Tenant Financial Hardship Application

My opinion of course (I am sure a lot of PMs are consulting lawyers right now).

One I don't know... if a PM was to give a tenant advice on how to obtain access to fee relief services for utilities etc, does that constitute advice? PMs tend to have some negotiation skills and dealing with contractors. Using them to educate and help tenants access and negotiate with their providers - I wonder if that is crossing a line?

Sending out a newsletter suggesting how to access super is clearly out. Sending out a newsletter to tenants with advice of how to negotiate with electricty, water, services?

 

I personally don't know as I have never had any insight into AFSL stuff. I work predominantly in property management, but have always wondered how Sales Agents get away with saying "this property is a great investment" and stuff like that.

I've not come across any fee relief services for utilities, the typical thing sort of in that space you see is the likes of "Direct Connect" and other businesses like that, but they are a concierge service as opposed to fee-relief or discount. What would be an example of fee-relief you're talking about?

 

Why not just say S.T.G.A( subject to governement approval) and then you can lie your butt off

 

So here's one - what if a REA simply provides a link to the ATO for support options: COVID-19

Which if you go to the page on Individuals, it explains the Super option... all the REA is doing is linking to the ATO COVID-19 relief options in that instance.

Would that constitute financial advice or are you simply linking to a government supplied info page (which basically says some of the same things)?

 

When I take on a tenant, I check employment to see if they can pay.
So what's the difference with checking to see if they can NOT pay (hardship)?

 

They chose to provide that information prior to accepting as part of the negotiation process. There was no implied right to supplying additional information later.

In this case, if you don't like them claiming hardship - you can go to QCAT/VCAT etc. Although you would want to have a good case. The government has already made a call on evictions.

However even more than that, the form I saw at the start of this thread is just ridiculous. To think that because you are a landlord you are entitled to that level of info because someone has said they are in a rough spot (especially in a known disaster) is just insane.

Landlords and property managers do themselves and the property industry no favours when they behave poorly like this.

 

well, if thats the case, then they shouldnt be renegotiating or requesting changes to their agreement later,

you seem to be as selective as humanely possible in trying to prove your point,

its like talking to an antivaccer

 

If I was a tenant, I would be immediately seeking to renegotiate over the coming months regardless with the sudden drop in rental prices. The market has just taken a nose dive. If the LL/PM had a policy of no rent reductions, I would be looking for a good value vacant rental.

This is the market that property investors signed up for and wanted when it suited them. Can't complain when it works the other way.

 

and let me guess, you believe youre entitled to a break lease fee exemption as well

 

I am critical of landlords who are not doing the right thing and think they are entitled to all sorts of information which they are not.

I know some great landlords who look after their tenants and accordingly their tenants are good and pay. However none of the behave like this. I also know a couple who do reflect the behaviour above and virtually dehumanise tenants. As an OC Manager and chair, these LLs cause no end of issues because everything they get involved in is only as important as "their investment" forgetting this is a place where people live and there is a community as well as that. I spend a lot of my time balancing out the various drivers of different stakeholders from a neutral, and usually sedentary position.

 

How are you going to handle owners who just say that they're not in a position to pay their next levy notice and won't provide anything to justify their claim?

 

We talk to all our owners. As I said, we will likely have a drop in fees anyway previous years of work.

An Owners Corp isn't an investment - it is a business set up to maintain common property and provide insurance so therefore those costs must be covered. We have already done absolutely everything possible to negotiate insurance down and drop maintenance costs to the absolute bare minimum to have the minimum financial obligation on owners.

Owners who don't pay, will go through the legal process as we have been before. If they talk to us even though the act strictly doesn't allow payment plans... we will put something in place.

 

Not sure if this has been covered here but I think a simple solution would be:

1. Tenant pays full rent regardless of immediate financial position- tenant should get govt funding within 2 weeks of losing his/her job. This funding is a known amount.
2. Landlord accepts full rent as per normal until end of lease
3. Tenant lease cannot be broken unless with the approval of the Landlord as per standard agreement
4. PM and landlord to have no impact on the tenants financial position- this is between the Govt and the tenant. This means no discussion, financial advice or bargaining to be had with the tenant regarding a drop in rent or rent rent waiver of any kind.
5. Tenant can be evicted at the end of the lease if it is found that there is cheaper accommodation which they can afford. Previous payments from the govt to them should reflect the tenants ability to pay via a means test.
6. Landlord can allow an extra person to move into the accommodation, this is with the express purpose of the landlord receiving full rent.
7. Landlord cannot increase rent as per rental agreement.
8. If a landlord wants to let the tenant reduce his/her weekly rent- this decision is theirs.

Note how simple this is;

It is for residential only.
All tenancy codes in all states should be adjusted to reflect this. Codes to be reviewed in 6 months or whenever the govt decides that the virus is under control and lockdowns etc are removed.

 

Here's how I would handle it as a lessor if the moratorium came in.

1. Not offer rent reductions initially.
2. Offer as much rent deferral as the tenant would like.
3. Not bother with asking for any proof of hardship.
4. Assess at the end, offering rent waivers or partial waivers once I knew the whole picture.

Done. Honestly, it can be as easy as that. I don't know why there's so much difficulty for both lessors and tenants right now in deciding what to do. There's really not that many decisions to make, and they aren't that hard.

I feel like I need to make my own sticky post or something as a guide for lessors (and tenants really).

 

Whilst I would agree mostly with your post. It remains to be seen if any agreement to a rent deferral would be seen by the landlord insurers as voiding any potential claims entirely. My insurer will not provide any position at this stage.

Now I would hope the landlord insurers would not expect us to act like jerks, trying to harrass tenants for money they don't have, when we cannot do much to enforce payment anyway, and would allow us to agree with tenants to pay what they could afford to for the time being and we will be understanding and not hassle them. The landlord insurers should be expected to come to the party too on this, by government to share the pain too.

 

The deferral would have no legal effect because a lessor can't do anything about it anyway.

This is what I mean - there's literally no decision to make here.

Plus there's no point making out landlord insurers on any sort of pedestal - they are bound by their contract terms which can be read if you want to know what they can and can't do.

 

^ Pretty much the conclusion I came to with the breach process continuing despite having no effect under the eviction moratorium simply to appease the insurers and we explain this to the Tenant so they don't stress:

• No rent reductions – if the amenity has not been reduced then the rent does not get reduced
  
  
• No rent abatements – if the amenity has not been reduced for a period then a reduction for said period does not apply
  
  
• No evictions as a result of hardship from COVID19, in this regard rent can be deferred and will not affect your rental reference
  
  
• The balance owing under the lease agreement will be due and payable whether in line with the agreement or at a future date
  
  
• You may apply to QCAT under hardship grounds to terminate your tenancy if you are suffering hardship and want to leave
  
  
• Breach process for rental arrears will still continue – this is to satisfy the Landlord Insurance Policy requirement to protect the Lessor’s interest, however these will not adversely affect your rental reference if the arrears are paid back at a later stage as mentioned above
  

 

That's actually spot on and summed it up in one. There is very much a wait and see and no decisions to be made. Everything is up for renegotiation at some point. The pause button has effectively been hit while everyone figures out how to work it out later.

 

The saving grace is the Government actually putting some pretty hefty (if accessed in large) welfare in place to keep the ship a float - just need the Tenants to try and access it and all good.*

**and just to clarify, not the Lessor/Agent giving advice that may be construed as financial, simply a comment on the fact I have actually had some Tenants enquire about a rent reduction but not yet bothered to see if they are first eligible for the assistance packages from the Government which would pay their rent in full...