First Covid-19 rent reduction request received

[Perry]

Here's an example of unequal burden-sharing, received in the minutes since I made that last post:

As recommended by the Royal New Zealand College of General Practitioners, the Local Area Health Centre is immediately moving to protect the health of patients in waiting rooms by offering phone consultations. Normal charges will apply for phone consultations, prescriptions, etc.

Can't have the quacks and apothecaries missing out, now, can we? I.e.

As recommended . . . , the Local Area Health Centre is immediately moving to protect the income streams of those involved in the medical practice.

[mrsaneperson]

My feeling is the tenant should qualify for government assistance for rent, which artemis supplied information about.
I think a small drop in rent is fine in the interim that tenant finds themselves during the waiting period for their application to be considered.

I've dropped the rent around 5% for a few months, then it will return to normal but still reviewable depending on tenants circumstances, towards the end of the discount rent period.

[McDuck]

Yes, well, the flow of money around the local financial system is crucial.
So, a smart response would be towards that primary objective.
As it slows, everyone loses.

Don't be fooled by incomplete math.

The Government injected cash into the system in the form of lower interest rates.
If you got some of that cash, in the form of lower interest repayments, then keep it liquid.
Let the tenant keep it, to spend on food, hell, cakes and rum for all it matters.

The lower down the pyramid you leave the cash, the more people it circulates amongst.
That just the nature of pyramids, wider at the base.

Financially, one might consider this a time of holding ground, rather than progress.
A rent holiday might even be something worth considering, if you're in a really safe financial position.

[donna]

The sentiment is ideal, but it needs to be across the board. I.e.

Councils (Rates)
Insurance companies (Premiums)
Gummint / tax / IRD (Scrap min. wage increase; suspend provisional tax payts)
Electricity suppliers (daily / fixed and per unit charges)
ACC (levies)
Banks (interest rates, repayt holidays, interest only, etc.)
Food suppliers (???)
Others?

If everyone takes a hit on a pro rata basis, we'll get through it.

This should be mandatory across the board and Government led, otherwise many will fall through the cracks while others get an unfair advantage.

cheers,

Donna

[Perry]

This should be mandatory across the board and Government led, otherwise many will fall through the cracks while others get an unfair advantage.

That's the sort-of thing that could lead to anarchy.

I.e. When those at the bottom of the socio-economic 'heap' feel that those further up the heap are not experiencing a proportionate / commensurate level of 'pain.'

That's the stuff of many revolutions past.

That "equal pain" scenario is something that seems to be missing from all of Taxcindarella's pronouncements, thus far.

[learner]

For investors who have commercial properties, and use the ADLS Lease (6th ed. 2012, v5), how do you interpret Clauses 27.5 and 27.6 in light of Alert Level 4? These clauses allow tenants to cease the payment of a fair proportion of the rent and outgoings during the period when they are not able to access the premises. They were added to ADSL leases after the Christchurch earthquakes, but it could well apply in the current covid-19 situation.

The clauses potentially allow the tenant not to pay the rent and outgoings for up to 4 weeks at present, as Level 4 prevents non-essential businesses from operating for 4 weeks (and potentially longer). This could have quite an effect on landlords.

[Beano]

Yes that is correct.
I believe it does apply .
Mine are mostly 6 to 9 mths

[Merlot Mike]

I just had a request from my tenant for a four week rent holiday during the lockdown. He operates a commercial kitchen for hire. He's a good tenant generally, this is his fifth year. Is there a possibility that food preparation may be considered an essential service and that he could still operate? Otherwise does anyone know what sort of general government assistance his business might be eligible for?

[Perry]

There's a list of essential services, here. (Down the page a bit)

[Merlot Mike]

That's interesting. Anyhow I do believe that he is having a rough time - I was thinking about giving him 50% off for the four week duration. Any feedback is appreciated.

[jimO]

That's interesting. Anyhow I do believe that he is having a rough time - I was thinking about giving him 50% off for the four week duration. Any feedback is appreciated.

if he goes tits up you wont get anything and little chance of finding a new tenant

[Merlot Mike]

That's what I'm concerned about. So 100% or 50% off for the month? ...or allow him to defer the months rent and pay it off in installments over a few months starting after lockdown?

[sakoman]

I have just given temporary rent reductions to two of my commercial tennants, I gave one 50% rent reduction for two months to be then reviewed, the other I gave one month rent free plus two months of 50% off, they are both very good tennants, and I felt I should support them as they are very affected by this situation - Rates and Insurance is to be paid as normal.

[PT88]

The thought of not receiving or reducing rent has been freaking me out. We have 2 rentals, nothing flash and the rent is our only source of income. We don't receive 1 cent of benefit from any source and pay taxes. We are not greedy landlords and we have bills to pay for rentals(rates, insurance, property management fees and our own home expenses. The Billions dished out we will not benefit 1 cent from. Prepared to flow through any "reduction" given to landlords to tenants. Reductions beyond will need careful thought as we have no other source of income and still have expenses.

[One]

One of our properties is a 6-tenant house and one tenant is on minimum wage and lost his job yesterday. He's trying to get a new job but seems unlikely at the moment. He asked for free accommodation. I told him to ask his company about the govt subsidy.

The mortgage makes me nervous but we'll cover him if we have to. I'm in the lucky position of having a safe decent-paying job, so we can carry the risk much much better than he can. And I can't see us being able to replace him right now, even if I was prepared to kick him out onto the streets, which I'm not.