HMO Covid-19 rent reduction conundrum?

HMO Covid-19 rent reduction conundrum?

14:37 PM, 24th March 2021, About 3 years ago 15

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Hey 118ers, I have a contract with a letting agent for my HMO which has a guaranteed rent of x amount pcm. Recently, they have been asking me to reduce the rent due to the Covid-19 situation and in their words ‘the huge amount of people leaving London’. To save the hassle I have agreed to reduce the rent to help them only until they find new tenants, but they still refuse to accept my proposal

Now they have said we cannot pay the full rent because we have rooms empty and no one to fill them. I have argued the case stating if you cannot pay your rent then lower your asking price because it is clearly too high. They then said if you cannot reduce the rent we will serve notice which I accepted but then the next day they contacted me and paid the outstanding amount straight away! Basically trying to call my bluff

Now they are saying they cannot honour our contract, and they will pay what they can and only pay the full contracted rent once the rooms have all been filled. Surely a contract agreed is exactly that, isn’t it? I have tried being fair and reducing the rent for the meantime, but they still will not pay their contracted rent.

Please help!


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8:09 AM, 25th March 2021, About 3 years ago

Is this one of those rent to rent crew who have been on a 2 day training course or a nationally recognised company

Derek And jen

9:58 AM, 25th March 2021, About 3 years ago

Hi it might hurt , but take back possession of your property as soon as you can !. The excuses grow, the arrears along with the excuses . Our pain cost us over £20k ! But at least have properties back , to be fair in good condition at least snd relet , but 13 months , including being Mr nice landlord and 3 month rent holiday to help. We had the circumstance of take them to court , sue and wait whilst they carried on not paying . Nice business if you’re a tenant . Or , here’s your property back in exchange to write off all unpaid rents and arrrears and payments holidays !, again nice business if your a tenant ! But over now . Suggest don’t let it fester , it sadly doesn’t improve , and there are plenty of great tenants about that will respect your prank Honour their obligations . Wish you all the best in your decisión. Oh by the way the negotiations started august ! , finalized January and properties handed back end of feb ! I think this might be termed tenants gravy train , as all those who stayed in the property actually did all pay their rents I’ve discovered , and vacancies they claimed were not quite as stated either ! So what did the main tenant holding the contract do with the funds ?


10:48 AM, 25th March 2021, About 3 years ago

There are no easy answers to how to enforce or get out of rent to rent contracts. You will likely need legal advice from a specialist. In the meantime, I suggest you google rent to rent scam and read everything and watch all the videos. Sadly, you may be horrified by what you learn.


11:11 AM, 25th March 2021, About 3 years ago

Reply to the comment left by RODNEY CRABB at 25/03/2021 - 08:09
Hi Rodney,

They are a reputable letting agent governed by the ARLA


11:12 AM, 25th March 2021, About 3 years ago

Reply to the comment left by David at 25/03/2021 - 10:48
Hi David

The company is reputable because I researched them before giving them my property and signing the contract.

Ian Narbeth

11:28 AM, 25th March 2021, About 3 years ago

Hi Dilep
It will be necessary to review the contract to see what is "guaranteed". If the agents have indeed guaranteed you £X per month then they are legally obliged to pay it and will have to top up any shortfall. Your starting point is to insist on that. They secured the instruction to act as agents by giving the guarantee so they must take the commercial risk of not obtaining the minimum rent.

That said, who is managing your HMO? If it is the same agents then you need to ensure that they are complying with all relevant regulations and also that they do not just leave you high and dry when their contract ends. I suggest you take legal advice as cases like this depend on the specific circumstances.


11:38 AM, 25th March 2021, About 3 years ago

Reply to the comment left by Ian Narbeth at 25/03/2021 - 11:28
Thank you Ian, they are the managing agents so I will be checking 100%

Freda Blogs

11:40 AM, 25th March 2021, About 3 years ago

Unless your contract with them says they can vary the rent according to rental levels and/or occupancy rates, whether you accept or not is at your discretion. It’s not for them to unilaterally amend the rent. If rents went up over the period would they pay more to you? Doubtful.
Ultimately it’s up to you if you wish to (try and) enforce the contract to the letter, as they assumed the risk of achieving certain rental levels. On the other hand is it worth conceding something to keep them in occupation and a rental flow continuing? If so, in your shoes I would want to see evidence supporting their assertions, and once satisfied, formalise the agreement and time limit it to a period of x months, not keep it open ended or nebulous.
Could you give them NTQ and manage the property yourself and retain all rents?
You say the tenant is a firm of letting agents - so most likely they will be receiving every government Covid incentive under the sun, business rates, furlough etc, all the time doing well in a hot market, more so if they are sales agents too.
I have had unhappy dealings with one well known firm of letting agents which is exploiting the fear of its (commercial) landlords of their occupational properties, where despite the buoyant market and incentives received, they are seeking significant rent concessions and renegotiating lease terms, even though the business is doing well.
You may be another victim of this sort of unscrupulous behaviour.


11:46 AM, 25th March 2021, About 3 years ago

Reply to the comment left by Freda Blogs at 25/03/2021 - 11:40
Hi Freda, thank you for your email. I have thought about managing the property and tbh I sometimes lose sleep over it because this property is my family's breadwinner. Like many of our fellow 118ers, I have a full time job (which I have been her for 21 years) 3 children and numerous tenants whose welfare I have to consider during these testing times.

Ian Narbeth

12:08 PM, 25th March 2021, About 3 years ago

Reply to the comment left by Dilep at 25/03/2021 - 11:38
Depending on what fee arrangement they have (do they just take a percentage or are they taking an excess over the guaranteed rent?) you could offer them a higher fee if they beat certain levels of rent. That gives them the prospect of catching up on their losses and incentivises them to get your rooms filled. This will only work if they are competent and prepared to tough it out until times improve.

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