Rent Arrears while paying Monthly Rent

LLifespan on 06/05/2020 - 16:43

Hi All,

So I have been put in a situation where my tenant is in rental arrears of about 10 weeks, noting that they were in arrears pre-COVID-19 and that the current situation has made their rental situation worse with them now being unemployed. However, now they have been able to pay their monthly rent thanks to the Government stimulus package but still 10 weeks in arrears and no pro-activeness to pay back their arrears. Property is managed by an agent.

Has anyone been experiencing situations like that ? Would like to know how everyone else is dealing with this as currently I cannot evict this tenant due to rental arrears.

Some other points that might be relevant:

  • They have not requested for a discount on their rent.
  • I do have landlord insurance but would only be able to claim once they are out of the property.
  • I have no issues financially if the property was not rented out, however, as it is currently being occupied it would be nice to have that rental income.

Thanks All

Home & Garden

Comments

  • capslock on 06/05/2020 - 17:13

    Once they are employed again ask them to start catching up on the arrears.

    If they still don't have a job by the time the eviction ban is lifted then consider your options.

  • xuqi on 06/05/2020 - 17:13
    +1

    Evict them as soon as you're allowed. Doesn't sound like they'll change once the Covid support ends.

  • MrHyde on 06/05/2020 - 17:32
    +13

    How did you or your rental agent let it get upto 10 weeks in arrears. Our rental agent starts the legal process of notice and eviction as soon as the rent gets to 1 week in arrears.

    Check your rental insurance PDS as there would be a clause in it specifying that notice has to be sent within a certain period, otherwise they will not cover the arrears.

    • bohn on 06/05/2020 - 18:29
      +3

      How did you or your rental agent let it get upto 10 weeks in arrears. Our rental agent starts the legal process of notice and eviction as soon as the rent gets to 1 week in arrears

      Yeah well, tenants have 14 days under the Act to pay their rent, which means any notice cannot under the law be served until the 15th day. But I do like their enthusiasm.

      OP, your agent should have definitely served a notice on your behalf - at the hearing, your agent could have shown some compassion on your behalf and requested a payment plan rather than eviction if that's what you wanted to try first. Or if eviction wasn't possible during this time.

      Although, it is often the fault of landlords that this happens. Seen it numerous times. Property manager calls the landlord saying they want to serve a notice to protect their interests etc, and the landlord says something along the lines of 'no, not yet, the tenant has always been good all these years' or some crap. Then after awhile the landlord wonders why they are in the crapper.

      Some landlords don't want to pay the VCAT application fee and the appearance fee of the agent.

      • MrHyde on 06/05/2020 - 19:03

        Well, the agent starts the process - which would involve chasing up the tenant by phone/email and letting them know formal proceedings will commence if rent is not paid within the next week.

  • Ocker on 06/05/2020 - 17:42
    +22

    Sack your agent

  • elgrande on 06/05/2020 - 17:48
    +3

    Dont count on insurance covering it

  • mbck on 06/05/2020 - 18:11
    +3

    Horrible agent

  • forrester on 06/05/2020 - 18:20
    +4

    How did the agent let this happen in the first place?

  • MITM on 06/05/2020 - 18:27

    Check out NSW Gov Department of Housing for Rental Grants. Queensland Gov has Rental Grants (FREE MONEY) for up to $2000.
    Tenant has to apply but grant is paid directly to Owner. Get your agent on to it to pass on the info to the tenant (slack bast*%ds)

    • Cheeper on 06/05/2020 - 18:55
      +1

      The tenants are getting away with not paying now so they would not bother applying for any govt assistance.
      My experience with this type is that they ride the free rent game for as long as they can and then go and sting some other sucker.

  • mreddie on 06/05/2020 - 18:47
    +3

    Get rid of your agent and kick em out as soon as you can

  • Meho2026 on 06/05/2020 - 18:48

    Your agent should never have allowed things to go on for that long. Once this is resolved get rid of your agent.
    In the meantime give your agent hell and make them communicate with the tenant on how they are going to catch up with payments.
    This week, some but not all of the landlords insurance policies have now removed the requirement to have commenced eviction proceedings to make a claim for loss of rent.
    Check with your insurer.

    • MrHyde on 06/05/2020 - 19:02

      The problem for the OP is that the rent arrears problem started before COVID19. From insurance side; check the policy again on whether the changes only apply for COVID19 related delays or also cover previous.

      • Lifespan on 06/05/2020 - 19:22

        The problem for the OP is that the rent arrears problem started before COVID19.

        Yeah thats my problem, they were about 3 weeks into arrears and was planned to be paid off at the end of that month, however, COVID hit and everything went down hill from there.

        Thanks I'll check my insurance policy.

        • Meho2026 on 07/05/2020 - 01:28

          If the tenant was further behind and the last payment brings their paid up rent into the COVID19 lock down then that may satisfy your insurer.
          The other angle is in NSW, the tenants have to provide evidence that their household income has dropped by at least 25% due to one or more leaseholders being affected by COVID19. Otherwise they are not protected by the 60 day stop on evictions.
          That means if your tenant has just decided they won’t pay or their income reduction wasn’t related to COVID19, you can evict them

  • Ughhh on 06/05/2020 - 19:17
    +2

    I cannot evict this tenant due to rental arrears.

