Non paying tenant - It's started.

If you honestly think someone is doing that and is not in hardship, then you can take them to QCAT - just as you could today to evict them. People living in your property and refusing to leave is always a risk.

It is not about being a greedy landlord.

My concern is that this may be required much longer than 6 months. Things could get very rocky.

 

I don't see too many on here advocating the eviction of a tenant. They are explaining that a better system needs to be put in place so that this one way traffic of non payment of rent even when the tenant may have savings does not gather any momentum. I blame the prime Minister for this fiasco, firstly for floating the idea in the first place, secondly for not explaining it properly and thirdly for not sorting it out once he and his cabinet knew there were going to be issues. His feeble attempt to promulgate the idea that tenants and landlords should "sit down and talk it out" is absolutely laughable. I am trying to think of any other Prime minister who has made such a mess of a particular situation.

 

1 Million people are already without jobs... the momentum boat already sailed.

There was no sorting this out (whether you like PM or not - personally I am not a fan). I honestly don't know what else you can do except buy time while trying to figure out how to resurrect the economy. The alternative - pay everyone who lost their jobs 80% of their salary? Don't like that option much either.

 

This. It's a legal matter.

 

I think the 80% was a copy from NZ directly related after the cabinet came under a heavy barrage of criticism for their initial offering which wasn't much. The cabinet just have not got enough in the tank to come up with a better answer than letting people sort out financial matters between themselves especially with a stranger ( the tenant) who cant lose. And what's worse the Landlord has to go up against the bank. Disgraceful

 

That concern is reasonable. I think there is going to be an issue with people not paying for things generally. Property is just one that is first jumped to. Obviously you can't have landlords unpaid forever.

Not sure I have seen any articles advocating that the average renter just doesn't pay though. If I was a renter I would be thinking two things If I was gainfully employed and safe....
1. I would want to be known as a reliable renter and keep paying - additional purchasing power
2. In the future market, I would be looking for a better rental deal.

I suspect an adjustment of the property market (or any market) is impossible to avoid. I saw a post where one PM was grumpy a competing agent offered tenant immediate 30% off current rental and covered them blowing their deposit on the new rental. I suspect the market has shifted to one where LLs and PMs will want to prioritise keeping properties occupied and getting some income and minimising losses.

Give it a little time - I suspect the current tenant protection which was to address short term risk of evictions will have to flow through the landlords with banks somewhat. Simply cannot have banks calling in all these loans (otherwise why bother protecting tenants? Bank would just kick them out anyway).

The COIVID-19 situation is an almighty mess.

 

It doesn't matter what you think. We have a legal system built around contract law. When leases across the nation can become unenforceable anytime things are hard, it's a problem. Politically, this isn't going away. Credit sleeving of leases by banks could become an option. Not unlike contracts in other markets. The willingness of landlords to pay say 5% for credit support might be there after this.

 

It is a significant risk that has been known forever when investing in property - that this sort of event could be catastrophic. The alternative is that hordes are kicked to the curb? That won't have good outcomes.

In these situations there are no winners, simply trying to be as fair as possible having everyone lose equally.

 

I can't work out if you are serious or not. I'm leaning to the latter.

Most people won't be 'kicked to the curb' as they will be protected by a very generous and ever expanding safety net. Most people who lose their jobs will receive a Jobseeker payment of $550 p.w plus rental assistance and family tax benefits. Many workers' jobs will be protected by the Jobkeeper subsidy and even if employers can't or won't top this up they will receive $750 p.w.

Surely you can imagine that swathes of unscrupulous tenants who might take advantage of the Prime Minister's ambiguous messaging and refuse to pay rent despite welfare payments that will secure most of them and allow most of them to live and continue to pay their current rents.

I'm sure this ambiguity will, to a degree, subside when the states reveal the detail of how all this will work in practice for residential tenancies. However, there will undeniably be a cohort of tenants who won't be attuned to these nuances and will elect to squat without fear of eviction over the next 6 months.

 

It depends - that does capture a number of people but there is no shortage of people who are on unpaid leave, less hours or in any number of situations where that does not capture them. Govt support would also not be at the level of what these people had as an income originally.

That would be a very short term view of those tenants. That approach would not put them on the good tenant lists. We are now talking game theory here and you would expect that the vast majority would want to be able to safely rent beyond 6 months. Also, I do not see that the moratorium absolves the renter of the payment obligations (not to mention - you would assume they would have a 4-6 week bond).

I understand the fear from LLs, but if you look at it from the other perspective, effectively squatting doesn't end in good outcomes for the tenant either (if they have any intelligence).

I do see a LOT of rental renegotiating going on from here though.

