First Covid-19 rent reduction request received

[Merlot Mike]

Will your lawyer be discounting fees by 50%?

Probably not but I understand your point. How are you approaching this situation with your tenants? Is that particular clause in their lease?

[Perry]

I don't have tenants covered by a lease like that, so, no.

For me, it's a matter of keeping them informed and watching what develops.

One is 'bailing out' for a long drive home, this afternoon, towing a caravan. I provided him with the info quoted below, saying pull over and have a sleep if need be, rather than risk going to sleep behind the wheel.

If you're in a different part of the country, you should make immediate arrangements to get home. There will be allowances for people not able to do so by Wednesday, but you should call the Covid-19 information helpline on 0800 779 997 to let them know your circumstances and get advice.

[Bradley]

One of our commercial tenants owns a licenced restaurant on our property. We've provided a lease reduction to 50% for next month on the proviso (among other things) that all outgoings continue to be paid in full.

The situation for them is very grim: They have at least four weeks of no income, and no insurance will cover them for this situation, and the stigma of COVID-19 transmission in hospitality will remain for some time. They've always paid the lease and outgoings on time, have never given me any trouble, and are a couple of young go-getters. Given the situation, I'd rather take the hit and get at least some income, than have them liquidate and get nothing, while simultaneously being unable to re-tenant the property due to it being hospitality related.

I would encourage everyone to be reasonable in these sorts of situations that are no fault of the tenant, and that could also burn the landlord. Obviously however, everyone has different commitments/perspectives, so this arrangement may not be suitable.

In terms of residential tenancies, I don't own any, so can't really comment.

[skid]

Corona Virus...rent reduction....whats fair

Obviously some tenants are going to take a hit .
Some have asked for a conversation on a reduction of rent.
Im interested in what the general concenses is on whats fair and resonable

[Don't believe the Hype]

I will offer the same level of discount I get from countdown or New World through this period...

Oh that's right, they've announced a removal of their regular discounts under the guise of not encouraging people to only buy what they need.

https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12319733

[Anthonyacat]

Any reduction in rent (or indeed, failure to increase rent in line with the market) is charity on your part, given to your tenants.

If you're in the position to be charitable and have the desire to do so, that's excellent and I'm very happy for you. You then need to decide where your charity is best targeted. Are your current tenants the best focus for your goodwill? Perhaps! But you do need to think about it.


I am personally not planning to reduce any of my rents - though I will of course freeze rents for at least the six month period that is legally mandated. Tenants having virus related difficulties should be supported by our government. I understand their broad-based lockdown/control plan does give some measure for this.

In saying this, I don't presently have any excellent long term tenants, with quite a bit of turnover in the last 12 months across my portfolio. Perhaps if I had a nice family who had been great tenants for several years I might think differently.

[Sandie]

Well said Anthonyacat

[artemis]

Agree, better to leave to the government as they have the processes in place to determine support levels. Landlords don't.

Meantime I have offered some tenants payment to do some extra gardening while they are at home. Another is a tradie and can do some simple property maintenance.

[Perry]

Spare a thought for the many back-packers and tourists who really do not have a home to go to in NZ for the 4 weeks mandated.

After a last minute bus-ride dash from Auckland to Hawke's Bay, we're now 'sheltering' one young fellow in an empty cabin on the proviso that the 14-day self-isolation requirement is adhered to. After that, we can socialise.

He's told us that his parents in Europe are greatly relieved.

[donna]

Well done Perry. It's a very stressful time for everyone. Not sure if anyone noticed but did you see that the lockdown is for a number of weeks - i.e. after 4 weeks an assessment will determine whether it will continue as level 4 or drop back to level 3. I think just 4 weeks at level 4 might be optimistic.

cheers,

Donna

[Perry]

The possibility of level 4 for longer than 4 weeks is a horrible spectre, isn't it?

The initial four weeks encompasses Easter, too.

Another blow for the tourism industry.

No Easter Sales for retailers, either.

[hawkeye]

It may be time to introduce some of your more unreasonable tenants to the economics of owning the rental. Agree to waive rent left over after expenses are paid. They might get a shock to see that they owe you.

[Learning]

Anyone else noticed that the "4" in "4 weeks" has disappeared from all official publications.

[Perry]

Shock! Horror!

You can't be suggesting that the W'gton woodenheads were not totally open and honest with their employers, are you?

Say it isn't so, Cindy Tooth Fairy.

[simongu]

So far have only had 1 (of my 7) residential tenants request a rent deferment - they are proposing to pay 50% and work out a scheme to repay remainder once his job comes back (works in hospo poor bugger). I have agreed to this but wonder if I should be asking for some documentation that his employer was refusing to pay any wages (he is already applying for the Subsidy part) - do others think that is reasonable? Legal?