thing and relieve Guildford’s students of the obligation to pay rent for empty rooms.”
They also sent the following letter to their students:
“Following on from the news bulletin regarding private landlords we have the following information for you, a summary can be found under Renting from Private Landlords here. There is also a Students’ Union Facebook live session at 3pm on 2nd April with Shelter.
“It is likely that you will have signed a fixed term contract which remains legally binding despite the current health pandemic. As such in theory rental payments must kept up regardless of whether you are living in the property or not as per the agreement. We are however in unprecedented times and would like to think landlords and agents would show our students some compassion with regards to keeping up rental payments.
“If your landlord agrees to a rent holiday period you will be required to pay this back & need to agree a repayment plan. If you do not pay your rent your landlord can pursue your guarantor & this may lead to a County Court Judgement against both parties.
“The best way to deal with the current situation is to ensure strong communication is kept with your landlord and come to an agreement with them that all parties are happy with. In general the terms to be reconsidered will be:
“Early Termination: Will your landlord allow you to leave the property sooner than originally contracted? This may not be today but may be at a date between now and when your contract is due to end that is fair.
Rent Reduction: Would you landlord consider reducing the rent to ease the pressure on you financially, this may be justified if you are not actually staying in the property for the coming weeks.
“Find out further information below or review the government guidelines here.
As per your contracts your landlord has the right to refuse the above proposals which is why it is key to outline why you are asking to give them a chance to empathise with you as much as possible. Points to include will be:
“Loss of income: Have you lost your job or means to pay the rent?
Having moved out: It can be argued that you have had to move out of the property through no fault of your own and as such cannot access the accommodation you are paying for.
The University’s position: The University of Surrey has outlined that we feel landlords should do what they can to help students and relieve financial pressure, as essentially that’s the “right thing to do”.
“Be aware you will still remain liable for your bills until you are released from your contract & your supplier has agreed to terminate your agreement with them also. If you withdraw from university you will also become liable for council tax until your tenancy is terminated. Ultimately it is going to come down to a case by case basis, each landlord will take a view and compromise or not.
“Always communicate with your landlord in writing, ideally via email. If you have a phone call conversation follow it up with an email to outline what has been talked about. If you have exhausted the above options & are unable to come to an agreement with your landlord, please contact us to see how we may be able to support.”
Students left in haste (quite understandably), leaving their stuff in the property.
We notified the insurance that the property is vacant and go there about 3 times a week, also installed light timers. We also cut the grass and are putting bins out every week.
They passed to us both above letters asking us to release them from the tenancy. We did not agree – we are unable to lose the 3 months rent completely, and in the same time to pay the bills (however small), 100% Council Tax and increased insurance premium, as well as a tax on mortgage.
We offered initially 17% reduction of rent. That was not accepted as not meeting their expectations.
We then offered 27% rent reduction – it did not meet their expectation either.
Eventually they offered that they will pay approx 10% of monthly rent. That is nowhere near to cover even the mortgage, let alone tax and other expenses.
We think we have been rather cooperative. We tried to reason with them, but they are not listening at all, they think we are making tons of money and should do whatever big corpos and Uni did. They have chosen to leave, and were not forced to.
We do not know what to do now? Should we accept that 10% are offering? (It is rather astonishing they all have the same circumstances and cannot afford to pay a bit more or at least a different amount). In the circumstances should we tell them now that we are going to keep the whole deposit (1 month rent) as per the relevant clause in the AST to cover the unpaid rent? Or shall we wait until the end of tenancy in July? What would be the consequences?
We do not want to go via a court route.
Even if they vacated the rooms we would not be able to rent the property out, as we have the next AST from middle of August. And it is not possible to rent now..
I will be extremely grateful for your advice.
Many, many thanks in advance.
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Dr Rosalind Beck
10:53 AM, 14th April 2020, About 3 years ago
I think you need to go back to the start of this process and request full payment of all rent due. If you feel you need to give a reason (you don't), you can say that you are not in a financial position to do anything else. Less is more. You have the law on your side.
