Tenant Wants 70% Rent Reduction

baybeejuice on 05/04/2020 - 10:28
Last edited 06/04/2020 - 22:40

Our tenants (a early 50s bf, gf and the gf's son) moved into my 3 bedrooms townhouse in last Dec and signed a year's contract for $470 per week. Yesterday, i got a phone call from real estate saying the tenants broke up and the male tenant is the only one living there now. He's a painter and now has zero dollar income. A screenshot summary of his 3 bank accounts showed $0, $2 and -$10. He has applied for centrelink. Now he's asking for rent to be reduced from $470 to $150! Now we don't know how to go about this. Any advice?

Edit:
Thanks for everyone's advice and comments.
The lease had only the bf's name on it. He had income of $1000 per week when applying for this property. As part of rent reduction prior to moving in, he already painted the whole place. Also, our current home that we are living in was painted 2 years ago.

Edit #2:
Correction: Just had a look at tenant application, the male tenant that is on the lease was getting $2100 gross income per week.

Home & Garden

Comments

          • geoffs87 on 06/04/2020 - 13:11

            @knk: couldn't agree more!

          • shruglord on 07/04/2020 - 10:15
            +2

            @knk: Wasn't there a study last year that showed most Australians couldn't afford an unexpected bill?

            I think it's the norm that most people don't have 6 months saved up, rather than the exception. Sure, people should, but reality is that people don't.

            I couldn't survive 6 months without some help. Rent alone would send me broke. And I've had a stable job for a year, two degrees, and no debts apart from HECS.

            • knk on 07/04/2020 - 12:07

              @shruglord: Yeah I remember reading most people can't make it past week 2.

              6 months is probably an overshot, but you'd expect at least 3 from a sensible person.

              Not to be a dick, but could you really not save up 6 months worth over time if you cut all expenses? Share house if possible, live frugal etc.

              • shruglord on 08/04/2020 - 10:52
                +5

                @knk: I don't think you're being a dick by suggesting that. I'm actually a bit older than my position makes it seem. I'm 34 and I've been living in share houses or my parents for most of my life. It just took me a while to figure out what I was good at. I think many young people feel the same way. It's a crowded world compared to 50 years ago, and everyone is working hard, despite the advice we constantly get about working harder.

                I lived on my own once previously when I took a job in Japan a decade ago and I have to admit, living on your own, having your own place in the world, feeling like you are moving forward… it's worth every cent, so that's why I took a place on my own when I got a proper paying job rather than the debilitating experience of living in sharehouses or parents in my mid 30s to save for a deposit. Psychologically I was very depressed about my position despite being without debt. Despite always working in some form, I didn't make any meaningful traction on our societies definition of success. It really makes you question the value in societies definition and what you truly value.

                I truly value my identity and wellbeing. I have learned not to place any value on how many things I have or if I have a house.

                Should I have worked harder in my 20s? Maybe, but lots of people did, and they're boned right now too. We were flooded with ideas of status through material items. We were pushed hard to make debt normal. Gambling became the national pass time. We were never taught how to manage personal finance apart from figuring it out on our own, through my own mistakes. I could have worked harder, but I also think society let us down. The younger generation feels that way deeply… very deeply.

                If personal responsibility is the trademark of the older generation, societal responsibility is the trademark of the younger ones.

                I am okay for 3 months. That was my minimum and I'm working to get to six months. Plus my job is fairly secure through this (so far) and my support network is a huge safety net for a disaster like this. I feel so privileged and lucky though. I've hit the jackpot with timing to come out the other side of this pretty secure, but I recognise I did hit the jackpot. I left a $50kp/a job 18 months ago, and left a job in sports 10 months ago. I doubled my income in under a year. Had I not made those decisions, I'd be broke and with my parents right now.

                Lots of old friends who weren't so lucky in retail or hospo are worried about legitimately concerned about being homeless or affording groceries. Even a far more accomplished marketing friend withdrew from a new property purchase cause her hours were cut. Almost all feel completely overwhelmed about the future and few have decent support networks. I'm offering them my couch. I offer to buy them groceries. I'm able to do that. How could I look at friends who tell me they're crying at night and not help when I can?

