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

      • sheebies on 07/04/2020 - 05:56
        +2

        I survived on Centrelink paying $390 a week in rent and that was obviously well before the extra $550 per fortnight was introduced. It's not easy but its completely manageable.

        Not to mention companies such as Telstra have implemented policies regarding no late fees and they're not suspending services at this point. So there is leniency when it comes to paying bills too.

        I agree with leniency until Centrelink comes through, but after that I see no reason why he would need a 70% discount on his rent.

        • downbythecreek on 07/04/2020 - 14:41

          Well, good luck to any lessor who wants to play hardball with tenants under financial hardship. They'd want to be able to fund all costs themselves for the next 6 months and be ready for the fight to get it back at the end of the day, with no guarantee they'd ever be made whole. You can thank the federal government for that.

          It's really in the lessors best interests to work with their current tenants as much as possible. I'm not suggesting this particular property owner accepts $150 a week long term, Id personally be trying to convince him to leave by voiding his lease so I could find another tenant. But I'd take what I could get in the meantime, just so long as he isn't paying zero.

  • duluxe2000 on 05/04/2020 - 19:23
    +4

    150$ is enough to find a room in a shared house. He does not need the whole 3 bedrooms for himself though. If he does not want to move,he can sub-lease other rooms.

  • Repi on 05/04/2020 - 19:42
    +9

    Sounds like a rehash of "Tennant stopped paying rent". We are landlords, we are not over the moon, but that's how investing is, sometimes you win, sometimes you loose.

    We enjoyed the tax deductions for years without complaining, so we take the bad with the good and wont complain now. The worst that can happen is selling the property, beats being on a ventilator or 6 feet under by a long way.

    • ThithLord on 06/04/2020 - 09:19

      Thank you for being a decent human amongst all these Landlords, Repi.

  • [Deactivated] on 05/04/2020 - 19:53
    +6

    70% reduction request is unreasonable. As posters above have mentioned, jobkeeper and rental assistance alone give him higher capacity to pay than that.

    Some tenants think this eviction moratorium means they can rent for free or practically free as yours is trying to do. It really doesn’t, there are other consequences beyond evictions, and your REA should’ve managed the tenant’s expectations before bringing this unreasonable offer to you.

  • capslock on 05/04/2020 - 20:35
    +2

    Why would the tenant leave if all you will offer him, as others have suggested, is no penalty on breaking the lease? If he can't afford to pay the penalty anyway then the penalty means nothing to him.

    The tenant doesn't really need to provide bank statements or free painting or negotiate a new rent amount or rent out the other rooms or even pay $150 per week. He knows he can't be evicted even if he pays $0 per week.

    I'm thinking you might have to get creative and give him an incentive to leave voluntarily, cut your losses and find another tenant.

    • MatthewTeng on 06/04/2020 - 02:17

      The penalty is usually the bond you pay when you move in. Let's say he paid a 3 week bond when he moved in, that's $473 * 3 = $1,410. If he was to break the bond the penalty would be that he loses that money. If he gets to leave without penalty, the landlord pays him the $1,410 back.

      • capslock on 06/04/2020 - 06:20
        +2

        To a desperate person, I think that losing the bond and getting a house rent free for 6+ months sounds better than getting the bond back and having to pay $150 per week for a room at a share house.

  • funnysht on 05/04/2020 - 20:47
    +2

    Doubtful. The fact that he wants to still live in a 3bdr place rather than move to a 1bdr even though he is supposed to be the 'only person ' living there.

    Maybe tell him, you found 2 other tenants that will co-lease, and if it goes ahead he will happily reduce the rent to $150 a week, see how he then reacts to this.

  • fredk1000 on 05/04/2020 - 21:18

    What's the chance of getting a new tenant if you lose him in this pandemic? Something would be better than nothing.
    Maybe give him a break if you can afford it. Hopefully it is just a short term thing.

  • Phreakuency on 05/04/2020 - 21:18
    -1

    Sorry but how can a grown adult have no savings?

    This is disgraceful and his own fault.

    Most people should have a minimum 6 months worth of rent paid in savings.

