Have you been asked for a rent reduction?

Discussion in 'Property Management' started by ozwanderlust, 23rd Apr, 2020.

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  1. ozwanderlust

    ozwanderlust Well-Known Member

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    Is there a survey on the forum as to whom having tenants asking for rent reduction?
    Our tenant in nsw (via PM agent) has asked for a 20% rent reduction for 6 months as his hours have been cut from 38 hours to 30 hours.
     
  2. Mel Morgan

    Mel Morgan Sydney Property Manager Business Member

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    About 20% of my tenants have asked for some form of reduction and a handful of others have vacated.

    If the tenant is on a fixed term agreement, I would follow this: Six month moratorium on residential tenancy evictions during COVID-19

    If they're on a periodic lease or nearing the end of their term, then it becomes a commercial decision on how to keep them given the vacancy and expenses in re-letting. Currently vacancies are pro-longed due to excess supply and limited demand.
     
  3. Rugrat

    Rugrat Well-Known Member

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    Not yet. But we actually approached the tenants who were at risk, back when restrictions started to happen, to tell them to come and talk with us if they find themselves out of work. I know it alleviated a lot of stress for a couple of them, knowing we were flexible. And I also trust them, that they won't ask for a reduction or anything, unless they have no other options.
    A good relationship with open and honest communication has made us all feel less stressed and empathetic towards each other.

    Fabulous tenants like ours are worth being flexible for. I will happily wear the cost of helping them out if needed. I couldn't say the same if they were problematic / demanding tenants.
     
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  4. Omnidragon

    Omnidragon Well-Known Member

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    I’ve had rental reduction requests from around 30% of my resi. I’ve had 10% of my resi disappear and vacant.

    I’ve had 90% of my commercial just blatantly refuse to pay a cent. Nor have they bothered to negotiate or course (not quite sure what fairy land the PM lives in). And 20% who have asked for rent reduction (overlaps with the 90%).
     
  5. kierank

    kierank Well-Known Member

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    None yet
     
  6. JohnPropChat

    JohnPropChat Well-Known Member

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    Two of them tried which I followed with "show evidence" and potential ramifications of paying this back later, all worded diplomatically ofcourse.

    No response and the rent kept coming in. They were just giving it a shot. I am happy to do my bit when there is actual need but not otherwise.
     
  7. spuddy

    spuddy Member

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    We've had 1 of 6 resi's ask for relief which ended up being a 20% deferral for 3 months to be reviewed again at the end of July. Checked in with relevant PM's and the others are all still ok.

    And of course our "lovely" commercial tenant just refusing to pay and asking for 100% rent forgiveness. We just heard from the PM that another commercial office he rents down the corridor in the same building he has negotiated based on a 85% reduction in turnover so we're holding out for similar (42.5% abatement/57.5% deferral for 3 months).
     
  8. TMNT

    TMNT Well-Known Member

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    thankfully only 1 , which the agent basically said "stop playing dumb"

    Looks like I will be holdng my breath for end of month disbursements for the next 6 months
     
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  9. Angel

    Angel Well-Known Member Premium Member

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    I had money deposited into our business account half way through the month. I'm not game to ask my PM any questions though.
     
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  10. HUGH72

    HUGH72 Well-Known Member

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    Not one so far and to my surprise all now paid up to date.
     
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  11. devank

    devank Well-Known Member

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    One tenant asked for a 6-month lease extension but lost his job. I renewed it with the same rent but told him to pay $10 less. It isn't much but over a year it is $520.

    Interestingly PMs won't get any money if they stop paying rent right? They will have to work for nothing!
     
  12. Ummm

    Ummm Well-Known Member

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    I'm in secure employment but I just asked for a rent reduction based on market rents dropping and got it without any push back..
     
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  13. James Bond

    James Bond Well-Known Member

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    Yep us too - including tenants in the UK. Still hold my breath every time I see an email from a PM though.....
     
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  14. Bazza

    Bazza Well-Known Member

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    We had one tenant out of four ask for a reduction as he had lost his job. I figured we could go 30% reduction across the board and still pay the mortgage and rates so I gave him 30% reduction for three months or until he gets money either from the government or a job. Better to get 70% than nothing. You can't hide from the inevitable.
     
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  15. wylie

    wylie Moderator Staff Member

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    What suburb is this please? And did you leave the lease "as is" and just verbally tell him to pay less, or put it in writing, or write out a new three month lease?

    What suburb do you live in, if you are happy to share? We hold in only two suburbs. I've checked probably each month, last time just a few days ago and neither suburb has houses renting for less than ours currently are. We've got slightly lower rents due to construction in the back yards, so our situation isn't "normal" anyway.

    I'll keep an eye on our suburbs though as we get closer to lease renewals. If market rents drop, we will work with sitting tenants to keep them.
     
  16. TMNT

    TMNT Well-Known Member

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    That's the exact definition of taking advantage of a situation
     
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  17. skater

    skater Well-Known Member

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    They are in the UK, so irrelevant.

    And poor form.
     
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  18. wylie

    wylie Moderator Staff Member

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    I assumed they were from UK but living here? But if they are in the UK, then agree, not relevant here.
     
  19. Bazza

    Bazza Well-Known Member

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    Wylie, the property is in Varsity Lakes Qld. I just emailed them with the agreed changes which apply for 3 months of until they get income. I will confirm with a COVID-19 tenancy variation agreement form (Form 18d) now that parliament has officially made the changes.
     
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  20. James Bond

    James Bond Well-Known Member

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    Presumably if rents go up you would accept your landlord applying an instant surcharge? Oh wait.. that's not legal...