                Anyway this post was a lot longer than I thought, but I hope it helps people appreciate reality is a little different from how we think it should be. I recognise landlords are not exempt from the same stressors either, but by in large their position is less tenuous. Their success comes from one of privilege and often enough hard work and saving. Some are standing on the precipice sure, but the cliff face for renters and disabled people and poor people and the elderly is a lot more crowded and jagged on the way down. They are being pushed off that cliff right now and they need help where they can get it.

                • knk on 08/04/2020 - 13:17
                  +1

                  @shruglord: @shruglord

                  I just felt like suggesting your lifestyle could potentially use a change could have been a bit out of line, we all have different opinions on what the norm is.

                  I think what you've done is traded financial security for experiences, there's nothing wrong with that but I think that if you were in a position where you couldn't pay rent that's on you not the landlord to suffer. That said, 3 months isn't a terrible stockpile and you're doing better than the majority.

                  "Their success comes from one of privilege and often enough hard work and saving. "
                  I'll stop you there though, I (and most likely other landlords) did not manage to purchase property due to privilege. It's sacrifice. I sacrificed the experiences you had living in Japan, that sounds (profanity) awesome. I think I went to the opposite end and should have probably enjoyed myself a little more, but it is what it is.

                  I do acknowledge there are some people like you said, such as those who are disabled who absolutely need government support in this. But that's what it should be and that is what public housing, rent assistance etc is for.

                  • shruglord on 24/04/2020 - 12:01

                    @knk: Sorry I never replied to your post. I just read it now and want to acknowledge you make a good point about how I sacrificed financial security for experiences. I was very very privileged to be able to do that because I knew I was able to fall back to the safety of my parents.

                    I'll just say, personally I didn't just go for experience however. I was always trying to leverage a career that would allow me the benefits of living and working overseas… and thankfully that's still a prospect for me in the future. That's not the case for everyone I agree, so I think you do make a good point.

                    I didn't mean to say it was exclusively from privilege so apologies for making it seem that way. I wanted to acknowledge that many financially secure people have succeeded in spite of lack of opportunity. I didn't intend to imply it was solely privilege. I do know the immense sacrifice in securing financial independence.

                    Sidenote, my only problem with landlords is purely a philosophical one in that the financial independence they enjoy comes at the expense of someone else. Someone else is funding their FI because landlords are in a financial position to do so. Through sacrifice OR privilege OR luck. On a macro level, it's probably not a big deal, but on a country level I think we've seen the kind of inequality that can create and that's a core belief I personally hold.

                    It's interesting. Thanks for sharing your perspective. It's nice to listen in times like this to appreciate the other side of things. Gives you some real perspective and helps us think of solutions that benefit everyone.

                    Hope you're doing well a few weeks after this post :)

                • geoffs87 on 08/04/2020 - 14:41
                  +1

                  @shruglord: Yeah, I kindof understand some of where you're coming from… but the whole "in my 30's and it was easier for people back then" argument gets a little old.

                  I'm 33, wife is 34, we have a 7month old bub and 2 properties (in inner Sydney). I was in no way privileged (grew up in regional Australia, and my parents (albeit they own their home outright and have a bit of cash now… mostly due to my advice) lived a very financially ignorant life… and my wife's parents place in NZ probably cost less than my kitchen renovation just cost us… I worked 2 jobs and a side hustle while at uni, and have completed 2 degrees… so privilege is sometimes the answer, but not always.

                  I echo knk -

                  I think what you've done is traded financial security for experiences

                  Why should landlords who sacrificed their 20's and 30's in order to work towards financial security, suffer so those who didn't to get a free or heavily discounted ride.

                  Now do not get me wrong, I understand the benefits of keeping everyone in a home, everyone in a job, I certainly understand the government benefits being dolled out - but lets make sure those who worked hard to be financially secure are not disadvantaged for their sacrifices!

