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!

Dilep


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Comments

Martin Thomas

12:13 PM, 25th March 2021, About 3 years ago

Reply to the comment left by Ian Narbeth at 25/03/2021 - 11:28
Excellent advice Ian - as usual!

April

8:03 AM, 27th March 2021, About 3 years ago

Reply to the comment left by Derek And jen at 25/03/2021 - 09:58
This is shocking! This sort of behaviour should be called out by landlords who are affected. Perhaps a note to the admins to say who the perpetrators were so that if they get sufficient complaints about the same people they can warn us to be aware of their business methods.

April

8:05 AM, 27th March 2021, About 3 years ago

Reply to the comment left by Dilep at 25/03/2021 - 11:11
I wonder if you'd consider contacting ARLA about their business practices. They are only "reputable" because they have paid their membership. I'm would think that ARLA would be interested to hear the situation in which you find yourself and might be able to put on some pressure at their end.

raj beri

8:41 AM, 27th March 2021, About 3 years ago

Best to show this to a legal person who understands the from a property investor point of view

19:04 PM, 27th March 2021, About 3 years ago

Hi Dilep, I read this post with interest. We own a few HMO’s in NW London and manage a few on behalf of Landlord clients. We run a small letting/sales agency, also ARLA members. Covid has indeed had a near catastrophic affect on the house share market in our area. Rents have tumbled, for some rooms as much as 40%. We have fought tooth and nail to fill our rooms, we have to spend a fortune on Spareroom ppc and really work very hard to fill our houses. I am often approached by Rent2renters and other agents, the first thing I ask them is how on earth they can guarantee anything during the worst crisis of our lifetime - and why would they take on such a silly liability. I have been renting rooms in London for 20 years and my business is geared up for it, why do they think they can do a better job than me - I ask them 🙂 I suspect Dilep, that you entered into this contract before Covid? I doubt you need to pay for lawyers, just read the contract. Why does it say about changes in rent and perhaps more pertinent, terminating. If they can’t live up to their promises due to a change in market conditions it should be them serving you notice so they can get out! But then you still have the task of maintaining occupancy. The real question is whether this agent is ‘on the ball’ enough to cope in this market. In the old days anyone could post a room on Spareroom or Rightmove/Zoopla and fill it. Now you have to work really hard. Ask them how much they spend on Spareroom PPC? What sort of percentage reduction are they proposing? If it’s only 10%/20% then you may take a view on their ‘guaranteed rent’. I’m happy to give you a professional opinion on what sort of rent you should be getting- if it’s in my area of coverage - I’m pretty clued up on all rents in North London, zones 1-3. Plenty of questions 🙂

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