Should my PM be doing more?

Discussion in 'Property Management' started by Keentolearn77, 8th Apr, 2020.

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  1. ferzal

    ferzal Active Member

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    Unless it's really low... unlikely. The threshold is quite low for maximum rent assistance (as is the amount of rent assistance). Insurance is an issue. I'm a bit flummoxed on that one myself.

    Centrelink is smashed at the moment. They could have registered their intention to claim and are awaiting a Centrelink response. This is the advice the government has given. Currently people are still waiting weeks for callbacks which is to say that they haven't even gotten to stage 1 of about 5 stages. Some patience here is needed.

    Uber is.. well yeah... but they're otherwise getting zero until Centrelink grants and backpays so maybe it's enough to feed themselves.
     
  2. wylie

    wylie Moderator Staff Member

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    I've reduced the rent for one tenant, and he is here in our house right now painting some things that don't really need painting right now, but he needs work.

    The other two tenants I've not heard from, and for now, I'm not getting in touch with them. The rent is continuing to be paid.

    What I don't understand is those who think a tenant should not have to dip into their savings to pay their rent whilst working out how to manage their finances, utilise the government payments on offer, but expect me to dip into my savings to pay my mortgage because they don't pay their rent.

    Yes, I could ask the bank to hold my payments but I'm not being gifted anything except some breathing space. I'll be paying more once the interest compounds. But I'd be thankful anyway to get some time to think and plan.

    I'd ask nothing more from our tenants than that they ask, not demand, that they want reduced rent while they get their finances sorted out. If they ask, we will listen and work with them. If they just demand something, I'll likely start from a different place in the negotiations.

    I also am pretty annoyed with the "all or nothing" approach it seems some tenants are going for. If our tenants came to us and said they'd lost one income, so won't pay any rent at all, I'd have my back up before we even start to have any discussion. That is NOT the way to approach a negotiation.

    For us, if our tenants contact us and say they've lost their jobs, we will talk and come to an arrangement. I would expect that they will tell me they've applied for whatever help they are entitled to. I would hope they won't just expect me to lower my rent whilst they don't bother to apply for the government help on offer.

    I'm tired of all landlords being tarred with the same brush. And I know some people tar renters with the same brush, but I don't see it too much on this forum. Social media has a LOT to answer for in these things.
     
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  3. adprom

    adprom Well-Known Member

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    What they are doing with their centrelink benefits is of no consequence to you or the decisions you make. Nor is it frankly, any of a landlord's business.

    Once again, that is for a tenant to claim and they may have circumstances that could make them ineligible for that. A landlord getting involved in the personal financial affairs of a tenant is over stepping the mark.

    I understand why you are doing it but it is not justified.
     
  4. adprom

    adprom Well-Known Member

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    You realise that quote in red was not from me, but from WA government? Direct copy and paste from their FAQ which I linked.

    Whether a tenant has savings or not (or any other government benefits), is inconsequential to the landlord's decision for hardship.

    A bit like LLs encouraging or asking if tenants have dipped into super.

    This is where the line is being crossed and is unacceptable.
     
  5. Shazz@

    Shazz@ Well-Known Member

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    I don't think you quite understand the art of negotiation. Your idea of a negotiation is to fold and come halfway. That's stupid.

    In a real negotiation, you try and work out what everyone's bottom line is, because without this, you have no negotiation power.

    In Peter's case, he simply can't reduce rent due to insurances etc.. and 50% is ridiculous. He also isn't under any financial constraints where he has to accept a lower amount or sell, and probably could quite easily have this property un-tenanted for some time. He has clearly stated that he just wants to tenants to pay what they can and will work out the rest later. He also knows that the tenants will likely receive some government support which will cover the rent to some degree later on. He is also not caving to demands because he knows the tenants need him more than he needs them.

    On the other hand, the tenants have lost their job and are demanding reduction in rent (50%!!, not even a reasonable reduction , and is not proving how they can even pay this amount). Their bottom line is that they still need somewhere to live and can't move out. So its fair to say, that they should be the ones making a reasonable offer.

    Moral of the story- these tenants are going nowhere fast with their demands.
     
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  6. adprom

    adprom Well-Known Member

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    The tenants are doing this, landlords refusing and tenants basically saying well if you won't budge, neither will we.