    Absolute minimum 6 months.

    If you are living week to week, you need to go seek help and learn how to not spend every cent you have.

    OP, times are tough but the tenant would be able to pay almost all of the rent with Centrelink and rent assistance. Especially now since they've upped the payments.

    The tenant should also be applying for the $10K in Super since he has an obligation to his landlord and clearly has no other plans.

    • 91rs on 05/04/2020 - 21:43
      +5

      Pretty easily really, even if you're prepared.
      We don't teach this in school, there is nothing about financial literacy provided before people are out of home (to try and instil this stuff) and then the govt is happy to load people up with loans for higher education.

      Divorces are expensive, I've watched people with so much lose everything very quickly and now are those living pay to pay.
      I've blown well over 150k savings and then decent chunk of loans for medical issues for a parent while paying their additional bills so they didn't end up homeless (like most of OzLandlord would like to see happen to anyone who cant pay it seems). This was never the plan and is why I will probably be renting for the rest of my life, once you get behind then the catch up when things like property accelerate out of control are no longer obtainable.
      Plenty of things that can go wrong leaving people with nothing.
      Some people also make shit decisions and live well out of their means, those are the ones who would have been issues for LL's well before this was an issue.

      Some assumptions about people getting CLink are interesting, plenty aren't eligible for it so those people are out of luck.
      Taking out of super for rent is a terrible idea, its already taken a huge hit and these people will be left with even less when its going to be needed.
      Comments about Allowing banks to lend money so people can pay the full rent amount are just as bad, those same people will struggle to pay back the loan(s) (if they're still unemployed or otherwise low earning) is just going to cause bigger issues later but im sure they banks will get paid one way or another.

    • Ghost47 on 06/04/2020 - 10:03
      +1

      Sorry but how can a grown adult have no savings?

      Not everyone knows how to manage money, that's the plain truth and is easy to comprehend if you have any life experience outside of some rich elitist bubble (i.e. have met people who are complete losers, duds, moochers etc). If everyone could manage their money responsibly you would never see threads like this, or hear about how people live paycheck to paycheck (although that also relates to people not striving to continually improve their lives), or see as many people as you do queuing up for Centrelink.

      Asking this question shows to me that some people have way too much faith in others. It's also like asking "how can any grown adult not know how to take basic care of their car?" or "how can any grown adult not know how to cook a roast chicken?" or "how can any adult not understand how to conduct a basic SWOT analysis?" or "how can any adult not understand basic year 8 algebra?". How can one assume that all adults act responsibly about their lives? The fact is that not everyone is the same, nor does everyone have the same level of knowledge, nor does everyone care about being the best version of themselves that they can be.

      Assuming everyone in this country has enough integrity to save up money and dip into their savings when they lose their job instead of running to Centrelink at the first second is also ignorant is also wishful thinking.

      • jellykingdom on 07/04/2020 - 13:09
        +1

        Completely agree with this one. It's like whenever there's a Facebook news article about early retirement - people who clearly don't understand money say "how can you retire with only $X in the bank, you idiot!!!!".

        Um He may only have $X in the bank, but the idea isn't to retire with $0 INCOME

  • 91rs on 05/04/2020 - 21:46
    +3

    I can see the suicide rate heading north if this goes on for the 6-24 months projected and with many of the LL responses posted on OZB or should I say OZLL in the last week or so.
    This is really showing the worst in a lot of people, it was probably always there it's now just showing a whole lot more.

    • ThithLord on 06/04/2020 - 09:21
      +2

      It's horrible, isn't it? It's become quite demeaning to visit these sorts of threads.

    • shruglord on 07/04/2020 - 10:39
      +2

      Tell me about it! There is an overwhelming number of posts saying they don't buy the tenants story, that they're pathetic for having no savings and that landlords are not a charity. Well, if you think it's bad now, we're only 3 weeks into this lockdown. There's still a few months to go.

      Tenant has no money and the majority of people in here want to find ways to keep squeezing whatever he has left. Not saying landlords are charities but it really is exposing the worst of landlords.