          • markathome on 07/04/2020 - 20:22
            +2

            @knk: So do I knk. But I feel the jokes on us, the money we've saved up could be what stops us from getting JobSeeker.

            In my situation, foolishly having changed jobs recently, losing my job is probable and there's no evidence I'll be able to get JobKeeper either. :-/

            Edit: Apparently it's a bit easier for JobSeeker but I think savings were a problem in the past. Still won't be happy until I keep my job through this all or see the cheques.

            • knk on 07/04/2020 - 22:38
              +2

              @markathome: Yep pays to be financially inept these days hey.

  • Zachary on 05/04/2020 - 10:38
    +13

    A screenshot summary of his 3 bank accounts showed $0, $2 and -$10

    Aw man…..feels like my bank account at the moment….

    • hearitfromhorse on 06/04/2020 - 08:13
      +9

      I reckon I could transfer cash into a mates account for long enough to demonstrate I have $0 too

      • Zachary on 06/04/2020 - 13:32
        +1

        You must have very trustworthy and reliable mates then, I don't have any mates that I could trust and/or rely with my money, if I had any that I could let them hold onto….because I know one of them will most likely blow it all within a week at the casino instead of holding onto it for me…. And another will take 5 years to pay back if they do accidentally use my money for their purchases…

        • 900dollaridoos on 07/04/2020 - 06:59
          -1

          I've lent close friends money up to 1k on occasions. I always saw it as a very cheap way to find out who you can actually trust

          • Zachary on 17/04/2020 - 20:25
            -1

            @900dollaridoos: Yeah, 1k…sure, if you got that kind of money to waste for a social experiment for each one of your friends….

        • Charleston on 07/04/2020 - 09:57
          +6

          Mate that's pretty sad for you if I'm honest.

          You should probably have a look at who you're friends with.

          • Zachary on 17/04/2020 - 20:23
            -1

            @Charleston: Can you be my friend then? Maybe you can be a better friend than them?

            • Zachary on 25/04/2020 - 10:49

              @Zachary: No one wants to be a good friend to me… T_T

        • Bronnie on 07/04/2020 - 12:07
          +1

          Or into another of your own bank accounts with another bank

      • antigrate on 06/04/2020 - 15:57
        +3

        Or inspect element on a browser.

      • peterpaoliello on 06/04/2020 - 17:03
        +1

        Or.. mspaint.exe

      • jace88 on 17/04/2020 - 12:51

        Or just open up whatever account on OzBargain has a bonus promotion if you deposit $x every month…!

    • nikey2k27 on 07/04/2020 - 21:08

      It sound like BS to me apply for new dole in 1100 fornight time 2 2200 fornight you do maths

  • [Deactivated] on 05/04/2020 - 10:39
    +4

    First $150 is less than half price , can you afford that ?

    Work out if yiu can get other tenants easily , if you can then say no.

    If you cant then make a deal say $300 a week, plus paint the place over the next few months , u supply the paint

    Dont forget he will get rent assistance from centrelink

    He maybe calling you bluff

    Call him bluff and agree to a rent reduction but not that much , i think $300 is reasonable with painting to be done .
    All rooms u supply the paint for 6 months only then reverts back to 470 after 6 months AND only himself tolive there , no women with 5 kids etc , just himself

    Put it in writing , he is still gaining , with rent assistance plus his $550 week jobseeker payment and plus he may share

    • baybeejuice on 05/04/2020 - 10:45

      I don't think we will get anyone to move in easily. He already painted the place before he moved in as an agreement to reduce the rent.

      • geoffs87 on 05/04/2020 - 14:46
        +1

        Have you got friends/family who’s house could do with a freshen up? What about your PPOR?

        Additionally, the construction industry is regarded as “essential business” (not going to go into the argument about what should and shouldn’t be essential… haha), so even if he lost his job, can he not get another one? Can he not jump on airtasker, is he not getting $750 a week from the gov? Can he not take some initiative. Sounds to me like he’d prefer a free ride and is leveraging the good will of others to make it happen.

        • MatthewTeng on 05/04/2020 - 15:32
          +6

          I'm pretty sure Centrelink New Start allowance is usually about $570 per fortnight, not per week.

