Prushka, one of Australia's largest debt recovery agencies, claims there has been a 30% increase in residential rental defaults over the past six months.
According to Prushka chief executive Roger Mendelson, the number of landlords seeking assistance with claiming unpaid rent from tenants is reaching record levels.
Mendelson says the majority of referrals to Prushka come through real estate agents who manage residential properties. However, the number of claims from landlords who manage their own properties has also increased significantly.
“We receive several inquiries each week from landlords, and the problem will only worsen with the increasing residential vacancy rate,” he says.
“People who have bought investment properties are now facing almost certain interest rate rises and need tenants who pay. This is already difficult in a renters’ market, without further problems arising through unpaid rent.
“Due to the nature of these claims, the success rate for collecting outstanding residential rent claims is much lower than for normal consumer and business debts.
Mendelson says this is because tenants who default in their residential obligations tend to be difficult to track down and tend not to have assets or a steady job.
Mendelson also said there was a tendency for landlords to accept tenants who would normally be rejected, in order to get the property let.
“Residential landlords should never accept a tenancy application without carefully checking the references,” he said.
If landlords have an agent acting on their behalf, they should ensure that the agent checks the reference with the previous landlord and also confirms that the employment information provided is correct.”
