Have you been asked for a rent reduction?

Well if a workable and transparent means to make up the shortfall was readily avaliable then that's one thing, however I cannot see one.

A tenant-land lord relationship is usually limited to twelve month intervals. A landlord-bank relationship is decades long by way way of a mortgage so deferring loan repayments are somewhat more practical.

Should the LL be forced to accept a rent reduction with no hope of recovery? Well, it would appear so in the current climate.
It might not seem fair but the theme of 'we all must wear the pain' seems to be ruling for now.

 

After weeks/months of to and fro, I've passed on a temporary 10% reduction.

I've learned a lot about this tenant through this process.

 

Could you elaborate on what you've learnt? Good or bad?

What was the initial figure asked for by the tenant?

 

I'm surprised why you can't see why that is so, it's fairly obvious. At the end of the reduction period, requiring the tenant to then pay back that amount when the reason they requested hardship assistance in the first place is that their income was significantly reduced to the point that they were literally unable to make ends meet, is obviously just going to result in compounding the hardship. Especially as that tenant will likely have to move to a new property, paying another several weeks in advance and another bond while likely fighting a recalcitrant landlord to get their old bond back, all the while being expected to pay back hundreds or thousands of dollars on top of renting their new premises.

The landlord, by way of comparison, still owns the property at the end of the day and has an asset which has inbuilt equity, and will be considerably less burdened by the deferral of mortgage repayments. It's mind boggling that you could argue it's somehow fairer to make someone in financial hardship accrue a massive debt to someone who owns an asset worth hundreds of thousands of dollars to avoid that asset owner having to take a temporary reduction.

I will suffix that with the statement that my personal view is the banks are also holding a very weak position, and my view is that the burden should be apportioned based on relative ability to wear it without breaking a sweat (and no, that does not mean the landlord...) but it is what it is and shoving all the burden down on the part of the chain least able to bear it is not an acceptable outcome, and that's what you seem to be arguing for.

That in mind, the QCAT decision does have one promising outcome and that is that they assessed whether the landlord would have been put into hardship by extending as reduction too - provided this precedent holds, it should mean that in cases where a landlord would in fact be severely impacted, the tribunal would allow that to hold some sway in the decision.

 

How would one show 'financial records of savings' or lack there of, to the PM.
At the end of the day couldn't the tenant provide a transaction record or statement for an account with an end balance of $0?

 

1. So not paying back a debt is okay? But only in this case? How about they don't pay back their car loan? Or credit card debt? Can they be wiped as well? And if not, why not?

2. Why add recalcitrant?

3. mortgage repayments that still have to be paid back with added interest. So it's okay for the bank, but not the LL? Because the LL is better positioned than the T, but isn't the Bank better positioned than the LL?

4. Starting to sound a bit like communism.

I'm not arguing against rent reduction. I've never said otherwise. It get it. What I'm interested in is the morals and ethics of the situation we are in and the shifting values of what is okay and not okay.

 

The forced rent reduction is not a debt, and as such is not required to be repaid. Whether that's fair or not has been determined by our elected officials.

I dare say the relief banks are offering to landlords is not a charitable act, but an off the record 'directive' by government.

One thing I think few will disagree with is that a landlord is in a better position to capitalize that interest expense over the course if a mortgage than a tenant is to make up for in the months ahead.... or in other words, are any tenants being offered terms to repay the shortfall at circa 2.5% over the next 20 years?

The way I see it is that goverment have forced the banks to offer relief to landlords, and there is an expectation landlords will come to the party too... or as the case here, forced to.

Whether or not that is fair obviously dependent on your own interests.

 

Exaclty, I have plenty of accounts with $0, and plenty in Oz and overseas with substantially more than zero.
There is really no way for a tenant to prove they have no savings to draw upon.

 

Two groups of adults signed a balanced legally binding government endorsed contract. Clearly the government thought COVID was going to be a lot worse than what it is but just like anything once they give something to the "disadvantaged" it is politically hard to reverse

 

You aren't the only one taking a bath. Electricity suppliers have also been warned that now is not the time to disconnect supply. Finance companies are waiving debts and fees left right and centre. And at least you aren't a commercial landlord who can be told they're getting no rent and have nothing they can do about it.

If a tenant has to go to QCAT to get a reasonable outcome, that landlord is recalcitrant by definition. It's funny because in the Sunshine Coast case, the landlord could probably have gotten a better outcome for themselves if they hadn't forced it all the way to QCAT. The willingness of a tenant to pay 35% or 40% of their income on rent is a fair amount higher than the willingness of a tribunal who have a brightline test of 30% to award higher.

I'm guessing this is where you stopped reading, because you clearly missed where I said that I take issue with the fact that the best placed entity to weather the burden without breaking a sweat is the one that ultimately is getting off scot-free. To me it's abhorrent that banks are being given hundreds of billions of dollars at cheap interest rates (0.25%) to allow them to extend relief down the chain and all they are willing to offer is a six month deferral with interest accruing at 3.5% (using an average here), or a six month deferral with two years of fixed rates at 2.79%.

No it isn't, what rubbish.