          There was a one time $750 payment earlier this month apparently.

          They're said to be giving more that might bring payments up, but that's apparently being planned at the end of April, not yet.

          If he has no income or savings I can't see him paying close to the $470 per week in rent.

          At $470 a week, I'm assuming it's not just a studio, so I'd think finding house mates would be the way to go.

          $470 / 3 = $157
          $470 / 4 = $117

          Everyone wins with just a little less comfort. There's no perfect solution, but sharing cuts payments a lot.

          https://www.servicesaustralia.gov.au/individuals/services/ce…

      • sarahlump on 05/04/2020 - 17:00
        +4

        You may have to communicate with the tenant and try to work out some payment, it may be that $150 per week is what you'll be getting for the time being and $150 is not $400+ but it's better than $0.

        It might be that you'll be facing some losses. It also seems like the tenant can't possibly do any better atm. I'd consider also offering to bring in a sharehouse arrangement if you can, if the tenant will agree to it. But the risk you both face is not coming to an agreement and both suffering. You should work with the tenant as they are clearly trying to work with you in this trying time.

  • funnysht on 05/04/2020 - 10:45
    -7

    Sounds like it may be bs….the gf prob never broke up and just lying to get a reduction in rent. This wasnt actually due to coronvirus..this was the gf breaking up..so how could the bf pay if the broke up (and coronaviru not present)

    dodgy tenants

    • wordplay on 05/04/2020 - 10:47
      +14

      He is a painter and people have stopped him coming into their house due to corona-virus, if it wasn't for that would probably be able to pay so the pandemic has had some impact.

      • funnysht on 05/04/2020 - 10:56
        +2

        true

        • diazepam on 05/04/2020 - 17:04
          +7

          You're an idiot for calling it "CCP virus".

          • whooah1979 on 05/04/2020 - 17:37
            -1

            @diazepam: Calling it a CCP virus is wrong. It is more appropriate to call it by its origin.
            https://www.aljazeera.com/programmes/newsfeed/2020/03/trump-…

          • malaymail on 06/04/2020 - 10:10
            +6

            @diazepam: Just call it the Chinese virus then. It's like we had the Spanish flu, I don't remember the Spaniards complaining about that in the last century.

            Disclaimer: I'm Chinese.

            • diazepam on 06/04/2020 - 13:36

              @malaymail: Funnily enough it’s disputed where that 1918 influenza pandemic arose from. I’ve done microbiology at uni once upon a time and all of us preferred not to call these pandemic and health crises by their (generally unrightfully gained) geographical names.

              You’re free to call it Chinese virus. I’m not going to stop you, but calling it CCP virus is like calling it the LNP virus in Australia because the government (and indeed the rest of the western world) didn’t act fast enough despite there being plenty of alarm bells sounding throughout the world at the time.

              • MrBear on 07/04/2020 - 11:52
                +1

                @diazepam: Nah it's called TRUMP-16 and it wasn't a Democrat hoax.

            • MementoMori on 07/04/2020 - 13:32

              @malaymail: German measles = OK

              Chinese virus = Racist!!

            • mranderson978 on 07/04/2020 - 14:17
              +1

              @malaymail: SARS v2.0

            • LFO on 07/04/2020 - 18:35
              +1

              @malaymail:

              I don't remember the Spaniards complaining about that in the last century.

              Spain was the first with reported case, its King had it.

              The Germans and the Allies were under War Censorship (World War I) so not a word was said nor printed.

              Spain wasn't.

              History is amazing but very repetitive.

            • Crazy John Howard on 08/04/2020 - 09:11

              @malaymail: Are you sure the Spaniards were not complaining? Fair fair..If we decide to call this a Chinese virus, let call the H1N1 pandemic that killed more 200000 people the "American Virus".

              • MrBear on 08/04/2020 - 20:54

                @Crazy John Howard: Well, the Spanish Flu came from Kansas, so it should actually be the American flu or Rebel flu.