  • Zonty on 05/04/2020 - 22:12
    -1

    I have doubt that tenant is trying to rip you off but as we know we can not kick him out for 6 months so ask him politely is it not good idea to leave contract when you live alone? and if he is single can afford easily 1 bedroom apartment. If he still living then go for check yourself from out side is there anyone else living or not.Also try go inspection monthly bases and see there anything give hint they still lives together and trying rip you off. Draw new contract and he will be paying$150 weekly because of he lives alone. If there is breach Of contract then contract will be voidable and tenant will be liable to pay full rent.if there is anything is doubtful ask him to vacant because you breach of contract with new rent and can kick him out.

    If You are genuine tenant normaly You downsize property because what you will do extra size propery with? When no one else living there I believe that is sneaky tenant so keep eyes on him when you allow the rent and go yourself inspection every month. Good luck

  • sauce2k on 05/04/2020 - 22:14
    +6

    The people on ozbargain that are bashing landlords or having a laugh seeing people who worked hard to buy a place and now suffering or concerning tenants won't be able to pay rent is just absolutely disgraceful.

    OP I feel for you. Maybe try negotiate a deal, 70% reduction is absolutely ridiculous.

    Does he have super? he can access 10k this FY then another 10k next prior to September.

    ALL the best

    • canyoudoitcheaper on 06/04/2020 - 02:25
      +5

      This thread is mostly just the landlords on this forum ( of which there seem to be many) bashing the tenant.

      All landlords have an option to purchase rental cover insurance. The ones that didn’t weight their investment risk properly can cry me a river. I’ll be waiting 6 months down the line to pick up a bargain at the foreclosure sale.

      • Snoochem55 on 06/04/2020 - 07:24
        +7

        I've had landlord insurance for a few years now but requires you to evict the tenant before they pay out on the lost income. Hope you see the problem here.

      • sauce2k on 06/04/2020 - 09:17
        +8

        Landlord insurance doesn't cover you for that long compare to the eviction ban. 15 weeks vs 6 months or something.

        A lot of the insurance providers also don't pay for loss of rent due to widespread virus.

        Where did you get the idea people here are bashing tenants? Keep waiting then, you have waited for the past 8 years already what's another 6 months.

  • Trying2SaveABuck on 05/04/2020 - 22:41

    I just want to put this out there is also a very real possibility he is talking sh!t he knows you can't process an eviction so from a negotiation point of view you have little choice but to accept a deal that is less lucrative then the one originally agreed.

    I'm not sure how you move in with someone and sign a lease and then all of a sudden break up!? Aren't both there names in the lease what does she have to say about it? This could be a simply lie that saves him 300 a week! Anyone can set up a few empty bank accounts he probably transferred it to the misses to hide it

    Ive been a LL for almost 10 years listen to my original comment offer him the option to break the lease (You keep the bond so you don't lose $) and He can GTFO or tell him he is expected to pay.

    Don't underestimate how shifty some individuals can be esp tenants. Anyone who is renting at 50 is likely to have shafted a few land lords in the past

    • wordplay on 08/04/2020 - 19:25
      -1

      Yeah, renting at 50, probably on the gear too. I'd be worried hes gonna turn ya joint into a meth lab.

  • Eeples on 05/04/2020 - 22:44
    +1

    Agree to the $150 and get him to agree for you to rent out the other two rooms.

  • Skyceratop on 05/04/2020 - 23:03
    +8

    Shouldn't the landlords be also saving for a rainy day?

    Where are the LL with the savings to help a struggling tenant not be homeless during a once in 100 year pandemic event? Where is the humility and empathy? The big four banks are offering help, call them up regarding your mortgage if you have no savings.

    Don't kick someone out on the street during a pandemic for Christs sake, this isn't the time to worry about losing money or being hit by interest. Nobody planned for this.

    Having a safe place to live during a pandemic is a god damn human right, don't be an awful person.

    • funnysht on 05/04/2020 - 23:06
      +9

      Why is it the landlord's responsbility to help a tenant out? Do you go to your local failing business and give them your money for free?