10:56 AM, 14th April 2020, About 3 years ago
Don't mention keeping a the deposit as rent. Its irrelevant, maybe inevitable, and it will all come out in the wash. Unfortunately you may need that deposit for damage, disposal of stuff etc. and if you've committed to using it as rent that limits your options. Cross that minor bridge when you come to it.
Fortunately I don't face this situation myself. Yet. But I would be distributing the various extracts from gov't. literature that state the rent will still be payable, there is no excusing of payment inferred by the careless talk of "holidays".
Also explain that just because the uni. have the option to write off rent, it doesn't mean you can. No-one could have been expected to see these circumstances coming, and no students will have decided on their lodgings based on the relative protections of uni. accom. vs. PRS, but its going to be one of life's lessons for them. They can't walk away from a signed commitment.
I'm sure you'll give some leeway but not at the expense of your financial situation.
11:13 AM, 14th April 2020, About 3 years ago
We have been speaking to other student landlords and we are all seem to be in a similar situation. It pays to stand firm whilst showing sympathy for genuine cases.
The vast majority of students are not suffering any financial hardship as the government is still paying their grants and they are living at home so have reduced costs.
Student housing is a business and small private landlords are completely different to university accommodation and large providers, in terms of their resources.
I have some letter examples I can send you to send to tenants but I would write back saying that the last discount was your final offer and it needs to be accepted by them in writing within 7 days, say the discount will only be applied at the end of the tenancy when all rent is paid unless they provide evidence of financial hardship in which case they can agree to a payment plan. If any rent remains outstanding and they do not follow an agreed payment plan then you will go to court and follow the normal procedures.
Of course you want to help, if anyone has severe financial difficulties but they need to send you evidence, wage slips, bank statements etc. They also need to access the government help available to them. You could send them links for these. Also Martin Lewis of Money Saving Expert has an excellent video I am told offering advice to students in which he makes it clear rent is still payable at the end of term.
Make it clear that you are carrying out all safety checks and maintaining the property as normal. Tell them there is no need to collet their possessions until the date the tenancy ends as the house is theirs until that date. Do not accept any return of the keys. Do not give any deposits back until the end of the tenancy. Let the tenancy run as normal. You are entitled to keep the deposits if they have not paid their rent. Keep a record of all correspondence and keep it to written format only if possible.
You might not want to go to court but nor will they or their guarantors.
We are offering an allowance of £300 per house for cleaning and small maintenance repairs if all rent is paid plus a reduction in energy bills if less energy has been used than the previous year.
Everyone needs to understand that most landlords do not own their property without mortgages, HMO's have high running costs, most landlords are reasonable but no-one walks into a shop and asks to take the goods away for free. Landlords should unite and the government has made it clear that tenants will still owe rent. They can only ask for a 3 month period without paying it, if you have applied for a 3 month mortgage holiday. We have been advised from doing this. If they do not pay it then they will still owe it at the end of the tenancy.
I hope that helps. It is a worrying time and as usual it is the landlords who are being portrayed as greedy, rich individuals when many offer fantastic safe accommodation and run it as a business. Many landlords I know are now suffering from financial hardship due to the Universities advice, it is time to change the narrative.
Chris @ Possession Friend
11:40 AM, 14th April 2020, About 3 years ago
Did you miss our article last week, offering Free Advice ?
11:53 AM, 14th April 2020, About 3 years ago
Agree with the earlier advice to retart the process. As part of this I'd want to reset the students' unreasonable expectations. The universities have already gone cap in hand to the government for extra money and the large corporate landlords. (Assuming you've charged normal PRS student rates not corporate higher rates). The support for landlords is to delay mortgage payments to help tenants who have reduced incom- it's not a reduction for you and students don't have reduced income.
Don't tell anyone you won't use the court route. A parent guarantor will only hear one side of the story and need to realise they might be required to pay after all.
Much later, if you can afford to compromise, then I would see a 20% reduction as my final position before court. Large numbers of others are having to accept 80% so it will be seen as fair on both parties.