    Everyone loses, LL gets nothing, has no prospect of rent for 6 months and will need to find a new tenant, at a lower rate in due course.

    I understand how negotiation works.

    50% of something is better than 0% of everything.
     
  7. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    You're right. What they're doing is none of their business.

    I kind of figured that this was a bit of give and take from both sides. Work together and all that. I guess I'd just like some assurances that they're not simply taking advantage of the current environment to get a freebie at my expense.

    If they're ineligible for assistance, then we'll work out what is possible. So far they haven't indicated this.

    I suppose could take the position that I simply evict them at the first opportunity (might have to wait until October), put them on a blacklist and engage a debt collector to follow up. This probably doesn't help anyone though.
     
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  8. wylie

    wylie Moderator Staff Member

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    Yes. Didn't mean to imply whose words they were. I actually would never ask a tenant for a bank statement. But I would expect any negotiations to include what they are doing to help to pay their rent, reduced or otherwise. To be honest, I'd guess most tenants would offer that information as part of their request.
     
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  9. Simon Hampel

    Simon Hampel Founder Staff Member

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    I think this is a completely reasonable approach, Peter.

    I think the only real choice we'll have is to kick the can down the road until things start to return to normal and then decide on the outcome then.

    We can't possibly know what the situation will be in 6 months time once the moratorium is lifted - so I think it's best to just accrue any outstanding debts and work out how best to handle them at that point.

    It may well be that it will be in the landlord's best interest to try and keep the tenant at all costs - in which case, forgiving some or all of the debt and coming up with a new lease would be best. If the tenant is still not in a position to be able to pay market rent for the area, then they will need to move out and find a new place to live. We won't know what that new reality is until we get there.

    Here is what I'm thinking in broad terms (in the absence of any legislative guidance at this point in time):
    1. inform tenant that you expect rent and other expenses to be paid as per the current lease agreement, but recognise that they won't have the cashflow available to pay immediately - they should continue to pay what they can afford and any outstanding amounts will continue to accrue
    2. inform tenant that you expect them to do all they can to obtain government assistance to help them meet their obligations
    3. communicate with your landlord insurance provider to identify requirements for claims and follow insurer's instructions
    4. if insurance provider instructs you to commence eviction proceedings and that's the only mechanism you'll have to recover lost rent, then start proceedings, recognising that you won't be able to carry out the eviction
    5. allow tenant to break lease if the tenant is unable (or unwilling) to pay rent - vacant property costs less to maintain than a leased property with zero rental income - and you might get a new tenant who can afford to pay
    6. once moratorium on evictions is lifted, re-assess situation and tenant's ability to repay money owed - arrangement could be a combination of payment plan and debt forgiveness, based on landlord insurance payouts, legislative requirements - plus how important it might be for you to keep the tenant (based on rental demand in that area)
    7. if tenant is no longer able to afford to pay market rent at that time (which may be lower than it is now), begin eviction process - they can't stay on for free forever
    This is of course subject to any residential tenancies legislation that is enacted .

    Point #6 is the key one - once the moratorium is lifted, we assess how to proceed based on the following factors:
    • how much the tenant has been able to pay
    • how much they still owe
    • what our landlord insurance provider will pay out
    • what the legislative requirements are
    • what the market rent and vacancy rate is at the time
    • how important it is for us to keep that tenant
    ... and come up with an agreement with the tenant based on a repayment plan, debt forgiveness, or both.
     
  10. abc_123

    abc_123 Well-Known Member

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    Yes, whilst I feel that it is probably not in any landlord's interests to agree to formal rent reduction or waiver etc at this time, it doesn't mean we are going to pursue a good tenant for money they can't pay after the end of 6 months where the tenant acted in good faith - some assurance to a tenant that just because we aren't agreeing to anything in writing doesn't mean we are going to immediately turf them out and send them to a debt collector at the end of this would surely be ok for insurance and legal purposes.
     
  11. ferzal

    ferzal Active Member

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    If you're having a reasonable and open conversation with your tenants I think they should disclose that they're trying to get Centrelink payments (awaiting this huge backlog perhaps) or that they're ineligible. It is a private thing though and there is still a stigma associated with it. Hopefully that stigma is dropped quicksmart during this pandemic and people feel they can discuss it more openly because it would definitely help your discussions if they were forthcoming with more details. You're not asking for a hardship form after all (I cannot abide by those).

