Tenant Financial Hardship Application

Wow. I had at times wondered before who a pm thought they were actually working for, but that takes the cake. Not only not looking out for the landlords interests who pays them, but not thinking about where their income will come from when they have no rent to collect?

And this isn't even law yet in most states... unbelievable they could make such a statement before it is even law

 

Yes, we were friends before he rented, he had no reference as he previously owned, bankrupted and got the house through me in the first place. He was fine for about 3 years and then this last year started to play up a bit.

Makes me sometimes wonder too.

 

Just one bank statement is inadequate. Nothing stops the tenants from showing you a dormant account with a $0 balance. You'll need at least 3 months from *all* bank accounts. You don't want to make them an offer when they've got $100k in term deposits.

 

Useful resource, thanks for sharing KingBendtner

 

Great approach, thanks for sharing Michael

 

What's this?

 

Saw it somewhere on FB - another PM's page; two examples, first of tenants abusing the system, second of landlord being considerate at their own expense for their tenant.

Pointy end of the stick, the Government has implemented strong welfare protections for Tenants who suffer hardship as a result of COVID19 - JobSeeker payment, JobKeeper Payment, and just released, Rental Grant, as well as the being able to withdraw $10-20k tax-free from Super, and the partners income test has been doubled to just under $80kpa to increase eligibility (have a think about that, your partner could be bringing home just under $80k still, you lose your job, Gov will give you $550-$750pw...)

So if a Tenant doesn't qualify for any of those, they're probably not really in a hardship position, so if they're asking you for a rent reduction or rent deferment with no supporting evidence, I'd say they're probably taking a lend of the situation and you should be weary of this...

 

ASIC now putting property managers on notice re. financial advice (in relation to those REA's & PM's who have been actively encouraging tenants to access their super)

https://download.asic.gov.au/media/...y-release-of-super-state-rei-3-april-2020.pdf

 

@Tyler Durden @Michael Mitchell thanks for this great information guys, keep them coming

 

I've already said why I believe this isn't the best way to approach things so I won't rehash. A lot of the advice was and still is being thrown around before changes are even legislated. I'd sack my PM if she passed some of the inarticulate and unprofessional emails I've seen floating around to any of our tenants. A lot of the advice has been unsolicited and provided to tenants who had no intention of not meeting their obligations.

The irrational behaviour from both tenants and the RE industry and associated lobbyist groups following Morrisons comments has been melodramatic, completely unnecessary and has started outright class warfare at a time when Australian's should be supporting each other. Now empathetic landlords and property managers who do the right thing are all being tarred with the same brush.

If we want the government to embark on one of the biggest social housing programs in history once the country is in recovery mode, then we're going the right way about it.

Populist politics is the new black and the <10% of Australian's with IP's will get thrown under the bus if it means the LNP can stay in power.

 

So you realise that is completely illegal to investigate a tenant and effectively be giving them financial advice through the back door? They have absolutely no obligation to provide any of that information. Not to mention unethical. This is exactly why the government is now clamping down on unscrupulous agents (and landlords) who are crossing the line.

Yeh nope. That doesn't pass the BS test. That is clearly implying that a tenant should take a particular path.

 

Some of the content I have seen on here is completely bonkers and I suspect would be putting both landlord and PM at significant risk. I think people are forgetting this is the single biggest health, and in turn economic event since WW2. Just the idea that things will return to normal in 6-12 months is 'optimistic'. This changes the game across the board and this was always the risk with property investment that it was subject to a large correction such as this. Unfortunate but just reality. In fact, I can't think of a modern correction that this could be compared to. I think landlords will be doing well if they could maintain 75% of the planned income from a property over the next 12 months.

 

It's a difficult situation all round! I don't think ScoMo's leadership and directions on the matter is helpful.

I wonder if this email from my Property Manager would be considered financial advice?

How difficult is it currently to be a Property Manager in this climate? 8 days later, 2 emails from me, one phone call, one text, I still haven't had an update from my Property Manager.

Extract from email 8 days ago. "I am very sorry to inform you that your tenants have contacted us today to advise their income has been negatively impacted as a result of the COVID-19 outbreak. They are very concerned this might in turn inhibit their ability to meet their regular rental payments.

Currently there are no certain directives from the government as to what landlords are expected to do in these uncertain times, however many of the banks have announced that they will be offering to pause mortgage repayments for 6 months. I am of the understanding that Scott Morrison will be announcing clearer guidelines tonight with respect to a rental stimulus package.

I would recommend that you make a phone call to your home loan provider to discuss your options, and contact your landlord insurance provider to ensure you policy is up to date and financial.

I will update you tomorrow once the stimulus package has been (hopefully) announced in more detail so that we can then make a plan moving forward as to how best to overcome this situation. You may wish to consider a rent free period (in this instance I would recommend that the tenants need to provide proof of unemployment), or a reduced rent, however depending on the outcome of the stimulus package this might provide adequate relief that you don’t need to offer either. "

 

ScoMo just announced decison today but to be unveiled Monday

Landlords will be FORCED to give hardship rent reductions. Only hardship. Not just because someone asks.

May need to rfelect the tenancy ie No income may mean nil rent wehere reduced income = reduced rate. Some commercial and all residential.

reported in smh.com.au

This is going to make PM jobs really really hard. Fee for this ?? Or love of retention ?

 

Everyone in the chain is going to take a hit along the way somewhere. This is not BAU. How agents and landlords respond to this could define how they land in the new world - or whether they retain a tenant or are fighting for any rental income in the reformed economy. The real economic hit is 3-6 months away. The idea that people will maintain the status quo through all of this is unrealistic.

 

^ This will be interesting.

A lot of tenants are asking for a rent reduction without even bothering to try the Centrelink support options first.

The expectation vs reality for the test of hardship will be educational for a lot I think - it's not pretty.

 

Are you by any chance from the tenant advocacy or socialist lobby sectors? The first few posts from you relate to the Covid 19 crisis and the tone is for landlord to absorb hardship long term. We seek solutions in the forum being in the same boat. Just wonder where to place your posts.

 

SMH report

Prime Minister Scott Morrison has said he hoped to have a commercial tenancy agreement finalised by the national cabinet on Friday, but indicated it would be delivered next week.

He said the national cabinet had agreed to a mandatory code for commercial landlords and tenants in financial distress.

The mandatory code will apply to tenants where they have a turnover of less than 50 million and are part of the JobKeepers program.

“The turnover reduction of the tenant needs to be reflected in the rental waiver of the landlord,” said Mr Morrison.

Mr Morrison said for businesses that had to shut their doors for three months, the tenants and landlords could agree to extend the lease for three months at the end of the agreement to make up the lost revenue.

“We do not wish to be prescriptive,” he said. “What we want to do is have tenants in the room.”

No word on resi it seems. Landlords with commercial tenancies with the occupant who has ceased operation could be in a hole. The jobkeeper catch is a carrot and stick

 

Nope. None of that. Just someone who has browsed here and decided to respond to some of the nuttiest ideas around. Not employed in property industry. Not a tenant. Although I chair and manage a relatively large owners corporation (we self manage) and a couple of these posts reflect the craziness of the managers I have to deal with some days. I am gainfully employed in a completely separate industry though.

The good PMs are worth their weight in gold. There just isn't enough of them.

The reality is that everyone will need to absorb the pain on this one. Too many posts of landlords/PMs ignoring the human element here. The ones that stick with their "we are king, the tenants live in the houses we provide" mentality on a power trip are about to suffer a rude shock I suspect.