Has Anyone Actually Had a Reduction in Rent?

Lcaff3ry on 31/03/2020 - 02:22
Last edited 02/04/2020 - 02:54

So my girlfriend and I are semi arguing about our rent right now. She's saying that our landlord should give us a reduction in rent by 50% due to the current economic climate caused by the COVID 19 outbreak. While I do agree with her that they should probably offer some sort of reduction I don't feel so strongly about it that we should threaten to leave if they don't give it to us.

We signed our 1.5 year lease in December last year on boxing day. I'm working casually in retail and she was also just working a cash job that is no longer available due to the business shutting down. She says that all her friends have gotten a reduction in rent or even rent free due to the outbreak however i'm very reluctant to believe that this is actually true as I've asked my friends and colleagues and even my parents and none of them are getting a reduction in rent. At this stage i'm lucky enough that i'm still working given that I work in Westfield and we are able to still remain open, I know there are other out there worse off than I am being stood down especially in the retail space where casuals are usually the first to be let go. At this stage I still make enough on the reduced hours to pay for the rent which is $500/week. However she is out of work and feels pressure presumably because she still needs to send money back overseas to her parents etc.

My argument to her is that legally speaking we have no leg to stand on despite the pandemic right now. We signed the lease, we cannot break it and if we do there are still terms and conditions that must be followed. She is of the belief that if we wanted to break our contract now there would be no consequences but I do not believe that at all. Yes the government has announced that we cannot be evicted during this time, however you must still follow the conditions set out by your lease am I correct? she keeps arguing that since everyone she knows has received a reduction in rent (wether this is true I can't confirm and I don't believe so anyway) our landlord should also reduce our rent. But as we all know there isn't a legal obligation that states my landlord must reduce the rent this is a case by case basis and while I have asked my real estate agent they said the landlord were not willing to reduce the rent especially having just lost the tenant next door and having lost his job apparently due to COVID 19.

All in all i'm frustrated in trying to explain to her that there is nothing legally wrong with him not reducing our rent. Morally speaking yes maybe he should offer to help us a little bit but it's not his legal obligation.

UPDATE: 1/4/2020

Really appreciate the responses from everyone. It's good to see how everyone's situation differs in these uncertain times. As of today unfortunately our business has also decided to close until further notice with the further restrictions implemented by the government where by people can only be out for necessities it makes no sense to continue operating a retail store till things get back to normal. Today the news while shocking definitely was something everyone in the business knew was coming we just didn't know when. The feeling of uncertainty as we day each day one at a time really is quite scary not knowing when i'll be able to head back into work. I've applied through mygov already for assistance although honestly i'm not sure what benefits will be available to me if any at all as our business has only been operating since 16 December 2019 which probably means I've no chance to get job keeper. First thing I did when I went home was go on seek and start seeing what jobs were available and right now things look very bleak. I have updated my realestate agency with what has happened and they will do their best to help with negotiating with the landlord however if things don't get better I'm probably looking at moving back in with the folks until this whole thing blows over.

Looking back at the time that I have now makes me realise that I want to be better equipped for when we come out on the other side. I went to uni previously but never enjoyed what I studied and so far to this day I still haven't found what I want to study. Hopefully I can teach myself through some online courses basic coding languages and have a more useable skillset when this is over.

All in all I'm thankful for all the responses from you guys in seeing what situation and different perspectives you guys had. I never agreed with my GF on this issue however if the landlord is willing to help then I'll be grateful for whatever he's willing to give as I've said before I know legally he has every right not to help. I don't intent to stay here for free that's just not right but I have told them that with my $2.5k savings left realistically I may have to move out after next month if we can't come to some sort of arrangement. Assuming I become eligible for any of the government help I'm happy to continue living here and as soon as I can find stable work again I'll be happy to pay the normal rate again.

Thanks for all the responses guys and gals.