    If you're being reasonable in these absurd times I think they can offer up a little extra info even if it is a little embarrassing (it shouldn't be but that's the stigma we've created over the years and it persists even during a pandemic).
     
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  12. thatbum

    thatbum Well-Known Member

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    Lol. That's not how a negotiation works. Why the hell would they meet in the middle if Party A has no legal basis to ask for the thing and party B is legally entitled to stand on their position?

    Are you going to negotiate with me and give me $50 when I send you a letter asking for $100?

    I take EFT or cheque btw.
     
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  13. rhinsor

    rhinsor Well-Known Member

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    Lots of "should" statements on the consumer FAQ.

    @thatbum whats your legal thought on "should" in tenancy laws in W.A?
     
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  14. thatbum

    thatbum Well-Known Member

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    Law hasn't changed in WA, and the inside word from my sources are that its not likely to for quite a few weeks.

    Its really business as usual mostly. The FAQ doesn't seem add much to anything from what I can tell.
     
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  15. ferzal

    ferzal Active Member

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    The Consumer Protection site (sounds like an advocacy group - gotta love government naming) has advice in line with the inevitable eviction moratorium. Their advice is to act as though it's in place and they even go into details on what you can and can't ask from tenants to prove hardship. Your magistrates court (which is, unbelievably mostly operating in many areas as normal to my surprise) says nothing at this point but I'm not sure their FAQ should - it's about process, generally.

    They're currently working on amending legislation to reflect this advice according to Consumer Protection. So... sounds about as messy as everywhere. I don't know what advice might have been slipped under the door of the magistrates court but I suspect that 30 day hardship clause will come in handy while they get their ducks in a row. Anything already in motion that cannot be stopped by legislation should be ok everywhere because, by the simple consideration of time, the breaches must have occurred outside this period of crisis. That is to say, those tenants weren't paying their rent before coronavirus started killing jobs.

    For current cases it sounds like a waste of time, and a little dodgy, to pursue eviction given that it takes, what, 5 weeks + 1 month hardship rule to get tenants out. If they're not paying due to hardship as a result of the pandemic do you really think it's going to be business as usual? WA Government is advising the opposite and they make it sound unlikely that they expect this to take long to amend.

    WA Government advice to tenants and Landlords is roughly the same as everywhere else. And the legislation, like everywhere else, is lacking (apart from NSW where it's in place but not active!) It's all so clear.. like mountain stream mud.

    I was talking to a colleague today (WA expat) who mentioned a lot of the above so it wasn't hard to find and have a quick glance.
     
  16. thatbum

    thatbum Well-Known Member

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    I'm not sure what you're trying to say in this long post. Do I need to repeat myself?

    Its business as usual. Laws haven't changed. Court procedures haven't changed for residential tenancy matters.

    Its not "waste of time" or "a little dodgy" to pursue eviction if you have grounds and want to in WA. I'd probably be professionally negligent if I peddled that sort of advice - so maybe you shouldn't do it either.
     
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  17. ferzal

    ferzal Active Member

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    I'm saying that WA government advice conflicts with yours. Just pointing it out... It's in black and white (or whatever their colour scheme is).

    Absolutely true. Yet government advice has. It's brilliant. That's what I'm trying to get at.

    I was quoting Western Australian government advice firstly and going from there. Are you saying you're going to advise clients, at this point onward, that if people aren't paying rent due to hardship caused by coronavirus that it's "business as usual"? Personally, I would question that.

    It's fine to disagree but it's at odds with WA department advice and I'd simply ask this: Do you think you can start an eviction from scratch, right now, and get through the 6-8+ weeks (depending on what stage you step in) it'd likely take for the eviction to stick before the laws are in place?

    If not then it's a waste of time...

    My main point, however, rather than trying to prod the bees nest, was to point out that WA is the same as everywhere else with government advice and legislation: mismatched and muddy. Did you read the government advice? It should be taken into consideration surely. To not do so would be, dare I say, negligent. (I shouldn't have to put this here but it's text so.... j/k). Let's lighten up.

    I'm on everyone's side, including yours, believe it or not. I think this whole thing is a mismanaged mess for all parties.