VIC Advice - tenants have stopped paying rent.

Hi everyone,

I need some advice regarding tenants no longer paying rent due to the coronavirus.

A couple moved into my negatively geared investment property at the end of February 2020, paid 4 weeks rent of $500pw and for the past 2 weeks have stopped all payments. My property agent said this was due to one of the tenants losing his job (owns his own barber shop). The agent did not mention anything about his partner who is a nurse, so I am assuming she is still working?

The problem is, they are not from Australia and therefore are not eligible for any kind of rebate from the government or any rental assistance. I also do not have landlord insurance (I know...big mistake).

I did ask the property agent for some advice, however, he has mentioned he is not legally allowed to give any. The agent did say he is awaiting on documentation from the tenants regarding their financial hardship, but this was 2 weeks ago!

As I mentioned above, this is a negatively geared property and my only property, I cannot afford repayments if the tenant is not paying anything at all. It also makes me think they are wanting a free ride as they have not even tried to negotiate a reduction in rent, they have simply stopped all payments.

I would really like some advice on what to do next. I will definitely be chasing up the agent to more information/evidence from the tenants but aside from that I am at a loss.
Thanks in advance!

 

I don't know if this is right, but just save all document, note all the cost and claim back on them. Tell your PM that you won't be able to pay him if no rent, ask him to work together with you as tenant can't be evicted but they need to pay rent, now or later.

 

Are the tenants still communicating with the agent? As an agent it’s a lot easier to deal with these situations if the tenant has an open line of communication, but if they’ve stopped communicating this adds an additional barrier and also means you really need to take a different approach.

Agent can’t give financial advice, but they should be advising you on how best to deal with this scenario - it’s literally what you pay them for.

If the tenants aren’t communicating I’d be asking the PM to check the property (if they may have abandoned), if they haven’t paid in two weeks and are now more than 14 days in arrears PM needs to follow normal procedures at a notice to vacate and VCAT and explain this is what needs to happen.

There isn’t really any reason to stop paying entirely, obviously not being entitled to assistance adds additional stress for both parties - but if one tenant is still working it would be reasonable to expect at least something in most cases.

 

Property manager should be following all current laws in Victoria assuming your property is where your profile is, which have not changed yet in that state, to pursue rent arrears until such time laws are changed. Insist they do so. It is their job. They are supposed to work for you.

It is not in your interest to agree formally to any rent free periods, rent reductions etc... until such time as the laws are passed in your state and then you can review. Read some of the other threads here, if you agree to a rent reduction they still can't be evicted if they don't pay and then you have reduced your ability to claim against them for future damages.

 

There will be a hold on evictions, not a hold on paying rent. As Lil Skater says, if one is still working then you would expect something (and if one is a nurse then they are highly likely to be unemployed - and possibly getting significant overtime).
ScoMo has asked for people to sit down and work things out, not just to abandon their responsibilities.

I agree with Lil Skater's post above, with the addition that you should look at your options with your lender to see if you can put off your repayments.
A notice to vacate will hopefully make it clear to them that they need to take more action than just stopping payments.

 

1. New PM
2. Breach for arrears, evict if not remedied
3. Re-lease to tenants with jobs or who get cenno
Nb. If can’t evict due to law change, LL insurance claim when you do finally get them out (if they don’t pay back arrears)

 

I'd advise people to be careful with the assumption that all nurses are working/getting overtime... not all nurses are employed at the moment.

Nurses in the private sector, casual bank nurses, agency nurses and those working in admissions are just some of the nurses that I am hearing are desperate and looking at whether they are eligible for centrelink.

I am a nurse looking for overtime... but sadly there is very little available out there at the moment. Today I attempted to pick up an extra shift and it was taken off me shortly after, and given to a casual nurse (fair enough, the casual nurse is likely struggling to survive at the moment).

The current situation in Australia is very different to the one seen overseas. Perhaps this will change soon.

 

What the hell!

It's his job to give you advice!!!!

 

Exactly, otherwise they are just rent collectors.

 

Give Notice to move back into the property?

Then rent out your other place or break lease.

 

I'd also contact your bank about a loan holiday until this is sorted, purely for your stress levels.

Most banks are freely offering 6 months

 

No the tenants have not been replying to PM and now the PM is not replying to me!

I will take everyones advice and find a new PM who is willing to do their job.

 

@Trinht lots of great PMs on here, should be able to find someone local to your property.

 

Sounds like the lines of communication have completly broken down.
Obviously not a good outcome.

 

Try and contact the principle or at least the head of property management at the agency.

 

Is this in VIC? This sounds so much like our nurse tenant a year ago new zealand background. She was notorious for moving fr one place to another just paying deposit and rent in advance and then stops paying rent altogether coz she knows it takes months to get evicted so the deposit and bond is well worth the money paid - 2 months worth for 6 months free stay. Found that out after we evicted her. You should let your agent settle this issue. That’s what you paid them for.