Pensioner tenant behind in rent

A friend of mine has self-managed a Victorian IP - badly. The tenant is an age pensioner who now and again does not pay the rent, and owes a significant amount of money since January 2016. A PM will finally be appointed tomorrow. The PM will be chasing the overdue rent, and if that fails, the tenant will be evicted.

My understanding is that age pensioners can get a $500 cash advance, to be repaid over six months. I have two people advising me. The first says that a court order can instruct Centrelink to repay the rent. much like a cash advance. It will take time but as long as the tenant is alive the LL gets the rent. The second says that courts will generally not make such orders. If the latter applies, what remedies can we pursue?

The PM will get a percentage of the rent from tomorrow, probably 7-8%. The back rent as a result of a court order seems not to come under the LL-PM agreement. The PM will not be doing much about the court case apart from guiding my friend through the procedures. Alternatively, the PM may be able to have the back rent repaid, and if so, will this come under the LL-PM agreement, incurring 7-8%?

Advice regarding the above would be valued. TIA.

 

Generally speaking any rent received by the PM will be charged the management fee agreed. Regardless of what period this is for.

VCAT can make an order that the tenant must pay back rent (payment plan or otherwise) but Centrelink doesn't typically get involved just because an order is made.

Centrelink does offer a cash advance, but from memory this is only once a year or so and isn't specifically for rent.

Tenant can take a VCAT order to DHS, Centrelink and any number of charities and will likely be able to find a way to get them to pay any overdue rent. There's plenty of help out there and it's surprising to me just how many places are willing to give out free money.

PM should be going to VCAT for possession and rent (if tenant is more than 14 days' in arrears), VCAT may not grant possession depending on how they're feeling at the time - in which case PM should request payment plan (that is reasonable, not a stupid $5pw thing - so they should work this out in advance). If tenant is in breach of the payment arrangement they can immediately apply to VCAT again for possession and not need to wait around for weeks.

 

Thanks. The cash advance example was to show that a repayment for rent is similar to the cash advance.

The LL and I can manage most of the VCAT aspects. If the order is that Centrelink pay the LL a set amount, say $100 a fortnight for a fixed number of fortnights, then there's not a lot that Centrelink can do. We can also ask that the rent be part of the order, paid to the PM. This way the current rent is assured.

Possession is not sought as there are some works that need to be done, will take a few months due to Christmas-NY break. After that then possession is a very real option.

 

Sorry, but I am a little confused with the detail in your original post. Does the tenant (pensioner) owe rent from January 2016 or do they owe approximately the amount of the Cash Advance you mentioned? What is the weekly rent amount? Are they going to be able to come up with the amount owed?

 

The cash advance was simply an example to show that Centrelink has provision for this and a repayment system. Hence, a similar repayment system could be set up for the rent owed.

Starting in early 2016 he missed rent here and there, and the LL did not follow this up. It was only when I audited the books that I found that the shortfall was big - $4000. Rent is $250/week. The tenant will not pay so the only option is to appoint a PM to get a higher chance of regular payments - a PM will not take any guff from the tenant - and then next year think about recovery. If we can get $50/week from Centrelink then it will take 80 weeks. All the tenant has to do is stay alive for that long so we get the dollars from Centrelink. The tenant has a gambling problem and cannot budget.

 

Gotcha, thanks for clarifying. Will be interesting to hear the outcome to this. Please keep us informed.

Cheers.

 

Hang on, you're wanting an order that Centrelink pay the money directly to your friend?

I've never heard of a court willing to make such an order. It also appears to me that your friend is about 3 court processes away from that even being a legal possibility.

Before you can get a judgement sum, you need to terminate the tenancy.

Secondly, you can't get that sort of payment order as a judgement sum - it would only be an order that the tenant owes the LL the money - no specifics on how its paid.

Lastly, in theory, an enforcement order could be made after some sort of enforcement application is made on a judgement sum - but I seriously doubt it in the case of centrelink being the only income.

 

Show some compassion. People from this pensioner'a generation most likely fought in WWII to give your generation freedom!

 

So surely all of the subsequent generations should show their gratitude to him rather than just one LL..... perhaps via a subsidy or something, paid via taxes?

Oh wait....

 

of which over 50% of it goes to rent.

This generation have no super either.

 

Not sure what your point is, sorry. Do you think that one individual Landlord should subsidise this person, instead of everyone in all subsequent generations?

Hypothetical - What if the Landlord was also a WWII vet.... would you still believe he should subsidise this other WWII vet who hasn't kept up with his rental payment obligations?

 

Why don't you take the pensioner in then? You could just not charge him rent at all and it'd make you feel really good. In the meantime, the rest of us will be over here INVESTING!

 

Rhetorical question, I hope. A WWII veteran would give his spare room to another veteran!

 

I would if I had a spare room. Do you have a spare room? I'll pay the rent if you let them live in your spare room.

 

$4000 and growing from a tenant on Centrelink, does not sound favourable to recover the debt. it needs to be sorted and I wish you luck.
a good lesson for all to nip these things in the bud before they escalate.
I feel sorry for your friend self managing and getting in this situation. gambling non-paying tenants of any age or income probably best managed by those who can support their complex needs.

 

I don't understand why you think you can get anything out of centrelink without the agreement of the pensioner.

$50 pw is a lot to someone on the pension. Perhaps they can't afford $250 pw rent??

 

Nope. And I'd never let someone with a gambling problem live with me anyway. I'm sure he's also behind on bills as well. I don't need that headache. I'm going through a divorce at the moment, so I've already lost enough, no way I'm going to give more to a stranger that isn't trying to help themselves.

But if you were going to pay for a spare room at my place, why wouldn't you just pay the $250pw he currently pays now?

 

And if the landlord doesn't live in the same city as the delinquent tenant?

 

Now this pensioner is being accused of having a gambling problem... not everything in life is about money.

$4k should be nothing but a blip on the radar here for wealthy landlords.

 

You are confusing an advance payment with Centrepay.

Google centrepay.... that is where the person voluntarily sets up a deduction out of their payments for private expenses. E.g. rent utilities and court fines. The keyword is voluntary...