Ultimately, what has to happen during an epidemic or a pandemic is that the public health interest must be weighed against the economic interest, and a recognition of the fact that the economic interest cannot be served if we're all dead. Obviously we're not all going to die, but look at places like the US.

Swift decisive action to stop people moving around until rates are under control enough that restrictions can be loosened and any outbreak can be controlled by outbreak response teams was and is essential. Obviously evictions don't really stop people moving around, so those had to be curtailed. Then having half the population be insolvent on the way out of the restriction period, that doesn't help either.

Remember, the last time we had a pandemic was 100 years ago, and that killed 3% of the population of Earth. This isn't something that happens every day, and it requires a response that doesn't happen every day.

This tipping of the balance is temporary, as any balance that goes too far in one direction should be.

 

I actually haven't taken a bath on rentals yet (well, I had to lower the rent for an incoming tenant but I had no hesitation in doing so and was more than happy to do so). I also never said I was taking a bath in that area and I've never said I was against LLs giving a discount. You seem to be projecting or confusing what I'm saying. I'm interested in the moral and ethical implications of what's going on and how this could be a slippery slope moving forward.

Where I am taking a bath is on my salary. I've lost 3 months of all my part time work and my partner lost 2 months of salary. That's a big enough hit to make a difference, but not big enough to be life changing (unlike many people who have unfortunately lost their jobs). And some of my PT work will probably never start up again. It is what it is though and to be expected. I'm getting off much better than others.

You say the LL didn't cooperate but they offered a discount and asked for it to be paid back at a later date. Those terms were rejected by the tenant and therefore they were the ones who took it to tribunal. In fact the LL got 30 percent instead of the 25 the tenant was offering.

Actually I didn't stop reading. I did afford you the courtesy to read everything you wrote. I did notice that, but it didn't fit my narrative! haha. But in my defence, for you to continue to assume that all LLs have bank loans is small issue. there are many retirees who rely on rent as their sole income to survive and they don't have bank loans. It's really a hot mess. I think the govt (surprisingly) has taken many good albeit a little late steps and a few missteps. To be expected though.

And nah, it's not rubbish. The sentiments that I'm hearing a lot recently in western countries are starting to sound like mild commie rubbish. Let's just look at all the examples of the USA and how 1984 is becoming truer every single day.

Let me ask you this, if you're a renter with 50k in the bank, and you lose your job, should you pay your full rent topped up from your savings or do you think it's justified to get your rent reduced? I'm wondering about the mindset of others in regards to these types of situations.

 

It's not a slippery slope. This is the response required for this particular situation. Other situations will, and have done, call for different responses. The governments at most levels are trying to pick out the least bad option. The federal government has failed by not utilising its power to get banks to pick up any of the burden in exchange for the massive injection of cheap/free money.

So they offered a 0% discount then.

I see this trotted out a lot, ignoring that the federal government has removed the asset testing on investment properties (meaning those retirees potentially qualify for Centrelink assistance they normally wouldn't) and that the example case in the Sunshine Coast showed that Queensland at least will consider the financial situation of the lessor and not just the tenant which is a good outcome.

No, it's absolutely rubbish.

The point of savings is to get through rainy days, and if anyone hasn't noticed it's positively pouring. So yes, you should. That said I'd not suggest taking savings below about $2k because if you do end up having to move house, that's going to be essential.

I am absolutely against using superannuation for this purpose though, since the point of superannuation is essentially to reduce pension expenditure for future generations.

 

Not sure about laws in Queensland but every change in VIctoria in last 12 years have favoured the tenant, It's like death by a thousand cuts then this sledge hammer which we all hope is temporary

 

The COVID-19 provisions of Queensland's tenancy law were passed by a piece of subordinate legislation called the "Residential Tenancies and Rooming Accommodation (COVID-19 Emergency Response) Regulation 2020". The important thing to note is that it does not alter the original text of the RTRA Regulation, and as it was passed under the authority of the "COVID-19 Emergency Response Act 2020" it automatically vanishes into oblivion when that act's authority ceases (currently 31 December 2020, or earlier if the state of emergency is withdrawn).

Victoria's were passed under the auspice of the "COVID-19 Omnibus (Emergency Measures) Act 2020" which contains text expiring the authority of each part six months after receiving royal assent, and revoking any regulations issued under each part on that same day.

 

https://reiwa.com.au/about-us/news/wa-rental-market-expected-to-worsen-for-new-tenants/


some stuff for Landlords in WA to think about

 

Forgot to add that there has been an extension of the residential emergency rental laws until April 2021. Good luck with getting an increase in rent.

 

I’ve got a tenant in Western Sydney who moved into the premise on June 1, 2020 at a rate that was well below market now asking for another rent reduction of 23% just 3 months after commencing his lease.

He has also stopped paying and is about 2 weeks behind this Saturday. Trying to nip it in the bud early

 

If he could afford it in June, what's changed? Also, what is the rent $$ he's paying?

 

We've been approached by a few tenants asking for assistance. We ask them to complete a hardship form and probably only 50% come back, the other 50% pay the rent.

We can determine from the application and supporting documents if they meet the criteria and then we discuss further with the owner.

We have recommended reductions for 2 months as that may be all that is needed for the tenant to qualify for assistance from DHHS and get back on their feet.