Tenant can't pay rent

I

IT_Steven

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I Apologize for the lengthy text - was writing as I was thinking.

So I just received the dreaded "won't be able to pay me rent this month" email from my tenant. :(

They informed me that apparently they are not going to get any of their salary this month. (Although I think they will still get their base pay and is using whatever avenues they can to reduce their expenses for the month - I have a few indicators why I think this might be the case)

The irritating thing is, is that they mentioned in the email that I can apply for a payment holiday from the banks in terms of my bond repayments. Never mind the fact that my bond payments have absolute zero relation to my tenants rental obligations, I don't even know where to start to explain this to them in simple terms - that this holiday is in no way some sort of "free money" I'm receiving that I can just pass on to them. As a matter of fact, seeing as interest is still levied, taking these payment holidays actually results in paying more in the long run seeing as you are just increasing your loan period (whilst not having capital reduction during this "payment holiday"). If anyone here can share with me how I can in simple laymen's terms explain to them the irrelevance of these payment holidays in terms of their obligation to pay rent, please feel free to share.

Anyhow, back to the topic at hand.
The whole situation is rather annoying, seeing as this tenant has been a pleasure to deal with up to date, and I have never had to deal with any payment issues. I would really like to assist them in whichever way I can and help them out during this difficult time, but I also don't want to feel like I'm being taken advantage of because of the lock down.

Ideas currently in order of relieve given:
-Rental for April is not due next month but is spread over the remaining rental term.
-Reduce rental to 70% for 1-3 months as necessary if lock down continues/salary isn't paid.
-Once off waiver for rental for April.

Not sure what else there is to do really.

My biggest worry is if (probably when) this lock down gets extended and the tenant still does not receive a salary - all of the above options fall flat then - and this could be 1-6 months or even more :oops: I mean the virus isn't just suddenly going to pack up and leave in 2 weeks time. What then?

Anyhow, guess I just needed to vent a bit and receive any suggestion, thoughts from any of you out there if possible,
 
Last edited:
IT_Steven said:
I Apologize for the lengthy text - was writing as I was thinking.

So I just received the dreaded "won't be able to pay me rent this month" email from my tenant. :(

They informed me that apparently they are not going to get any of their salary this month. (Although I think they will still get their base pay and is using whatever avenues they can to reduce their expenses for the month - I have a few indicators why I think this might be the case)

The irritating thing is, is that they mentioned in the email that I can apply for a payment holiday from the banks in terms of my bond repayments. Never mind the fact that my bond payments have absolute zero relation to my tenants rental obligations, I don't even know where to start to explain this to them in simple terms - that this holiday is in no way some sort of "free money" I'm receiving that I can just pass on to them. As a matter of fact, seeing as interest is still levied, taking these payment holidays actually results in paying more in the long run seeing as you are just increasing your loan period (whilst not having capital reduction during this "payment holiday"). If anyone here can share with me how I can in simple laymen's terms explain to them the irrelevance of these payment holidays in terms of their obligation to pay rent, please feel free to share.

Anyhow, back to the topic at hand.
The whole situation is rather annoying, seeing as this tenant has been a pleasure to deal with up to date, and I have never had to deal with any payment issues. I would really like to assist them in whichever way I can and help them out during this difficult time, but I also don't want to feel like I'm being taken advantage of because of the lock down.

Ideas currently in order of relieve:
-Rental for April is not due next month but is spread over the remaining rental term.
-Reduce rental to 70% for 1-3 months as necessary if lock down continues/salary isn't paid.
-Once off waiver for rental for April.

Not sure what else there is to do really.

My biggest worry is if (probably when) this lock down gets extended and the tenant still does not receive a salary - all of the above options fall flat then - and this could be 1-6 months even :oops: I mean the virus isn't just suddenly going to pack up and leave in 2 weeks time. What then?

