The ethics vs financial realities of paying a tenant to leave?

The ethics vs financial realities of paying a tenant to leave?

15:16 PM, 15th November 2022, About 2 weeks ago 39

Text Size

Hello, We have an awkward freeloader who’s stopped paying. If it takes 6-12 months to evict him we will have a lot of unpaid rent (Yes, we can sue, but CCJ’s may go nowhere with a “paper” debtor), plus legal/court fees, plus whatever state he leaves our property in.

It might be worth considering paying him to just go.

Has anyone got experience of having done that?

What are the rights and wrongs, the pros and cons, how do we arrive at a sum, and how might it work – we can’t pay till he’s physically out, would it be a transaction between solicitors?

If he stands to “gain” by a long rent free period I guess it would be a few £thousand.

It sticks in the craw but it’s got to be worth considering.

Thank you,

Grahame



Comments

Jerry stone

11:33 AM, 16th November 2022, About 2 weeks ago

The simple answer is yes.
I unfortunately have considered doing it.
It does stick in the throat but you have to way up the cost benefits.
In the end we just agreed to write have the debt if they left.
W threatened a section 8 notice as that would have prevented them gaining another property.

Adrian Jones

11:33 AM, 16th November 2022, About 2 weeks ago

Have you considered what you would do if he asks you for a character reference?

David Houghton

11:34 AM, 16th November 2022, About 2 weeks ago

As soon as he involves a solicitor you are paying his fees too and they will be better than at negotiations than you.

Offer him cash on departure if you really must. Then think about selling up. Because you will be prey

Graham Bowcock

11:46 AM, 16th November 2022, About 2 weeks ago

You need to think what it's worth to you to get the property back. How long can you afford to leave the tenant in situ not paying rent? What will the debt look like?

If the tenant is amenable then sit down with them and make them a decent offer. You can lay it on about their future prospects if you get a CCJ; that will work for some but not all. If they are generally ok but just fallen on hard times they may be more open to discussion.

Where will they go? Supply is tight so they may genuinely find it difficult to move, even with your money.

If they agree, get a proper surrender document in place, with agreed terms on how you expect the property to be left and only pay them on vacation. It may be best to get an agent or solicitor to hold, the money for release on the agreed terms.

Graham Bowcock

11:46 AM, 16th November 2022, About 2 weeks ago

You need to think what it's worth to you to get the property back. How long can you afford to leave the tenant in situ not paying rent? What will the debt look like?

If the tenant is amenable then sit down with them and make them a decent offer. You can lay it on about their future prospects if you get a CCJ; that will work for some but not all. If they are generally ok but just fallen on hard times they may be more open to discussion.

Where will they go? Supply is tight so they may genuinely find it difficult to move, even with your money.

If they agree, get a proper surrender document in place, with agreed terms on how you expect the property to be left and only pay them on vacation. It may be best to get an agent or solicitor to hold, the money for release on the agreed terms.

Fiona

12:37 PM, 16th November 2022, About 2 weeks ago

Yes. I've done it. It's worth it. Does stick in the craw, and entails being, "on their side" But it's ok.
I've also done the eviction route, and it's hard too. Probably much harder now.
Always done cash direct. And always signed deed of surrender.
I can HONESTLY say though, that I have NEVER crossed a line, at giving a good reference to a bad tenant.
I like to sleep at night, and consider it bad karma.

Chris @ Possession Friend

14:06 PM, 16th November 2022, About 2 weeks ago

@Graham,
Would you like to discuss ?
We've had many similar conversations and they can vary.

Graham Bowcock

14:41 PM, 16th November 2022, About 2 weeks ago

Reply to the comment left by Chris @ Possession Friend at 16/11/2022 - 14:06
Happy to discuss Chris. How do you want to do it? You could phone or email - I'm easy enough to find on Google! Cheers, Graham

Chris @ Possession Friend

15:10 PM, 16th November 2022, About 2 weeks ago

Enquiries@PossessionFriend.uk

I had a 'conversation' with a Tenant last week at the request of the landlord.
( Yes, I do all kinds of work, not just Possession )
It was the landlords view after our discussion, that she wanted me to offer and negotiate a settlement with the tenant ( I have done this before, and there can be advantages to someone other than the landlord doing the negotiating. )

Tenant wouldn't accept initial offer, nor the increased offer.
Certain (legal) actions were taken which I can't elaborate upon but the opportunity for an RRO by the Tenant was removed - and so was the Landlords offer !

No HMO license, no RRO and no ex-gracia payment. Each circumstance differs of course and sometimes there are means of achieving the best outcome ( not always, but where they exist, we use them )

Jerry stone

16:02 PM, 16th November 2022, About 2 weeks ago

Perhaps explain what RRO means?

1 2 3 4

Leave Comments

In order to post comments you will need to Sign In or Sign Up for a FREE Membership

or

Don't have an account? Sign Up

Landlord Tax Planning Book Now