Covid Rental Reduction

Hi all,

require some advice in regards to below.

Tenant is requesting a rental reduction for 6 months but not providing any financial hardship evidence of loss of employment or work hours reduced, the only reason they are giving is that their sub tenants have moved out and now can't afford the rent. The property was rented out to the tenant on their income and their ability to pay rent not on their ability to pay rent along with sub tenants.
Offered a 3 month rental reduction instead, but the tenant has not agreed to this. We have decided to take it to disputes.
What will be the outcome of this ?

Have had nothing but issues with the tenants from the start of the lease.

Feel the property managers have also not done their due diligence in approving the application (no bank statements were provided when putting forward this application for approval but were given a glowing review to approve this applicant).

 

If the tenants are not providing any evidence of financial hardship then how do they expect the agent or you to seriously consider their request for rent reduction?

Were the sub-tenants approved by you? If not, that was a breach of the lease.

If your agent has made repeated attempts to get some evidence as per above, and the tenants are not providing this, then your chances at Tribunal are pretty good.

Maybe the 'glowing review' was given by the previous agent who wanted to move the tenants on for whatever reason... and now that 'glowing review' ain't shining so bright.

 

Exactly, i dont understand how am i to consider a request with no evidence, this was raised with consumer affairs and they agreed that the landlords have the rights to request evidence and the tenants are within their rights to not provide evidence as well. So i asked them how do i agree to rental reduction with no evidence then and they suggested it needs to be done in "good faith".. what does that even mean ?

The sub-tenants were not approved, again the tenant put in a request for subtenants a few weeks after moving in, and i said i need to see the sub tenants applications. the tenant only sent a snapshot of the a licence, i said thats not enough and the tenant went to VCAT, and the case was dismissed by VCAT saying the landlord is not withholding consent. A few weeks later the tenant came back saying that he went to VCAT and that VCAT said the licence was enough documentation. Asked PM's to provide VCAT proof and never received it (as they said lets just leave it and not upset the tenant). Was under the impression that there were no sub-tenants, until when a rental reduction request was made, that the rent is not affordable now with no sub-tenants.

No idea what to do here ? Clearly the tenant cannot afford the property. Just so much of stress. Any suggestions on what to do here ? Would just prefer the tenant to move, just taking up so much of time and energy.

Any help would be much appreciated.

 

Thanks wylie, yes definitely on the cards to do this but concerned whether a new PM will make the situation better or worse given they will not have any background info.

totally agree that the PM's have not done their due diligence to start off with and when questioned about this they took offence and were defensive (yes this is obvious). But just totally over this as it should not be on me to be up at night reading legislation documents etc. to work out a POA. The tenant is clearly someone who the PM's dont want to deal with as is probably being difficult and so the PM's only deal with the tenant via email

 

If I was in genuine hardship I would accept the three months and then revisit it then rather than stand my ground on six months, so they probably are trying it on.
The easiest solution might be to offer to let them break thier lease withput penatly and move out.

This topic has been done to death over the last six months but from what I remember you are right in that you can ask for evidence of hardship, but they are not obliged to provide any.

Having been through the vetting process numerous times as a tenant myself I can tell you the vetting/reference process is a complete joke (to the landlords detriment).

The most thoroughouh due diligence I've ever come across is having to provide two payslips, some ID, and a reference or two who more often than not doesn't get contacted anyway. Any listed 'landlord references' are just as likley to be thier personal friends anyway. I've done it, and I've done it for others. Its common.

What's done is done, but next time spend an hour getting to know your potential tenants before handing over the keys to your investment worth hundreds of thousands of dollars.
The last few properties I've rented I have never even met the property manager, just the admin person who goes through the paperwork on move in day.

 

An offer to move out and find a better suited property was also offered with only giving a 1 week notice to vacate. The tenant is on a month-on-month lease, happy to do anything to be able to get the tenant out.

Yes totally get the the vetting process is just a total joke as there is also no standard process as each PM company has their own process. Lazy ones ofcourse will do the bare minimum and try get the first application they get in.

Just frustrating that there were a few applications and this one applicant was pushed by the PM because of their "glowing review".

Definitely a hard lesson learned and sure to no longer leave it to the PM's to decide anything !

 

Yep! OP, have a read through these threads.
How has COVID-19 affected you as a landlord?
International student accommodation tenants in financial difficulty
Should my PM be doing more?
Non paying tenant - It's started.

 

Oh dear! I bet you're going to see more posts like this one in the future. I've just gone through a similar thing, tenant asked for a 30% rent reduction and couldn't prove Covid affected, so I refused, come 3 months later they gave notice to vacate and told the PM they've bought their own home and the lease expires in February. They've told the PM that they'll pay the rent till new tenants are found but knowing how many problems we've had with them in the past I very doubt it.