            • ssquid on 08/04/2020 - 21:09

              @malaymail: Typical Chinese trying to own everything…

    • shutuptakemymoney101 on 05/04/2020 - 21:30
      +6

      OP, if you agree to the rent reduction make it a stipulation that no one else moves into your rental property whilst he is living there with reduced rent. That will put a huge dent in his plans for the miraculous reconciliation with the girlfriend and having them move back in.

  • wordplay on 05/04/2020 - 10:45
    +10

    Give the bloke a break,maybe go to $200 and see what he says, its a global pandemic after all and you are not allowed to evict him
    ask him to re-paint the house for cheap labour (ie $20 per hour) and get him to paint some of your others if you have a few properties while he is out of work.
    This will all blow over in 12 months anyway.

    I take it you are able to get a freeze on your mortgage? may need to talk to the bank and sort that out if you can.

    • whooah1979 on 05/04/2020 - 10:47
      +11

      This will all blow over in 12 months anyway.

      Not a chance.

      • wordplay on 05/04/2020 - 10:48
        +4

        How long will it take??? I only have 12months supply of money.

        • whooah1979 on 05/04/2020 - 11:00
          +10

          Pandemics of this size takes about two years or more. Corrections across multiple markets may prolong the timeframe.

        • EightImmortals on 05/04/2020 - 11:05
          +15

          The plandemic will be over soon, the economic fallout will go on for quite a while longer. Just pray that the state 'allows' people to to get back to work soon so that money can start flowing again.

          • nomoneynoproblems on 05/04/2020 - 18:37
            +7

            @EightImmortals: As long as there's no vaccine, it's going to be a while…

            • knk on 05/04/2020 - 20:26
              +3

              @nomoneynoproblems: ^This. I really don't see the light at the end of the tunnel right now….maybe I'm pessimistic but we're going to be in this for the long haul.

              • nomoneynoproblems on 05/04/2020 - 23:11
                +2

                @knk: No I agree. If there's no vaccine why would we be allowed out? It's just going to cause the same issues all over again, probably even worst. The notion of it being over soon is frankly ridiculous, even more so as we head into winter.

            • iDroid on 06/04/2020 - 17:08
              +1

              @nomoneynoproblems: Or a reliably effective treatment.

    • funnysht on 05/04/2020 - 10:49
      +1

      if going with this make sure you rewrite the contract stating only HE is able to live in the place/some wording so that it's not just a ploy by them to avoid paying rent. If they have truly broken up then there should not be a problem right.

      • dizzle on 05/04/2020 - 14:53

        I'd be careful with that, it gives him an excuse to not get anyone in and keep paying less.

        It would be better to write in a temporary reduction with the provision that the landlord can increase the rent back to the original amount whenever they deem it the right time. Ie, if they get other people in, they can't expect to get the reduction, if the eviction ban finishes they have a reason to get a job/find someone to move in/move out.

  • Amaris on 05/04/2020 - 10:46
    +47

    Send him screenshots of your last three mortgage repayments and ask that he pay for his accommodation from the JobSeeker payment. Consider a reasonable reduction if you're able to afford it. Offer to break the agreement for free, again if you can afford it.

    • ALFAru on 08/04/2020 - 00:54
      +2

      What about Mortgage Repayment Holidays? They not working?

  • funnysht on 05/04/2020 - 10:53
    +35

    Perhaps just ask him he can move out break the contract without any cost. He should be able to move to a 1bdr place for around $200 then in that case.

    • funnysht on 05/04/2020 - 11:01
      +9

      The clink benefit would be $550/week…so why does he only want to pay $150 a week? This is the exact problem this new policy will bring, tenants trying to negotiate their own rents rather than be given a rent allowance that goes directly to the landlord.

      • lunchbox99 on 05/04/2020 - 11:09
        +30

        I dunno, maybe he needs to eat and pay bills like power and water

        • funnysht on 05/04/2020 - 11:09
          +6

          Yes because that will cost $400 a week for one person right?

          • lunchbox99 on 05/04/2020 - 11:21
            +17

            @funnysht: Don't know - maybe they have car payments, maybe they have medical issues, maybe they have child support. Impossible to know with the information provided.