12:16 PM, 14th April 2020, About 3 years ago
I am also in the student rental market (small portfolio Landlord). I am playing it right down the middle and citing the government document released (link below) that requires no change for tenants or landlords. Paras 1.1 & 1.6 refer. I have sent this to all my students and so far so good! Like others I do not wish to take matters through the small claims court but this is my primary means of living so I have to maintain a firm line and have that and the Guarantors as a backstop. I think we all need to stand firm on this matter; whilst I am sympathetic to their circumstances (i.e. year cut short) they are still getting their loans paid and a legal contract is a binding! I had a group try it on but as soon as I sent them the link they paid. Landlords can potentially get a payment holiday (although I hear some lenders are refusing for HMOs) but it's a misnomer - you still have to pay the loan back so it's no holiday!
Agree with others - reset and mention that advice has now been been published!
I am more concerned about September if all this isn't over. I have ASTs all signed up and they have paid the 1st months rent so in theory the contract is already underway. Anyone got any thoughts?
13:01 PM, 14th April 2020, About 3 years ago
thank you very much for the enormous response to my questions. So much good advice here, brilliant links and all that is really highly appreciated.
As Jon Williams we are also very much concerned about the situation in September. But of course for the time being we need to sort out the current situation.
Please keep your comments coming in! Thank you!
13:42 PM, 14th April 2020, About 3 years ago
I would simply reply saying 27% rent reduction is the maximum I can offer and would represent a large saving. You have 7 days in which to accept this offer, failure to agree a rent reduction will mean 100% of the rent is due. As per the letters failure to pay your rent could result in yourself and your guarantors potentially getting a CCJ which could have massive financial consequences.
In real terms the agreement ends in July, you have the deposit so obviously you are not going to agree to remaining rent of less than this deposit. I would take a hard stance and see if they cave or pay the rent, at the minimum you will get the deposit and you wont pay council tax (or possible utilities?) Which is I am guessing more than 10% of the remaining rent. Also if they do not pay you can write a strongly worded letter to the guarantors demanding rent payment, you might be surprised how many will pay.
I can understand their frustration that other students have had the rent written off however this means they are trying it on.
13:48 PM, 14th April 2020, About 3 years ago
I agree with most of the other posts above.
Under no circumstances take back the keys and with them the liability for the utility charges and the council tax – that will just make your own financial situation worse.
In addition to the strong written guidance from the Govt about the fact that rent is still payable and that a repayment plan should be agreed, another resource that might help you reinforce the point is the BBC Moneybox podcast of 8 April, called 'How do government rules protect tenants and landlords affected by coronavirus?'. Of course there's all the usual tenant biased narrative, but the bit that could be useful for you comes towards the end of the broadcast around 24:50, where a guarantor is seeking advice regarding payment for his son, a student. The advice coming back is very emphatically that there is a contract, so this may also help you in reiterating that point to your students.
A landlord friend has a contract/lease direct to Uni of Surrey for a property which the Uni allocates to students, collects the rents and manages the property. So far, he has not heard that the Uni is looking for any concessions on the rent or the agreement - and obviously hopes he will not do so. Likely the Uni's lawyers will advise that they cannot wriggle out of the arrangement. The Uni's communication to students/landlords with regard to PRS landlords therefore appears disingenuous.
More generally, the fact that a tenancy agreement is a legal contract where both parties have obligations seems to be getting lost in many of the discussions. If the UK suddenly decided that contracts can be unilaterally voided or avoided as a result of Coronavirus would be a very worrying and retrograde development indeed.
Landlords are getting no support whatsoever from the government, whilst students are getting their loans paid and guarantors may well be being paid or furloughed at 80%. There is no reason that you should have to take 100% of the financial hit on this. Besides, the tenants are still in possession if their belongings are still there, and they have yet to perform their part of the contract (and will be unable to do so) to deliver the property back to you at the end of the tenancy in good order, FW&T excepted. Most likely that's what you are going to need the deposit for.
Good luck and please keep us posted.
14:13 PM, 14th April 2020, About 3 years ago
Don't these students have guarantors? If so chase them.
Unfortunately, I fall into both sides of this nonpayment equation but all my tenants are presently paying. As no doubt will I too.