      • Skyceratop on 05/04/2020 - 23:10
        +3

        Actually I'm sending some of my money to a friend in New York to help the by groceries because I'm not an awful human being.

        Stop counting your pennies. Do something good for the human race instead of relying on somebodies labor to pay for your investments during a pandemic.

        I've taken a hit on my rental, my mortgage repayments will stop for 6 months with Commonwealth Bank and I'll take a 6k hit of interest because of it.

        But you know what?

        It feels good to help out others, I won't miss the 6k, a human life is worth more.

        • Trying2SaveABuck on 05/04/2020 - 23:12
          +1

          You know what Skyceratop if you are being legit and not walking BS then i tip my hat off to you.

          You sound like a good human so i wont have ago at you but not everyone can afford to do what you are doing esp those with families

          • Skyceratop on 05/04/2020 - 23:13
            +2

            @Trying2SaveABuck: Look, the fact is my payments barely change. Yes I'll have an extra 6k interest, big deal. It's not going to end my life right?

            By doing this, one can save a life though.

            • funnysht on 05/04/2020 - 23:16
              +8

              @Skyceratop: The point is that this tenant is not going to die….he will be getting $750/week from clink but only willing to pay $150/week…that's their humility and empathy right.

              If you want to save a life..how about donating the money to world vision.

              • Skyceratop on 05/04/2020 - 23:20
                +3

                @funnysht: I donate to world vision actually, our work asks us if we'd like to sacrifice a portion of our income. I said yes.

                Secondly the new payments don't start until the 27th, and it's an average of 550-650pw paid fortnightly. That's with rent assistance and one child like my tenants.

                This is what I did:
                Sat down over a Gin and Tonic and got to know them, looked at their situation together, looked over centrelink, looked over my options with them, and came to an agreement.

                This is called "Working together" you'll find it beneficial, especially during a world crisis like a pandemic.

                Also you don't know who's going to die… you don't. 38 percent of people in ICU beds are between 30-45.

        • funnysht on 05/04/2020 - 23:13
          +7

          Yes sending money to a friend for groceries is the same as losing $300-400 a week to a random tenant/stranger.

          • Skyceratop on 05/04/2020 - 23:16
            +2

            @funnysht: This is New York. With the AU conversation rate, it's still a good chunk of money.

            It feels good to go out of your way to help people and expect nothing in return. Try it.

            I will happily help you arrange with your bank a deferral or freeze on most payments for your property, DM me. It's not that big of hit, you will barely feel it.

            • funnysht on 05/04/2020 - 23:24

              @Skyceratop: You know what it feels better to have that extra $300-400 a week in my own pocket thankyou, and help your own family.

              Then use the rest to donate to animal charities, and 3rd world countries (which i do currently thankyou), not to tenant who supposedly cant pay his rent on $750/week.

              • Skyceratop on 05/04/2020 - 23:29
                +3

                @funnysht: Don't be out of touch with the facts. It's not $750 a week, and it doesn't start until the 27th.

                Do what I did and actually sit down with them, like a friendly fellow human being, go over the actual options with them so you know what he really gets and not some imaginary amount.

                My tenants are a couple, both lost work, have one child and few savings.

                Centrelink will give them 1340 a fortnight, starting on the 27th. Until then they get 700 a fortnight.

                Know the facts. Call your bank, as I did, and know your options. The Commonwealth Bank was more than happy to do it all over the phone with me.

                • funnysht on 05/04/2020 - 23:38
                  +1

                  @Skyceratop: Well each to their own. Some people are more charitable than others, there's nothing wrong with that.

                  Making people feel bad for not being charitable well that's another thing.

                  • Skyceratop on 05/04/2020 - 23:46
                    +4

                    @funnysht: In light of the current world crisis, having a mindset like that is very sociopathic. Like textbook, you are unconcerned about the adverse consequences for others due to your own actions.

                    Landlords have plenty of options during this pandemic, go explore them, you own an investment property, know your pathways. If you feel lost I am more than happy to take time out my day to help you explore them.

