I have an older tenant who has been living in my mobile home park for 20+ years who recently had their social security funds garnished by an unpaid student loan from getting his masters degree . He is asking for a 25% reduction in lot rent due to not being able to afford his bills. My park has a few different rental rates based on location and length of tenancy (Delaware has a form of rent control, rent can only be raised once a year with the consumer price index). This particular individual has the cheapest monthly rent in the park, $44 less than a new tenant’s rate. My business partner thinks I should reduce his rate temporarily because his length of tenancy, he is old and can’t work due to taking care of his unhealthy wife. My case is that, his debt and liabilities has nothing to do with lot rent rates. I do not want to lose this tenant so I offered him to pay what he can and I will waive his late fee for next month and catch up when he can; I will not evict him as long as he makes an effort to pay something and keep open communication. I do not want to lower his rent temporarily because that would be arbitrary and capricious and I would have to do the same for any other tenant who does not have enough money to pay rent. I am curious what other mobile home park owners, managers would do in my situation. I don’t want word to spread that I am open to rent reductions for situations like this however I don’t want to be stuck with a vacant home as well. Thoughts?
Law prevents more than 15% of social security wages being garnished for student loans, so it would be good to understand how his living situation is getting priority over other bills. His wages could be garnished for the foreseeable future and this would be a long term reduction if they are not able to work. If the tenant’s only plan to make the numbers work is to get a reduction from you - then that is a problem.
The tenant needs to get familiar with this: https://studentaid.ed.gov/sa/repay-loans/default/get-out#loan-rehab
Other things to consider:
After what period of time does it make more sense to replace this person with a tenant paying market rents compared to your reduced rate? If he owns his home has anyone played with a Reverse Cash program (e.g. Park Owner gets credits to purchase the tenant’s home after X amount of time)? Does tenant have any other assets you can use to compensate / collateralize for the reduction (e.g. car, collectables, etc)? Can tenant start doing some work around the property to ‘earn’ the reduction - think mowing common areas, have skills as a tradesman?
I would not offer any reduction. If he can not afford his present rent and wants to stay he will find a way to pay.
Once you turn a business into a charity there is no way of going back.
The most I would do is allow a short grace period but he would have to catch up.
Send him to his local church for financial assistance.
His financial problems are not your problem unless you make them your problem.