    Then what incentive is there for the tenant to pay? They're better off not paying.

    This is like chasing your losses at the casino.

  • salmon123 on 06/05/2020 - 19:53

    Does the tenant have any assets? Car, tv, etc?

    There's nothing stopping your from commencing debt recovery through the courts, even though you can't evict them…

  • Dlw on 06/05/2020 - 20:54
    -2

    Sounds like you might have to enlist the help of Tracy Grimshaw and her ACA crew. They love this stuff.

  • Trying2SaveABuck on 06/05/2020 - 21:16
    -5

    Sack your agent and i think there might be a loop hole in the evictions ban - you can boot them out if YOU are planning to move back in i think you got to give some a lot of notice but if this is possible just BS say that you are moving back in otherwise your homeless blah blah crap and then give it 4 weeks after giving them the boot the re-advertise

  • brokenglish on 06/05/2020 - 23:22
    +1

    Change your agent. Please.
    Once I was 1 day late and I got a text, an email, and a phone call telling me if I don’t pay ASAP they will start eviction procedure. This is Buxton.

  • TheBilly on 07/05/2020 - 05:19
    +1

    You can just engage a debt collector. It's legal, effective and and actually will assist with the issue of rent arrears.

  • popsiee on 07/05/2020 - 06:16

    Some of the biggest companies are refusing to pay rent during this period who can afford it .
    Thank the government OP .

  • BigBirdy on 07/05/2020 - 08:34
    +1

    You said the tenant is now able to pay the rent, implying that they are actually now paying rent. If this is the case, why are you now asking what to do, rather than dealing with it back when the tenant was both in arrears and not paying anything? Surely if they are now paying, it’s better to just stick with them and deal with the arrears when they either stop paying, or depart.

  • capslock on 07/05/2020 - 08:55
    -1

    The comments here sounds like a lot of people would be happy with banks starting the eviction process after just a week or two of people falling behind in their loan repayments.

    • xuqi on 07/05/2020 - 12:35
      +1

      "10 weeks in arrears and no pro-activeness to pay back their arrears. Property is managed by an agent."

      I'd expect banks to commence proceedings, if someone missed 10 weeks worth of mortgage repayments.

  • Capo93 on 07/05/2020 - 10:45

    I would have thought because the arrears was pre-covid you would still be able to evict or take them to tribunal. I’m sure there was another post on here the landlord had said he was going tribunal because the arrears was pre-covid.

  • Tigercjn on 07/05/2020 - 12:17

    Maybe ask them how they intend to catch up, do they want to start paying some more per week while they can to try and catch up.

  • Lifespan on 15/06/2020 - 23:44
    Merged from Tenants Not Paying Rent during COVID-19

    Hi all,

    Wanted to know weather other people have been experiencing the same situation as I have.

    So as the impacts of Covid-19 has had on the workforce, my tenants had lost their job and found themselves on jobseeker.

    I have recently found out during this time, they were basically living pay check to pay check and are struggling to pay rent.

    They had not ask for a reduction in rent and basically just told my agent that they could only pay 2 weeks of rent in a month. This only lasted for 1 month before they just basically stopped paying rent and giving the excuse that they had other bills to pay.

    I feel like this tenant of mine is taking advantage of the covid situation to halt his rental payments. So far this guy is 3.5 months behind in rent.

    I've asked my agent to book a tribunal but its not locked in until mid July…

    Is anyone else experiencing something similar with renters ?

    • Hybroid on 15/06/2020 - 23:48

      There's currently a six month restriction on landlords evicting tenants who are financially disadvantaged by COVID-19. There isn't a huge amount you can do but try to negotiate a rent reduction with the tenant.

      • dizzle on 16/06/2020 - 08:51
        +1

        However, be aware that if you negotiate a reduction, they won't owe you the remainder. If it carries on like this, you can evict them when the restrictions end and they still owe you the full amount.

        I would make them aware that they owe the arrears, and see how they are willing to pay at the end of the restrictions - extra $150 a week for x weeks. This will put the terms out there for them. if they ditch and run, there may be ways to get it back through the courts

    • PissLUR on 16/06/2020 - 06:21
      +4

      And what does your agent do all this time? Seems useless to me.

      • niknah on 16/06/2020 - 08:44
        -1

        If this is in NSW, the ban on evictions only stopped a few days ago on 13/June.

        Only if the owner has also been affected by covid, they could have done something before that time.

        • Lifespan on 16/06/2020 - 16:08

          Thats good to hear!

    • Quantumcat on 16/06/2020 - 06:40

      I think you're still allowed to give notice if you want to move back into the property,so that's something you can try.

    • newak on 16/06/2020 - 07:12

      I think you need to organise an official rent reduction with your tenants which they are able to pay. It would be a percent reduction agreeable to both you and the tenants. At tribunal they will just claim they have no money and you cannot even get them evicted.

    • HeWhoKnows on 16/06/2020 - 09:04

      There is a monitorium on evictions based on non-payment of rent but that doesnt mean the tenant doesnt owe the money. Good luck trying to collect it beyond the amount of bond. This should have been backstopped by the government.

      As usual landlords have been left to carry the can.

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