Poll Options

  • 22
    Yes I got a reduction in rent.
  • 478
    No my rent is the same.
  • 9
    i got free rent.
Home & Garden

Comments

  • sy8718 on 01/04/2020 - 16:49

    If I am a landlord with millions of cash in bank, I do not mind giving you 3 months free. If I am a landlord with millions of mortgage and just lost my job, even 1 cent is very important to me. If you are really in trouble that you cannot afford the rent, you may negotiate with your landlord. But sounds like just because some of your friends got reduction, then you think your landlord "SHOULD" do that as well. WHY? The virus will not affect landlord?

  • roy125 on 01/04/2020 - 18:48
    +4

    Mine lost their jobs for 12 weeks so I asked them what they can afford given the benefits available. They came back with what was essentially 60% of what they are contracted to pay. We agreed to let them pay that till circumstances change.

    Ultimately it is going to be at a cost to us, but would likely also be difficult finding a new tenant and getting the rent that you were previously getting. If that put us in a position that would force us to have to freeze our mortgage on the property then we might have looked at other options. Crazy that the government has kind of taken those other options away now though without providing any assistance to owners.

  • Aneurism on 01/04/2020 - 20:25
    +2

    This is typical entitlement.

  • T1OOO on 01/04/2020 - 20:54
    +2

    I really hate this attitude ur gf has. She’s a catch mate.

  • drprox on 01/04/2020 - 20:55

    My 10c is that the government is essentially redefining what "hardship" means. In my opinion people should pay their rent provided it doesn't impact other more important things being family and health really. Hypothetically, if a tenant had savings of thousands of dollars despite not having a job..should they not pay their rent? Of course not suggesting this would apply to all tenants!

  • gstfree on 02/04/2020 - 00:57

    Could landlord claim lost in rent from insurance company?

  • massafiri on 02/04/2020 - 01:54
    +1

    Free - No.
    You're technically using the service (shelter) during this time, so you do get some value, and the landlord has bills to pay (regardless of the mortgage holiday)

    Rent Reduction - Yes.
    Rent and wages are closely linked. If rents cannot be paid, new supply will hit the market, demand will take a hit until rents adjust.

    As some people have said in this thread, no one cries when a shareholder gets a cut in their dividends. Same thing is happening with houses. You own it, you take this risk.

    • Trojan on 02/04/2020 - 09:27
      +1

      If its as simple as you take the risk, and no one cries when you suffer, then why is the government helping small business owners who took the risk and suffering losses now?

      • massafiri on 02/04/2020 - 10:11
        +2

        Simple. Small business employs about 50% of the Australia workforce (2018)
        When a small business fails, their employees go from getting fed by the small business -> Getting fed by Centrelink.
        Either way it's tax payers money - which would you prefer?

        I run a small business and I can tell you the grants that are being offered provide very little relief, the business will be losing a lot of revenue even with all the tax breaks and JobKeeper subsidy - and that's the risk I have accepted to take.

        What I'm saying is Landlords should accept that they will lose money too. Their investment has immediately become less valuable on the Market (just like all the other investments).
        But from what it sounds like, landlord's are always expecting their yield (sounds entitled to me).

        • diceman99 on 02/04/2020 - 21:35

          Yes but an employer can get rid of your employees (expense obligation) when you want.
          A Landlord cannot get rid of the bank loan (expense obligation) when they want. (Well they could but that would result in a very expensive loss 100K+ and sale of the property.)

        • Trojan on 02/04/2020 - 22:26

          I hear what you are saying but it sounds like your position has moved from "a person takes risks and should accept the losses from those risks" to "it is more cost effective for the government to support small business than landlord".

          If that is your new position, I agree with it but I still disagree with your original position because its not called risk assessment when a once in a lifetime pandemic causes the government to make regulations which has never been made before - both for the business owner and the landlord.

          • massafiri on 16/04/2020 - 09:23

            @Trojan: The government isn't really helping the business out at all. They're designing these packages to keep employees on the books and fed.
            We are still expected to lose $1,000's of dollars in revenue that would have eventually made its way to our pockets. That's yield on my investment that I have lost and the government will never pay me for that.

