Removing a tenant's arrears

I had an interesting talk to my PM today. A tenant of mine is on Centapay and for some reason a little while back, she started paying fortnightly instead of weekly, and racked up quite an arrears. The PM told me that there is no way the tenant will ever pay the arrears. She continues to pay weekly so the arrears amount is not increasing.

So the PM gave me two options - the first was to terminate her lease - in the middle of winter in Trashmont, I'd say this was a bad idea unless I like the idea of a fire keeping the neighbours warm by the house going up in smoke when vacant. The second option she gave me was to just wipe the slate clean and pretend there was never an arrears. WTF? I asked her what option 3 was. She said she couldn't think of one.

 

Are they paying the correct amount each week/fortnight now? I mean, is the problem getting worse each week, or is the problem just a skipped payment that needs rectifying? These would have different outcomes IMO.

Are you on a fixed or periodic lease? And if fixed, how long is left on it?

Option 1 I've done a few times - usually after sending a letter that basically says the continued arrears will have an effect on the decision to renew, and on the references given to future landlords and agents. This on its own has spurred some people to catch up on their own, or others it doesn't so they can leave and get someone better in.

Option 2 is crazy, needs a slap.

Option 3 is to discuss a payment plan with them, ie pay $x a week until they catch up.

 

Wow! That's some PM.
Maybe find a new one and get them to sort it out. Trust all the docs are in order to perhaps claim it or insurance if ultimately required/possible.

Welfare payments are fortnightly so not sure why center pay would be weekly.

 

yes they are paying the correct amount currently. Centapay was taking out one week's pay every fortnight instead of two weeks' pay every fortnight.

Apparently payment plans were arranged previously and she hasn't paid anything off.

 

Some of mine get weekly payments, as they're on multiple things so get paid the different thing on the odd week.

Ultimatum time then.

 

How much debt racked up before the PM cottoned on?

No doubt the tenant knew they had extra cash available but thought "Bargain! not my prob if they don't do their accounts properly"

Whilst we pay & hope PM's are doing the righty by us, don't you get a fortnightly or monthly statement from them, would have seen the outstanding amount, including in your bank account?

 

Option 3.
Keep the tenant but also keep the arrears on record. Then when the tenant vacates you can claim the bond.
Marg

 

Hiya Beachgurl,
a couple of thoughts..
1.Was the bond paid by Centrelink?
2.Do the agents do freebies for attending bond claim tribunal?
Does this frame your thinking?

 

Can the tenant do some maintenance or repairs which can be paid from the arrears?

 

Not a good idea

 

If the tenant has the capability why not?

In two occasions I have had the whole house internals painted

 

I looked at a place recently that the LL was letting tenant paint.....such a sloppy job I would have been offering 15k less or more due to work and delay to rectify.....

 

Wait another 6 weeks until spring. Then find out WTF is going on with bringing the arrears up to date.

If you are satisfied with the answer, then consider implementing a plan for the tenant to come up to date.

If not, assuming your insurance is up to date, and given your post above, go to Option 1.

 

I like Marg's idea. My sister had an IP in Mt. Austin, it's just as bad of an area and one time when her tenants left she had a 2 month vacancy and had to drop the rent to secure a tenant so the rent actually went backwards over time. So i'd try to keep the tenant for as long as I could in that area.

Re: property manager... I wouldn't expect great property managers in that area.