                    You now have the information at your disposal to make good healthy choices that benefit everyone. Never mind your hip pocket, that will recover.

        • 91rs on 06/04/2020 - 16:59
          +1

          "I won't miss the 6k, a human life is worth more."

          And that is exactly the point. Maybe people need to read that line alone a few more times.

          The fact that such a minimal amount of money that someone doesn't have to pay their bills & feed their family can end up ruining peoples lives or in some more extreme cases end their lives is amazing. Whats worse is the OZLL reaction (over-reaction?) of the thought of someone with nothing getting something for free or that they could lose money on something crushes their tiny dark souls, its a great indication of how little value or worth OZLL put on the value of another persons life when their dollar is in question.

          The longer I live the more I am disgusted by people honestly.

    • Trying2SaveABuck on 05/04/2020 - 23:07
      +6

      So are you offering to pay the tenants rent? because if not why do you expect OP to pretty much give him free rent because 70% reduction in rent wouldnt even cover insurance and rates

      • funnysht on 05/04/2020 - 23:09
        +7

        It's easy when it's not your money to suggest being charitable

        • Trying2SaveABuck on 05/04/2020 - 23:10
          +1

          Well that is essentially what ALL SJW, Socialist groups, left wing groups BASE there arguments on spending/costing other ppls money

          Never seem them put there own hand in there pocket just happy to leech off someone elses hard work

          • Skyceratop on 05/04/2020 - 23:12
            +1

            @Trying2SaveABuck: DM me his details if you don't know how to save or organize yourself, I'll help him out.

    • tsunamisurfer on 06/04/2020 - 11:26
      +4

      Where are the LL with the savings to help a struggling tenant not be homeless during a once in 100 year pandemic event?

      The LL's savings are for….well….the LL? Who here saves for other randoms?

      Where is the humility and empathy?

      This is nothing to do with being humble.

      Nobody planned for this.

      They should plan for a period of unemployment under ANY circumstances, you cannot use the Virus as an excuse.

      Having a safe place to live during a pandemic is a god damn human right.

      Where does it say this?

        • tsunamisurfer on 06/04/2020 - 12:28
          +12

          Housing is a human right

          It's not on the LL to provide that, there is social housing that he can apply for without unnecessarily burdening the LL.

          A landlord, including myself, should prepare for a property not having tenants or in this case,

          Agreed, and I never said that the LL's revenue must be guaranteed. I just want the LL to have the option of removing a tenant in breach of the agreement. Whether or not another tenant is found is the LL's business.

          Stop being so cold and counting pennies

          It's not pennies.

          The Government and banks have provided landlords, including myself all the tools available to provide adequate housing during a time of crisis and all I take is a 6k hit to my loan - big deal - it'll recover. I've helped a family.

          They have also provided the tenant with assistance.

          If landlords are playing Russian roulette …

          I am all for LL's to suffer Financial Darwinism if they have not done what I expect renters to have done. I hold them both to the same standard.

          However in this case the government is artificially creating a situation where the LL has no recourse.

          If you don't understand this, maybe one shouldn't enter the property market.

          My properties are fully paid off and I am not even a LL so I have no skin in the game.

    • aboogee on 08/04/2020 - 12:59

      landlords have rainy day fund for themselves….not tenant?

  • mirz on 05/04/2020 - 23:06
    +16

    Based on this tenant theory, I’ll go to Coles tomorrow morning and will put everything I need in trolly and pay them 30% over the counter and walk away with trolley full of groceries.

    This is utter BS. Bloody PM is making statements left and right on daily basis without thinking who is going to pay for all this? Govt either shouldn’t intervene and if wants to intervene then must look after both parties equally.

    Free childcare for everyone. Just wait for another two weeks and see how well this will go too, lol.

    • funnysht on 05/04/2020 - 23:07
      -1

      Plus all the current workers should have a 40% levy placed on their incomes to help fund accommodation/food for these jobless people. Wonder how ppl would feel about that

      • mirz on 05/04/2020 - 23:22
        +5

        I won’t be surprised if next announcement will be to accommodate all such tenants in 5 star hotels and apartments, lol.