            So no, the government isn't helping line the pockets of small business owners.

            Home owners are in the same asset owning class of the nation. If the tenant can't afford rent from their (lower) income then market forces come into play (this is compounded by the inability to issue evictions).

    • tomfool on 02/04/2020 - 13:17
      +2

      No One cries when the shareholder takes a cut sure, the property market to is taking a cut property owners will take a huge capital lose from this.

      However paying no rent is akin to walking into a supermarket grabbing a trolley worth of goods and walking straight out and then expecting Woolies to pay for your fuel home.

      The impact to the economy is significant and largely will be felt long after covid19 is under control.

      • massafiri on 02/04/2020 - 13:51
        +1

        Yes I know that - as I said: "rent free" is absolutely bullshit and not what I'm advocating.

        I'm advocating that we live in a free market with market forces.
        Wages and rents are closely related, if wages take a hit, then rent also takes a hit. It's not my opinion, this is just basic economics.

        The reason why rents have not risen at the same rate housing prices have risen in the last 10 years is because rents are based on REAL market forces and house prices can be inflated by speculation and low interest rates (not yield's like other assets, eg: Shares)

  • Trojan on 02/04/2020 - 09:29

    OP, if you are going to move out after you run out of savings, where will you move to? Do you have any other potential living arrangements (live with parents, etc)?

  • YoungQuan on 02/04/2020 - 10:17
    -4

    this is a f..ing joke right? you have signed a fixed term agreement, a contract, and are legally obliged to pay rent as per agreement. Finding a new tenant will not be an issue due to extremely low vacancy rates across the country. Do the right thing as per you legal obligation, or you will risk accumulating thousands of dollars of rental debt or copping a hefty break lease fee. See how you go then.

  • spc12go on 03/04/2020 - 11:41

    Hey OP, it doesn’t hurt to ask for rental reduction. The worst they could say is no. And if they advise you to dip into super report them to ASIC. For unlicensed financial advise.

    You should seek government help, with the payment of $550 P.P per week commencing April 27th. This last for about 6 months, and it’s eligible for you and your partner, hopefully you should be able to get by with not much issue. Provided you can meet the criteria.

    I own an investment property as well, and I have asked my tenant to reach out to both the agent and myself. If they need help as I am sure things can be worked out with a good outcome for everyone. There is absolutely no need to be nasty to one another, you never know you could be the one seeking help one day.

  • Phreakuency on 03/04/2020 - 14:34
    +2

    Too many people live day to day on every last dollar.

    I get this is necessary for certain people depending on work and study and other factors but most intelligent adults should have savings to cover a minimum 6 months rent for worst case scenarios.

  • motion2082 on 03/04/2020 - 17:28

    I got $20 per week reduction off a 3 week extension. Not really great considering my partner will lose her job next week

  • rgr on 03/04/2020 - 21:49

    mate, you're getting cucked big time. but that's ok you're a simp and willing to be trodden on.

  • surm on 04/04/2020 - 02:30
    +1

    Supermarkets don't sell discounted goods to those who have lost income due to COVID-19, regardless of the past profits made by the supermarkets from the same customers.
    Neither do Petrol stations nor do the banks.
    So why are landlords expected to give discounts and incur losses?

    Suppose a landlord loses the job to COVID-19 but their tenant is unaffected. Is the tenant then supposed to pay a higher rent to "share the burden"? If not, why is only the landlord expected to chip in?

    • TSH on 14/04/2020 - 16:41
      -3

      Petrol stations and banks are businesses contributing to the economy.

      Landlords are leeches lining their pockets.

      Poor "hardworking" landlords must have gone and hit their heads thinking they are a legit business contributing to the economy.

      Save the outrage for after 6 months when shit hits the fan. LLs have no spine crying at the early stages of the game.

      Suck it up and smile.

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