NSW Can Fair Trading or NCAT force me to reduce rent?

of all the tenant applications ive received and reviewed in my landlord life, I would never ever accept one with zero income, unless the entire rent was paid up front,

I expect and my PMs always do find out what sort of job they have, how long they have been there, do they pay on time, check references, are they clean, etc etc

 

Fair enough. This PM didnt. They did question me about the zero income and I said I am happy to pay the lease upfront if required, but it wasn't, and although it is true I was able to I was not asked for proof.

I assume a check is made against a tenancy database, but I am also surprised I have never been credit checked as even the utilities seem to do this.

Anyway, my point is that vetting seems to be surprisingly relaxed and I have certiainly not come across any in depth anlysis of my financial standing in all the years I have rented.

 

I'm guided by this link in NSW which specifies documentation to request from tenants in order to move forward: Six month moratorium on residential tenancy evictions during COVID-19

The vetting of a new tenant really depends on the PMs processes. Generally the more work you do at the start in verifying income and history, the less probability of issues down the track!

 

So true. OP you really need to start preparing for the worst. The tenant might stop paying rent all together. Also if they vacate how easily you can find the new tenant? If not easy, can you break your lease and move to Point Piper unit? What expenditure you personally can cut etc. These are just example ideas and It might not come to that. But better to have a plan just in case

 

What type of financials does a PM ask from a potential tenant when assessing a residential tenant?

What are agents on this forum asking tenants for when vetting their financials? Past 4 weeks pay slip, last year's tax return, bank statements from all financial institutions, disclosure of all loans/debts they have?

 

What type of documents did the PMs collected?

 

can LLs also take bank to NCAT to reduce the mortgage payments by 50%

 

@Lil , remind the PM that they work for you, not the tenant, and they need to calm things down a bit.

The tenant is demanding financials from you? Ask the PM why this request is even being sent to you, and that tails don't wag dogs. Tell the PM to deal with it, and start looking for a new PM, probably one with some experience, and a bit more backbone.

Assuming that you are once again threatened with Fair Trading, you could walk in to the hearing and ask "what is unfair about adhering to a signed lease?", and, if you don't like the answer, just tell the FT Mediator that the mediation is finished, and the Applicant will have to go and get a Tribunal order, and is there anything else?

If not, get up, and walk out.

 

Does NSW have a clearly defined process like QLD for these matters? @Mel Morgan ?

We're required to issue a "show cause" notice which specifically tells the tenants that they need to substantiate their request for a rent reduction (or other consideration) with financial information. They have two weeks to return that, then the Landlord can consider. If they dont return that, it's business as usual with the Form 11 and Form 12. Simples.

 

When confronted with a rental reduction request, remember to try to keep in in context. Consider the alternative if the tenant has to relocate.

* You'll have to pay a letting fee.
* You'll have a vacancy period.
* Rental markets are likely to be depressed at the moment, the lease agreement is likely to be a lower figure than the current one.

I'm not saying you have to give free rent or accept a massive deduction, but a 20% reduction for a few months and then back to normal might be the best outcome for the landlord.

 

Or not! There's no guarantee that these tenants claiming large amounts of reductions are going to be in a position to go back to normal in a couple of months. I'd rather nip it in the bud sooner rather than later.

 

True, but if the market is already depressed by 20%, nipping it in the bud guarantees the next lease will be at a reduced rate. Trying to work out a compromise at least gives you the chance of going back to the regular rent, plus it's less likely to have a nasty tenant on the way out.

 

Yeah, but most of the tenants that have come to my attention, asking for up to 50% reduction, don't appear to be tenants that I'd want to keep anyway. I'd rather boot them, and take my chances. Of course, it all depends on where the property is too. There's a world of difference with tenants paying $800-900 pw rents to those on under $400. The top end of town will wear the brunt of this, I think. Disclaimer.....We've only got one at the top end, so haven't really had any issues to date.

 

My position is similar. I've got one tenant that initially said they couldn't pay rent, way back in early March. All the rest have been no problem.

That tenant has gone from not being able to pay anything, to finding money here and there to keep from going into 2 week arrears. We eventually were able to take it to mediation.

They offered $360/wk for 2 months (original rent was $460/wk). I pointed out to the PM that they're already 3 weeks late, so countered with 3 months at $360/wk to cover the arrears component. I figure to give them a bit of extra breathing room, rather than create more conflict next month. By doing this they're more likely to recover and go back to the original figure.

It also means that if it doesn't go well, I can point out to VCAT that I gave them more than they asked for.

The real problem was that their original requests were unreasonable. $0 for a few months, to 50% off. That's just silly. Now at least they're actually thinking about how they can get through this. Previously their communications were more a sob story than solution driven.

 

Hopefully by going to mediation, they realise that you are just a normal person & not some faceless billionaire, trying to screw them over.

 

The Govt shouldn't have meddled in this way in the first place. C19 is not the first and won't be the last black swan event. Market forces would've facilitated a fairer outcome for all parties.

Unfortunately the byproduct now is (in some cases) opportunistic behaviour because the balance of power is firmly in the tenant's hands.