 

Yes but it will be enough for most without having to refusing to pay their rent or ask for an unreasonable rental reduction despite this and their living expenses being heavily subsidised by the government. As a landlord I enter this period in good faith but talk of a 'rental strike' is not not appropriate. The same people calling for a rental strike are the same people who would be outraged by wage theft but they are ok with rent theft. What about those whose income is derived from rental income?

Methinks you overestimate the probity of a not insignificant section of the populace, especially at the lower end of the rental market.

Negotiation is entirely appropriate; but only where it is needed.

 

To early to tell and it depends on the market. I’m willing to help out anyone in genuine distress but in Qld at least there are now suitable safety nets for those renting properties at the lower to medium range of the market.
I have got a decent sample size of tenants in several states and both regional and capital city markets, all are currently up to date with rental payments. One tenant owns a restaurant so I think he might be in a bit of trouble , I will help out by offering a few weeks rent free if asked until the safety net kicks in. The property rents for $350 per week, affordable just, with the current safety net in place.

I’m not particularly worried about rents, there are bigger issues at present but I am concerned by the rhetoric coming from Canberra that no tenant can be evicted...

I have been taken to the cleaner too many times with malicious damage, fraud and ‘rental holidays’ to accept such a policy.

 

Let me try apply your logic...

When you get a job, one of the risks is your employer dogs you and refuses to pay your redundancy or your annual leave and bankrupts the company to avoid obligations, especially in this environment. In the meantime, Fair Work Commission is shut down because you know, we can’t have more than 2 people in one space.

So if we have no sympathy for landlords, we should have no sympathy for employees who get screwed over.

Oh and if you don’t want to take the risk, don’t get a job hehehe. After all if you want to earn money, there’ll be risk right?

 

I never mentioned any of those scenarios, there are infinite possibilities and every case will be different which as mature adults the PM, LL and T can all work out as in 90% of cases happens. Difference this time is there's a lot more pressure.

What I have found in life if I continually think and focus on an event to happen it increases the odds of that occurring..

Worse case scenario is the land taxes, council taxes etc are put on ice like repayments and you can pay them later with no interest. I reckon you will get by.

I am sure tenants aren't going to just stop paying completely and live in the property investment for 6 months. The laws aren't going to change as much as people are thinking. Morrison loves to get headlines, he probably will change the law minimally in the end and is using it as a diversion tactic and to keep those who have lost their jobs at ease.

 

Poor logic my friend.
A job is a job. And yes unfortunately, sometimes a business goes bankrupt and through just bad timing, management or nefarious financial games the employee gets little or nothing. Happens every day in this country.
Property investment is an investment. It is just like a piece of equipment, an enterprise etc. Main difference is it's someone's home. In a free market economy when there's a collapse the prices drop significantly just as businesses do. Rents and property values are going to drop significantly this year, we are a free market capitalist economy.
A lot of businesses are going to go bankrupt, 90% of the general market rates will drop. It is unfortunately going to be a lot worse than GFC, late 80s and early 90's recessions. Not as bad as the Great Depression but it's going to be ugly, no two ways about it.
The sooner you deal with that and accept it the better.

 

Usually there is no support if you are an employee of a company that goes bankrupt. In this case, the government is doing what they have to do, to keep society ticking over (such as a moratorium on evictions to stop outright crisis). It is simply delaying the problem to prevent immediate crisis.

However, as a landlord the risk of a tenant not paying, leaving, property not being rented out is always a significant risk and has been one. One which is well known when someone invests in property. It is an inherent risk in this type of investment. Just as someone who invests shares in property, has no protection if that company goes under (think any of the major insolvencies in the last 20 years). The investment has a definite known risk.

You don't get to claim the benefits of a free market economy - actively trying to capitalise on it literally and then cry poor me when that known risk eventuates. That is simply a business risk when you invested.

For some reason property investment attracts this mentality like yours more than any other type of investment. I don't get it. However I have always said property investment is much riskier than the average property investor thinks with lower rate of return when you consider the amount of effort.

Investors never really get sympathy regardless of the type. Just like someone who has lost 30% of their stock portfolio right now is not a priority over someone who is simply trying to feed themselves and stay safe.

This pretty well nails it.

Property investors don't deserve sympathy any more than any other type of investor. It was knowingly entering a game with an attempt to make money but taking a risk to do so. That is not equivalent priority (or even close to) to someones' base survival.

 

You’re using self-serving labels to distinguish the two.

A job is an investment. So is your education, where you invest in yourself. To label property as an investment (and therefore it’s ok to lose money) and a job as something else (therefore it’s not ok to be screwed) is just a selective use of words.

 

Too long but I’ll say two things

A) yes property investors don’t get sympathy if they lose money, same way employees don’t as I mentioned earlier. The economy is the economy. Tough luck

B) of course I don’t get to claim the benefits of a free market when a government intervenes. You realise government intervention is the opposing hallmark of free market theory right?