Tenant 5 weeks behind in rent - do I have to accept the "repayment plan"?

[AnnyS]

My tenant is on an expired lease and is 5 weeks behind in his rent (we are in NSW). This amounts to $2800. He has been served a termination notice, the deadline for compliance being the end of this month. However, of his own accord, he has been paying an "extra" $100 per week to pay down the arrears. At this rate it would take him 7 months to pay off the amount, assuming he doesn't fall further behind in the meantime. I have not agreed to this repayment plan, in writing or otherwise. My PM advised me that the tenant is aware I have not agreed, however keeps on making the extra $100 repayment.

My PM is of the view that the CTTT will find in favour of my tenant ie because there is evidence that he is "making an effort" in repaying the arrears and he has a family etc. In other words, I will be stuck funding this arrears amount for at least the next 7 months, and also stuck with this problem tenant? Beyond this, he has not offered any advice/feedback on how to deal with the situation.

Would really appreciate any advice on how I can evict this tenant and recover the arrears amount. (btw, I have landlord insurance).

Thanks for your help.

 

[depreciator]

If it goes to the CCCT they will probably decide that the arrears need to be made up by payments of $10 per week or something.

 

[chilliblue]

I think that the terms are fair. He should never have fallen that far behind.

If you agree to the terms, my questions are:

1. Will he still be under a fixed term lease at the end of the payment plan?

2. What will occur should he miss a payment?

3. Is the tenant looking after the property?

Also, confirm the amount that you have as a rental bond.

 

[tobe]

Id start by reading the relevant legislation. Then I would replace the property manager if it seems they havent been doing the right thing.

When tenants fall behind, the agent should issue a breech notice, or something of that kind. Was that done? What was the remedy? usually this first notice happens when the tenant is 2 weeks behind, so if yours is 5 weeks behind, the agent hasnt done the right thing?

As to whether you have to accept the repayment plan, yes, if its court ordered. In future stay on top of the property manager and breech the tenant as soon as legally possible if they dont stick to terms.

 

[Peter_Tersteeg]

I hate to say it, but you're probably getting a better deal out of this arrangement than most landlords. It doesn't appear that you have to accept this repayment plan, but it's probably as good as you can ever expect to get.

If the tenant falls behind again, get on it immediately and follow the appropriate legslation and proceedures. If you do have to evict, you should except that you'll never see the money from the tenant.

 

[Scott No Mates]

If the tenant keeps up their repayment schedule, would you still get rid of them?

Taking on board that the tenant will be paying $100/wk, how long will it take to pay down to the amount of bond that you're holding?

As the tenant is on hold-over, once you have sufficient bond to cover the arrears issue a no-cause termination notice. Unfortunately the risk is that the tenants then stop paying the extra & or the rent, leaving you out of pocket again.

 

[Peterw]

It’s always difficult to comment when one does not always know the full story. Why did he fall behind. We recently had a situation where a tenant lost their job, and were effectively living off savings. Have now found work, and are on a payment plan. While it is not ideal, but perhaps a better outcome than we might otherwise have gotten. I do believe that every time we have been to QCAT, they do accept payment plans when offered by tenants, together with the story on how the arrears happened, and how they will remedy them. The question as to what to do after the fixed term has expired is a different one. Hop onto the XCAT websites, and read some of the decisions, when tenants have complained that a termination of a tenancy was vindictive.

 

[jenni_nextplace]

You should still follow the process, regardless if the tenant will be favoured. This is because the judge will at the least make a formal agreement with the tenant and if they fail to meet this agreement then you will be able to head back to court for an eviction. Always also keep in mind that your insurer may or not want you to go to court for this. Sometimes they don't because if the court says the tenant only has to repay $2 its not in the insurers favour

Another thing to think about is are they looking after the property, if you can go to court with evidence also that they are not its another point in your favor.

 

[BeYourOwnAgent]

Depends on the tenants ability to enter a repayment plan. The tribunal member will take their earnings into account, as well as hardship and other mitigating factors.

The times we had this at my old agency, the tenant was always awarded a small weekly repayment plan; it's a joke to be honest, but nothing you can do.

 

[AnnyS]

Thanks everyone.

So if I'm understanding correctly, the risk with going to the CTTT is that the mandated repayment plan could end up less than $100 per week? And the risk of pressing for an eviction is that the $2800 doesn't get repaid at all?

chilliblue - I do not intend to offer the tenant a new lease after the arrears are repaid. Since they are not a very good credit risk I would like to get new tenants in after this is resolved, and change agents. The last time I did an inspection the house was in acceptable shape, but the gardens and pool are not looked after at all. I am constantly getting complaints from the council about the garden. I suspect the bond would only just cover getting the gardens and pool back into shape.

tobe - the PM states that he has constantly been chasing up the arrears, but I am not sure whether a formal breach notice was issued after 2 weeks.

 

[BeYourOwnAgent]

Thanks everyone.

So if I'm understanding correctly, the risk with going to the CTTT is that the mandated repayment plan could end up less than $100 per week? And the risk of pressing for an eviction is that the $2800 doesn't get repaid at all?

chilliblue - I do not intend to offer the tenant a new lease after the arrears are repaid. Since they are not a very good credit risk I would like to get new tenants in after this is resolved, and change agents. The last time I did an inspection the house was in acceptable shape, but the gardens and pool are not looked after at all. I am constantly getting complaints from the council about the garden. I suspect the bond would only just cover getting the gardens and pool back into shape.

tobe - the PM states that he has constantly been chasing up the arrears, but I am not sure whether a formal breach notice was issued after 2 weeks.

If the PM has been chasing up the arrears, ask for evidence - you'll need it at tribunal, and it would also be good for you to know how they have chased

We used to send SMS, emails, registered post; definite trail of communication attempts.

If they haven't, approach the agency principal with your dissatisfaction.

 

[zepth]

if the tenant is on an expired lease you could just give a notice to vacate without reason although you need to give 90 days for that and there is the possibility the tenant will just decide to stop paying altogether in response....

 

[nhg]

If it waa me, id keep them. Theres a lot of costs involved with kicking a tenant out. At least this way you get it all eventually.

As stated above. If it goes to court. High chance tbings will end in tenants favor.

I usually give tenants one chance to redeem themselves.

 

[LeeU]

My tenant is on an expired lease and is 5 weeks behind in his rent (we are in NSW). This amounts to $2800. He has been served a termination notice, the deadline for compliance being the end of this month. However, of his own accord, he has been paying an "extra" $100 per week to pay down the arrears. At this rate it would take him 7 months to pay off the amount, assuming he doesn't fall further behind in the meantime. I have not agreed to this repayment plan, in writing or otherwise. My PM advised me that the tenant is aware I have not agreed, however keeps on making the extra $100 repayment.

My PM is of the view that the CTTT will find in favour of my tenant ie because there is evidence that he is "making an effort" in repaying the arrears and he has a family etc. In other words, I will be stuck funding this arrears amount for at least the next 7 months, and also stuck with this problem tenant? Beyond this, he has not offered any advice/feedback on how to deal with the situation.

Would really appreciate any advice on how I can evict this tenant and recover the arrears amount. (btw, I have landlord insurance).

Thanks for your help.

You should go the CTTT under section 88 RTA for non-payment of rent. If the tenant is stating that he will pay an additional $100 a week to catch up then get that in writing and have the CTTT grant specific orders that he follows the payment according otherwise you have the right for eviction. It'll put you in a much stronger position legally.

I have a feeling your PM doesn't want to do the extra work of taking this action or not all that confident of their ability at the CTTT.

Cheers
Lee