Anyhow, guess I just needed to vent a bit and receive any suggestion, thoughts from any of you out there if possible,
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What percentage is their base pay of their full pay? Perhaps reduce or defer the rent using the same ratio.
 
I would ask for proof they are not getting paid this month or perhaps contact the employer directly to ask whats the real situation going forward, not only for this month but also going forward.

If from that you have confidence they will continue to receive an income except for this mishap, then try to recover the rent from the deposit (usually two months) and then they will have to restore the deposit over 3 or 4 months.

If you do not have confidence they will receive an income going forward, then letter of demand tomorrow, followed by approaching an attorney immediately to start eviction proceedings.
 
saturnz said:
I would ask for proof they are not getting paid this month or perhaps contact the employer directly to ask whats the real situation going forward, not only for this month but also going forward.
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Was mulling this over. Maybe this first and what you said below based on the feedback received.

saturnz said:
If you do not have confidence they will receive an income going forward, then letter of demand tomorrow, followed by approaching an attorney immediately to start eviction proceedings.
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Neuk_ said:
I unfortunately don't have any advice but cases like yours are prime examples of why simply allowing payment holidays for tenants or landlords is no ta solution as someone has to pay somewhere along the line.
Click to expand...

100% Agree.
 
ambroseg1 said:
I get the feeling they are taking advantage of the lock down. Your bond and payment holiday has fckall to do with them.
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I hear you. But on the other hand they might not be, and I could lose what up until this point, has been a good tenant. Think I will go follow up with the employer as mentioned and base my next decision on feedback received from them.
 
IT_Steven said:
I hear you. But on the other hand they might not be, and I could lose what up until this point, has been a good tenant. Think I will go follow up with the employer as mentioned and base my next decision on feedback received from them.
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A tenant is only as good as the last payment of rental received. Believe me they can go from being great, to absolute nightmare tenants from the first missed payment.

If the employer confirms their story, then what? How long will you let them live there for free?
 
Scooby_Doo said:
Give them April, and say you will recover April's rent divided over the remaining months on the lease.
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Yes, one of the ideas - issue is just what happens if it is the same story come May, June...
Or do you mean split remainder over rest of the lease and then wait until after April to see how things work out before starting eviction proceedings?
 
IT_Steven said:
Yes, one of the ideas - issue is just what happens if it is the same story come May, June...
Or do you mean split remainder over rest of the lease and then wait until after April to see how things work out before starting eviction proceedings?
Click to expand...
Absolute worst thing you can do is delay eviction proceedings.
 
ambroseg1 said:
A tenant is only as good as the last payment of rental received. Believe me they can go from being great, to absolute nightmare tenants from the first missed payment.

If the employer confirms their story, then what? How long will you let them live there for free?
Click to expand...

Fair point.

If employer confirms, I will stick to one of the options mentioned and then move over to eviction should future rental payment obligation not be able to be met - and explain this to them now already.
 
If I can give you any advice, make sure that they don't get behind too much. I've had it more than once where I was lenient and helped out a tenant through a difficult time and then it takes months to get back the money owed.

I now have it worked into my contract, you don't pay or you pay late, well the lawyer consultation fees become your problem. Worked well so far.

Of course, we have an unnatural situation right now, so use your loaf to decide how to deal with it, but do note, most tenants think of landlords as their personal banker. It's cheaper to not pay your rent than to go get a temp loan from the bank.
 
ambroseg1 said:
Absolute worst thing you can do is delay eviction proceedings.
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Honestly I would feel like a d1ck if I they are truly in a pinch and I told them I am going to start eviction proceedings now. I understand feelings have no place in business, but I am just not programmed that way - hence I would feel more justified in giving it a month or so.
 
Their mention of payment holidays doesn't sit well with me, that's not their concern and they should just plead their case...that's all. Surely they can use this knowledge of theirs to arrange payment holidays for their other obligations to ensure they still keep a roof over their heads. Without further proof of financial strain I would say they are taking chances
 
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