Advice on rent arrears situation

Hi all,

First time poster here. Hope you are doing well.

Just wondering if I could have some advice on the following situation:

My tenant was in arrears for 3 weeks in late December 2019. They have been living in property for 1 year. They are in arrears due to husband being unemployed. Wife is on centerlink. They have 4 kids. Termination notice was served by agent in mid of Jan 2020 and at beginning of Feb 2020 went to tribunal. At tribunal order was made stating that tenant could continue to stay and need to pay the arrears as installment plan (minimum extra $50/week on top of weekly rent) and failure to do so will result in the whole of balance being paid immediately. Also mentioned, if order is not complied by tenant at any time before Aug 2020, landlord may request the tenancy agreement to be terminated.

The installment plan only works until mid of March 2020. After that tenant was on and off with payment and agent need to keep reminding them. During this period, Covid-19 also came into effect. Until today tenant are 5 weeks behind in rent. Husband and wife are now both on centerlink.


Based on what is written on the order which is legally binding, can I just go back to tribunal (after 60 day stop on eviction - 14 June 2020) to terminate tenancy agreement or will it be overwritten by the new "Covid-19 Six month moratorium on residential tenancy eviction", i.e I need to go through Fair Trading mediation, etc? Tenant was unemployed pre Covid-19 and tenant doesn't request any rent reduction at all. They basically just pay rent whenever they feel like to.

Thank you all for your feedback in advance

 

Thanks for your reply wylie,

Although our tenant was unemployed pre Covid-19, I'm just worried that they could still argue on Tribunal that they can't find work due to situation now. Does Covid-19 affected tenant only applied to those unemployed because of Covid or also apply to those who can't find work due to Covid?

 

Just to clarify for you, there is no such thing as a "COVID-19 six month moratorium on evictions". That was a catchphrase uttered by the PM in a press conference - what matters is your state's tenancy legislation - nothing else. The NSW advice is here: Residential tenancy moratorium on evictions during COVID-19 and a flowchart at https://www.fairtrading.nsw.gov.au/...e/0008/818801/Tenancy-agreement-flowchart.pdf

First, have a read of the eligibility criteria for "affected by COVID-19". Assuming I've read what you're saying right, neither husband nor wife were made unemployment as a result of COVID-19. In this scenario, neither the 60 day stop on evictions nor the six month restrictions apply, and you should follow the normal process - apply to the tribunal for the termination order, followed by a possession order.

 

Thank you Mat. The flowchart is very clear. I always under assumption of general unemployment during COVID-19 instead unemployment as a result of COVID-19.

 

What state is the property located in? There are different rules for different states.

Chances are that you should be seeking vacant possession ASAP. They have failed to meet a payment schedule ordered prior to COVID and are actually in a significantly better financial situation than they were when the schedule was ordered.

We had a successful Warrant of Possession ordered last week. The tenant tried to claim she was COVID affected when she hadn't paid for 6 weeks and the household income was COVID-enhanced centrelink. The member tore her a new one over it- tenant didn't stand a chance!

 

Tom, thanks for your feedback. The property is in NSW.
The tenants keep saying that they will pay up so at the moment my agent is still closely monitoring them before the due date. What worries me is if tenant pay up all the arrears before the due date but after that keep doing late payment again as previously. Will it make the payment schedule order expired and I have to reapply again for the tribunal to kick them out?

 

You'd have to consult the exact wording on the order, but I'd imagine if they get completely out of arrears that order would be completed. If they fall into arrears again you can start the process again.

That said, the tenants have already breached the agreement and failed to adhere strictly to the tribunal ordered payment plan. You should have already re-applied to tribunal for vacant possession.

 

I wish my property manager could advise and act like you
My property manager probably thinking it is better to retain the current tenants by keep reminding them to pay (since they are still paying although not consistent and late) rather than finding new one which will be hard during current Covid-19 situation.

 

G O L D !!!!!!!!! Thanks Tom... your last sentence has made my day !!!!!!!

 

This could be a communication issue. Have you actually decided if your desire is to evict and get new tenants or if you want to keep the existing and have them pay? If you want them gone then you need to be clear with your communication to get the PM to breach and evict at any/every opportunity

 

Whereabouts in Sydney is this property, and what is the $$ rental pw?

Either you need a new property manager, or you have not made it clear that you expect your manager to follow through with the orders.

 

I'm surprised the Tribunal gave a specific performance period of 6 months.

Back the early years of my pm experience, I would always apply for a 6 month 're-list' period.. and this was usually granted by the Tribunal...

Nowadays the maximum they will give is 3 months unless you can show why the period should be longer (best way to do this is if the rent arrears payment plan requires a longer period of time in order for the arrears to be fully paid off)...

 

If the tenant breaches the payment plan, then it should be a straightforward path to vacant possession, regardless of Covid since their household income has not decreased by 25% as a result.

Yes make it clear to your PM that you want the tenants gone as its not worth the stress. The rental market in Sydney has improved now that restrictions are lifting and plenty of people are looking, although it does depend on the area.

 

Similar situation for my rental property in VIC. Tenants were given a termination order by VACT today to leave within 28 days. PM applied last month when they were 20 days in arrears ,they paid and now they are in arrears 11 days this month,so we still proceeded to VCAT ,and got the termination order,but possession order was refused . I want the tenants out . If they pay the arrears within 28 days ,cannot get a vacant possession order , are there other avenues to get a possession order