        It’s good to help people in tough times, but our govts are trying to be extra generous. We don’t know how long it is going to last for, but we are firing all ammunition on super fast speeds.

        It’s a good opportunity for everyone to learn about saving habit for a change.

        • Skyceratop on 05/04/2020 - 23:23
          +2

          Especially landlords, right? I'm a landlord and I saved for a rainy day, and now I can help my tenants.

          • funnysht on 06/04/2020 - 00:27
            +5

            @Skyceratop: Gee…if only tenants could save for rainy days too…

          • Chang1992 on 06/04/2020 - 08:44
            +4

            @Skyceratop: You do sound very generous in helping your tenants in whatever way you can. However, tenants do have to get their shit together too.

            • Skyceratop on 06/04/2020 - 11:33

              @Chang1992: If landlords are playing Russian roulette with the ownership of rental properties in the hope of making money, & not saving anything, then they are facing the loaded barrel. That's capitalism.

              • Chang1992 on 06/04/2020 - 12:30
                +6

                @Skyceratop: That would go the same with renters ? If they have zero savings and something impacts them financially, they could find themselves with no roof over their heads.

                • Mike88 on 06/04/2020 - 16:50
                  +1

                  @Chang1992: Get out of here with that logic!

                  • Chang1992 on 07/04/2020 - 06:37
                    +2

                    @Mike88: That's a hard reality for some people. The world is not always fair.

                    • aboogee on 08/04/2020 - 13:02

                      @Chang1992: wouldnt go as for as evicting people during hard times IF YOU CAN AFFORD TO HELP
                      but agree with your point about being financially responsible applies to both tenants and landlords
                      to think that landlords by default need to cover the shortfall is utterly wrong

                      • Chang1992 on 08/04/2020 - 13:06

                        @aboogee: I agree with you regarding if you can afford you help you shouldn't evict the poor bloke.

                        But if renters are primarily relying on land lords for a bail out. That, I'm against.

                    • wordplay on 08/04/2020 - 19:28

                      @Chang1992: and why should the individual try to make it any fairer if it does not directly benefit them?

              • jowu15 on 07/04/2020 - 23:07

                @Skyceratop: Government ban eviction for 6 month is not socialism not capitalism

              • jowu15 on 07/04/2020 - 23:13
                +3

                @Skyceratop: Can I be your tenant for the rest of life so I do not have to save anything, given you are saving for me, especially in my retirement which may need help

        • jowu15 on 07/04/2020 - 23:03

          Its already happening. Government already put Australians back from overseas in 5 star hotels for quarantine free of charge and provide food etc but people still complaining no fresh air etc.

  • nomoneynoproblems on 05/04/2020 - 23:31
    +3

    Tinfoil hat on, I think this whole thing is to save the house of cards that is the property market and not the tenants. Tenants that can't pay rent get the arse. In the current climate no landlord is going to find a tentant and if (big if) they do it's going to be on their terms. As we've seen many times before, most land lords can barely afford a month without rental income to sustain their over leveraged repayments (I don't blame them, the current system and banks encouraged it). Cue mass sell off of some of the worst apartments, poorly sub divided properties the country has ever seen dragged along with it our economy.

    • wordplay on 08/04/2020 - 19:30

      Landlords should not be at the mercy of tenants, they are the masters. if tenants were more savvy they would own a house.
      a landlord should never lose money by owning a house, the property will appreciate in value and the tenant will cover all other costs (but landlord can claim a loss for tax reasons).

  • heRyDrOiLicaVO on 06/04/2020 - 04:57
    +3

    I might be missing something here - but are all three people on the lease? If so, then they all remain jointly liable for payment of ongoing rent until the people who move out find someone to replace them (with your approval) or they find another agreement with you and each other to move forward.

    I understand the government is considering including landlords in the jobkeeper package (per numerous, recent media reports) so it may be a week or so before we all have more certainty on this issue. For now though, best advice is to try and work with the tenant, and wait on what the government has to say on this in its anticipated announcements.

