Can't pay the rent? Just ask the government

I have a delightful tenant who hasn't paid rent since July. She's been on payment agreements, paying big chunks of money when she had it available. Until the local government housing department tells her not to pay the 2K owing as it may render her unable to continue her current quality of life. So with that advice, she stops paying rent altogether.

Coming up to tribunal date and I get a call from my PM asking me if I'd be ok to keep her as a tenant on the condition that her arrears (now 4K) is paid in full and she opens up a Centrepay account. Government housing will agree to pay out her arrears on the condition I keep her on as a tenant. Otherwise it seems likely that if I want to evict her, she will be allowed to stay at the property and go on a payment plan so low she'll be paying it for the rest of her life.

Wouldn't it be nice to have someone pay your debts if you can't be bothered paying them yourself?

 

Makes ya just wanna race out and purchase a swag of IP's.

 

We do, they're called tenants and ATO

 

Is it possible to accept their deal then put her on the shortest lease possible and kick her out as soon as it is up?

 

Two questions;

1) If the government will pay her arrears and then ensures that her rent is up to date going forward - what's the problem ? Unless she is damaging the property you know have guaranteed rental income for the duration of her tenancy. (Yes, I agree that this outcome is a joke for those of us that pay taxes, but why not use a broken system to your advantage!)

2) If you do go down the pathway of eviction and eventually kick her out won't a good LL insurance (Eg. Teri Scherr or EBM) cover most / if not all of your out of pocket expenses ?

 

1) she has been an erratic payer since the start of her tenancy. I've no doubt she will fall into arrears again. Centapay is a direct debit payment which can be stopped at any time by the tenant.

2) the first 4 weeks are not covered and an excess may have to be paid. Not to mention any cleaning/furniture removal costs that tend to occur when a sheriff is called in

 

They are probably arranging a payment plan for her to pay them.
Push on with hearing and get a formal order in place for the arrears to be paid off - by whoever!

 

Which insurer are you with? EBM is 6 weeks cover and no excess, from memory.

 

They are not stupid.I think the tenant has to have 3 continuous months of paying when due, or they dont want to know you.

 

Confirmed correct - 3 months of paying on time or payment 2 weeks in advance at beginning of tenancy - that's the best time to get landlord insurance

 

I don't really see the problem. You have an additional avenue to recover some of the money you are owed. If you don't want to take it, then you aren't in any worse position than you would be otherwise.

Apart from that, I wouldn't want to be in the tenant's situation - having to decide what bills to pay just to get by, and needing extra assistance.

 

She's not in any financial distress, she is merely choosing not to pay. She has been very honest with the PM - she had the money to pay the arrears, the 'advisor' told her not to pay, so she hasn't. Once the termination notice was issued and the PM contacted her, she told the PM that she was wasn't leaving of her own accord. She's fine with the govt department to foot the bill.

 

She's not in any financial distress, she is merely choosing not to pay ,

 

I will tackle this from another side..

You are saying she is choosing not to pay her rent,my question is

What % of her wage should be going towards her rental payments?

 

I don't think its an issue of "what %". Sounds like an issue with other things coming up. I wouldn't be surprised if the tenant's budgeting skills aren't that great either.

But I guess I'm just not so quick to jump to the worse conclusions about the tenant's moral culpability.

 

news: 'Sydney is a basket case': renters suffer most pain is the finding consistent with your observations?

 

Very good question.

If you apply the "olden days" Banking principle to borrowing - only 35% of your gross income towards all loans - then this is how much rent she should realistically be paying, to allow for some sort of lifestyle and food etc as well..

What's the bet her rent is higher than that 35%, because folks want to live in a decent place, and maybe the realistic level for her wage only offers shoit-boxes to live in.

Oh well; suck it up and do what is required...if you need to live in a 1-room bed-sit, or board in someone else's house to get by; that's what you do (both of which I have done for a 4 year period and wasn't that bad).

 

That's pretty unfortunate.
I've had one of them before, had to go to the tribunal after they moved out.
Got to decide if you want to cut your losses and move on or continue with the stress of having them there.

 

There is a difference between not being able to afford the rent for whatever unforseen reason, and choosing to to pay.

The latter is a scumbag.

FYI; I had a young bloke as a tenant for a few years (in our Frangers unit). One time I got an email from the PM via him pleading his case of loving to stay on, but had fallen on hard times for a short time, and would struggle to pay the full amount of rent each month.

"What do you want to do; do you want to issue a caution and remind him of the Contract?" was the PM's question...or words to that effect.

I said; "No; I've been 24 and broke too, and at least he got on the front foot and asked in advance. Let him stay, and he can fix it up when he can".

The young bloke paid his rent eventually and was a great tenant and fine young man.

After he moved out some time later, his mother sent me a hand-written letter via the PM, thanking me for being so "generous" and how much it had helped her son...

You can be poor, and you can be broke; it is no excuse for being a low-life human like so many folks are.

 

@Bayview sounds nice, but that could very well have gone the other way too. You'd be sharing a different story then?