          • Mechz on 05/04/2020 - 11:28
            +2

            @funnysht: No but it's a lot more than $70 or 80 a week.

        • qwerty on 05/04/2020 - 11:39
          -1

          Water connection fee , council rates , service people / repairs , pest control

          OP should just cancel the water and let the house be infested with rats because he has to pay his own bills

        • brendanm on 05/04/2020 - 12:52
          +4

          Maybe op does as well?

      • whooah1979 on 05/04/2020 - 11:14
        +1

        The stimulus packages are meant to keep the economy from retracting.

        • Cheeper on 05/04/2020 - 11:58

          A lot of it was / will be given to people who have zero impact from cv19 on their govt guaranteed income. People are housebound so how can they go out and spend up?

      • Yotta00 on 05/04/2020 - 14:58
        -3

        I would rather not give my taxes for the welfare of some upper middle class yuppies. Because in due time, house prices will return to normal and you made profit out my taxes. My taxes already gave business interest free loans.

      • sarahlump on 05/04/2020 - 17:01
        +5

        I dont know if you've ever found a 1br house for $200 a week. I feel like you are detached from reality.

        • knk on 05/04/2020 - 20:28
          +1

          hmm frankly if someone has no income and no job they can move to wherever the hell is cheapest for them. Not the landlords problem and certainly not feasible for 1 person to be renting a property worth $470 per week.

          • Franc-T on 06/04/2020 - 01:46
            +3

            @knk: Its everyone problem - including the landlord.

      • NatoTomato on 06/04/2020 - 14:22

        It's 550 a fortnight I'm pretty sure.

        Edit: ah sorry, it's $550 bonus a fortnight, so pretty much now 550 a week.

  • popsiee on 05/04/2020 - 10:55
    +1

    You could figure out if some friends or family need some painting to barter with him . Besides that with those bank accounts and I suppose some kind of government allowance that offer is better than O that he could go for . Remember no evictions for 6 months .

  • Gratt on 05/04/2020 - 11:05
    +7

    Ask him for a Centrelink income statement. What is he doing with the $550 coronavirus fortnightly supplement? Maybe car payments etc. Did he show you his business accounts Some people are looking for people to paint outsides of houses as a way of spending government bonuses. They can't spend the money in Pubs and Clubs or cafes. Centrelink may also pay himm a crisis payment depending on the reasons his partner left. Welfare agencies and government housing bodies commonly reduce rent to 20% or25% of income from an income statement. The time to renegotiate rent is after he is granted a payment. Give him a deferral of part of his rent for now.

    • [Deactivated] on 05/04/2020 - 11:08
      +2

      , $1100 fortnight plus rent assistance $1380

    • sarahlump on 05/04/2020 - 17:03
      +1

      He isn't currently getting a centrelink payment. so any negotiating should be to the benefit of the tenant who is currently suffering, and then an part that says once there are an increase in income an increase in rent.

  • jimbobaus on 05/04/2020 - 11:05
    +99

    As a landlord myself my suggestion would be:

    Waive one months rent (April) and allow him time to get on his feet and get set up with Centrelink.
    Once centrelink kicks in, get the agent to arrange with him for him to pay fortnightly into their bank, this way he will always be ahead.
    he will be eligible for rent assistance with Centrelink, with the coronavirus subsidy he will be taking home around $1380 a fortnight
    i would then suggest a modest reduction in rent, maybe $400 a week fixed, this means he can transfer $800 a f/n to the agent (fixed means , weekly not monthly amount so he pays a fixed amount)

    Also have him sign something accepting that when the crisis is over rent will return to usual amount regardless of his employment status.

    On a side note, with centrelink he can also set up "CentrePay" this would mean centrelink would automatically transfer his rent amount to the agent instead of paying it to him.

    Another option would be to allow him to Sublet the spare rooms, but with social distancing rules this may be difficult to sort out.

    • TheBilly on 05/04/2020 - 12:19
      +13

      This is the best advice here. All the others saying use him to paint this and that are just idiots.

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