    • tasty-falafel on 06/04/2020 - 08:17

      He mentioned in a previous comment that the tenant was the only one on the lease.

  • tomleonhart on 06/04/2020 - 06:07
    +1

    The reality is that this is a global pandemic and everyone is affected. Unfortunately for landlord, the goverment has handed power over to the tenants and there is nothing you can do at this moment. You can only mitigate the affect that this has.

    I suggest you reason with him for 40 - 50% rent deduction because lets face it, he wont accept 20-30% based on what he asked and knowing the power he now has. The worst outcome for you at this moment is that he stops paying all together.

  • popsiee on 06/04/2020 - 07:01
    -1

    All the landlords don’t seem to get that the tenant can thanks to the no eviction rule pay 0 and hence thanks to that they have the power by simply proving no income . Negotiate wisely from that point ! Seem all Landlords want to make up their own rules, unfortunately no longer you can . Seems hard to drum it in to some. Thank the government for the changes . I’m sure if the tenants have more dough they will spend it rather than the other way around hence helping the stimulus plans needed for the economy:)
    It should be the least of landlords concerns with the drop in value of their properties that’s going to have a much larger impact especially those that have higher leveraged .

    • serpserpserp on 06/04/2020 - 08:27
      +5

      I reckon some tenants will just not pay a cent of rent and squirrel away any jobkeeper/jobseeker money in cash under the bed and then walk away 6-12 months later when finally evicted. Could by then have 20-30k in cash for themselves to buy a nice Ute to help move into the next share house.

      • dbun1 on 06/04/2020 - 12:29

        nice ute to also run from the debt collectors

        • serpserpserp on 06/04/2020 - 20:40

          Agree to pay them 10c in the dollar first!

  • dbglt on 06/04/2020 - 07:38

    If all three are on the lease, it is irrelevant who has moved in or out (from your perspective). They are all responsible to see the rent paid.

  • OBEY YOUR MASTERS on 06/04/2020 - 08:05

    See if you can help the guy get some work. If you own multiple investment properties then chances are you have made some connections along the way. Make a few calls and see what you can do.

  • serpserpserp on 06/04/2020 - 08:23
    +2

    So OP. who's name was on the lease? Surely it was all of them and not just the painter at that level of rent.

    • baybeejuice on 06/04/2020 - 10:30

      Only the bf's name was on the lease

      • serpserpserp on 06/04/2020 - 20:40

        How did you agree to this? Surely a painter cannot afford that much per week?

  • shaybisc on 06/04/2020 - 08:28

    If he was in public housing and had no income apart from Job Seeker what would his rent be? It's a quarter isn't it?

  • Purpleheffs on 06/04/2020 - 08:32

    Can you consider a delayed payment? For him to be paying $150 per week now, with an agreement that over time the outstanding rent will be paid in full? A sort of payment plan? I mean, you can't get the money from him if he doesn't have it and you now can't evict him anyway. I would suggest either reduce the rent, delay the rent or put up with a 6 month loss before you can evict.

  • BinkyG on 06/04/2020 - 08:33
    +1

    All three tenants should have signed the lease. Therefore all three tenants are responsible for the rent. Right?

    • baybeejuice on 06/04/2020 - 10:29

      Only the bf's name was on the lease

      • [Deactivated] on 06/04/2020 - 13:04
        +1

        Why? How much was he earning that you and your RE thought he was good to pay $475/ week for a year? Did he have any savings?

  • Hedgehog on 06/04/2020 - 08:49

    Thought we all had a rent freeze, surely it would not be legal to alter the rent, perhaps let them break the lease and let you replace them as tenants. You may possibly rent at a reduced rental but surely would not have to discount by seventy percent? For breaking their agreement make them pay the agreed rent until you find a replacement tenant?
    My observation for what it is worth: This could be an ongoing problem if we face huge unemployment and could trigger a drop in property prices for a while.

  • Ashbargin on 06/04/2020 - 08:52
    +1

    Haven’t read all the comments. But my thoughts.

    How much was he earning before? For the next 6 months he will be eligible for Jobkeeper giving him the equivalent of $39,000 pa.
    He has access to whatever super he has $20,000 over the next 4 months.
    I would be consulting my landlords insurance. It is likely any negotiation on the rent will not be covered by insurance. So I would continue to follow correct procedure regarding overdue rent etc and claim on the insurance.

    • baybeejuice on 06/04/2020 - 10:29

      He was earning $1000 per week

      • Hardlyworkin on 07/04/2020 - 17:06

        Plus the extra $1000 in cashies ;)

  • JoJoker on 06/04/2020 - 10:49
    +15

    ITT: people who have taken on a speculative investment and didn't understand the risks involved. Congratulations, if your tenant is asking to reduce their rent, you're in the same boat as someone who had a stock portfolio or were close to retirement and have seen their superannuation wiped, or a business owner who doesn't have any customers anymore. Start being realistic, and fix your mindset – property should be evaluated like any other investment.

    OP: your tenant wants to negotiate. Try to understand his position, don't tell him to do things like access his super (you're not qualified to provide financial advice), and use that understanding to make a counteroffer. Your tenant knows that you can't evict him for 6 months. He knows you have to still pay your mortgage or your mortgage will at least continue to accrue interest. He probably also knows that thousands of AirBNBs have been dropped on the rental market so your chances of finding a new tenant are lower than before. Put forward your case to the tenant, explain your costs, be a human, and work together to come to a fair resolution with consideration for everything above.

    • [Deactivated] on 06/04/2020 - 11:31
      +1

      Can we sticky this to the front page of OZB please.

      • 2ForTheMoney on 06/04/2020 - 12:05
        +2

        No

      • funnysht on 06/04/2020 - 12:53

        No

        "business owner who doesn't have any customers anymore"

        Problem is LL have a customer who doesn't want to pay

        • JoJoker on 06/04/2020 - 14:18
          +7

          Can't*

          I work in a business with contracts. If my clients come to me and say look, I know we have an agreement but we literally can't pay, I'll come to the table to discuss.

          That's business.

      • Typical16-bitEnjoyer on 07/04/2020 - 14:41
        -1

        Yes.

    • ozhunter on 06/04/2020 - 12:56
      +1

      people who have taken on a speculative investment and didn't understand the risks involved.

      Nothing to do with it. It's about providing a place to stay to someone who doesn't want to pay.

      • bulldoglikeapproach on 07/04/2020 - 15:18

        Ok, so punt him. Who else moves in with no drop in rent? You're in dreamland.

        • ozhunter on 07/04/2020 - 15:21

          That's a decision the LL has to make. Risk evicting a tenant during this pandemic and have a harder time finding a new tenant or keep the current tenant and hope to recoup unpaid rent later on.

  • Narull on 06/04/2020 - 11:04
    +6

    70% off is insane and I'm a tenant. I've asked for 20% off my rent/weekly (basically $60 rounded) and I feel bad for that, but if the owner won't agree to it rent always comes first so I'll pay, it would just help a lot having a little bit extra atm with all this shit going on.

    Whole concept I got from the govs BS is we are meant to talk things out with our real estate/owners, I don't expect a free ride and I don't think OPs tenant is either, but he is asking for too much, hence negotiate. Sure offering him to leave without a fee is good too but then you're left with 0 income from your investment till you can find a new tenant (which seems difficult atm too).

    Giving the guy a break till the centrelink payments kick in makes sense sure if you can handle it, but then have your real estate draw up a new temp 6 month lease, he was paying 47% of his pay to rent, so if you can handle it ask the same, 47% of his centrelink payments so what $350ish? Still leaves him with several hundred a week for other bills, still leaves you getting some income from your property (better than none) and is more fair.

    Negotiate is the key I feel but people here seem to say it's one way or the other with no in between.

    End of the line is, his 70% off is too much I agree but having him leave puts you in the risk of not getting another tenant for who knows how long so it's an even worse loss for you.

    • JoJoker on 06/04/2020 - 11:07

      He has no income, he knows he can't find a new place right now so there is no way he will take that offer to break lease when he can stay in his current place for the next 6 months rent free.

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