‘Drive away, no more pay’: Rogue tenants swindle thousands from landlords while living rent-free

A landlord who lost thousands of dollars in rent to “rogue” tenants has revealed the shocking tactics used to stay 400 days rent free.

A Melbourne landlord has lost over $16,000 in rent and almost had his home repossessed by the bank, after one of his tenants failed to pay the lease on his property for over 209 days.

Wayne Tseng, the president of Chinese Precinct Chamber of Commerce, is one of hundreds of Australian property-owners who have fallen victim to “rogue renters”.

The self-employed real estate agent is now sharing his experience to show how a minority of tenants are using unlawful tactics to get away with living in a leased property for months rent-free and without punishment.

In February last year, Mr Tseng approved for two tenants to rent his Southbank apartment in Melbourne, with little sign of any red flags.

The couple happily paid the bond plus the first month of rent, supplied identity documents, were willing to be in photos that proved they were given the keys and kept up-to-date with rent for four months.

“The tenants looked after the apartment well and were well-mannered,” he told news.com.au, suggesting there was little to worry about.

Mr Tseng’s Southbank apartment was home to “rogue renters”. Picture – Supplied

But a property inspection in the middle of July indicated things were taking a turn, with the tenants failing to pay the $2,400 in rent that was due for the month.

After sending several email reminders and providing a rental summary to the couple, Mr Tseng lodged a Notice to Vacate the apartment in line with Victorian landlord and tenancy laws.

“The Notice to Vacate was issued on 29 July, last year, with the rent 14 days in arrears,” he said.

Two months on, the couple had failed to leave the property and were weeks behind on rent payments. As a result, Mr Tseng applied to have the case heard at the Victorian Civil and Administrative Tribunal (VCAT).

The hearing took place in late October – 100 days after the last time the tenants paid Mr Tseng rent.

Both parties were able to come to an agreement on a payment plan, however Mr Tseng’s hopes of receiving over three-months worth of rent-owed were short-lived when the tenant didn’t pay the first instalment on its due date.

“I sent a lot of emails and phone calls to VCAT for repossession immediately,” Mr Tseng said with the aim of reinstating the case.

“In the meantime, I also received a letter from my broker that I had missed three months of my mortgage repayments (and had been notified) the bank was progressing the process of seeking repossession of the property.”

The hearing was finally scheduled for December 16, but with the tenants failing to show up and the tribunal closing over the Christmas and New Year period, a second hearing to vacate the tenants wasn’t held until January 27 this year.

Today, Mr Tseng is owed more than $16,490. He doubts he’ll receive a single cent back because he has no information on where the tenants have moved next.

“All the tenants’ have lost is the bond,” he said.

“Without their new address, there is no further way you can chase the missing rent, and even if you did know, you would have to apply through the Magistrates Court to first survey their assets and then apply to seize their assets.”

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Hundreds of homeowners are falling victim to “rogue renters”, with some swindling thousands of dollars. Picture: NCA NewsWire / Aaron Francis

One of many cases

Mr Tseng has labelled the violation “drive away, no more to pay” and has dozens of clients who are currently going through the same situation.

“There is an epidemic of rogue renters who are leveraging the rental law to stay rent free,” he said.

“And with VCAT in tatters, it now takes up to three months to get a hearing. Other cases drag on longer, so renters can get up to one year of free rent.”

The longest case the Chinese Precinct Chamber of Commerce has had on record is a tenant staying in a rental for 400 days rent-free.

According to Court Services Victoria’s Caseload Dashboard, close to two-thirds of VCAT cases in the last three months of last year were on the Residential Tenancies list.

During this time, a staggering 23,594 cases were pending to be heard by the tribunal, while just over 11,000 had been initiated and over 9,000 had been finalised.

While it’s unclear how many of these cases were for non-consensual occupancy due to unpaid rent, Mr Tseng said rogue renters are seeing VCAT’s overwhelming caseload as an opportunity to engage in copycat behaviour.

“It‘s almost synonymous with pirate streaming websites. You know it’s free, who will say no to a free offering if anyone can catch on to do it?” he said.

“They are also not necessarily poor. In my case, the renter owned expensive furniture and personal items … so they are not socially disadvantaged.”

Additionally, Mr Tseng said the eviction moratorium that was put into effect during the pandemic to make it harder for landlords to vacate tenants, made it easier for rogue renters to draw up a blueprint on how they could stay in a rental for longer durations without paying.

“The fact is, once they are in a couple of hearings, they become very strategised,” Mr Tseng said.

“They don‘t turn up (to hearings) because they know they can request a re-hearing if they’re sick or something and they try to use every possible scenario where VCAT has to honour it until they’re removed.”

Once a tenant is evicted, the real estate agent said it’s “almost impossible” to track them down without their next address, and with lawsuits expensive, landlords give up, enabling tenants to get away with the illegality.

The longest time a tenant has stayed in a rental rent-free was 400 days. Picture: iStock

How it’s impacting the rental crisis

Landlords are incurring a massive financial loss as a result of this crisis, with many losing between $20,000 to $40,000 in payments depending on how long the tenant manages to swindle their way into staying at the property.

Consequently, with so much at stake, many investment property owners -particularly mum and dad investors – are taking their homes off the rental market in fear they’ll get conned.

This means dozens of properties that were once purchased with the hope of housing tenants, are sitting empty and in turn driving up the country’s vacancy rates.

While it’s still a low value in comparison to the number of properties needed to accommodate for the dozens of people looking for homes, Melbourne’s vacancy rate climbed by 0.2 per cent between November and December last year to 1.7 per cent.

“The people who suffer are those who really desperately, genuinely want to rent a place to live,” Mr Tseng said.

“Or people who are keen to step into the market be one of the millions of rental providers who contribute to our economy.”

It comes at a time where affordable homes and rentals are in more demand than ever due to the pool of lower-priced property growing smaller.

Landlords aren’t the only victims of this unfair crime, with genuine renters also affected. Picture: iStock

Calls for change

Mr Tseng has pushed for changes to Victorian rental laws for some time, with it being a key focus in his campaign while running as an independent candidate for Box Hill in Victoria’s November election.

While strengthening landlord and tenancy rules is on the top of Mr Tseng’s agenda, he is also calling on both state and federal governments to create a national database that stores the details of tenants who fail to pay rent, electricity, gas or water without any reason.

“You have a government who spends more money towards running another Commonwealth Games, when that money could be spent cleaning up (the rental system) and making sure VCAT runs smoothly,” he said.

Mr Tseng is also calling for real estate agents to have access to the tenant‘s credit ratings and banking history.

“There are so many gaps in the law … the government needs to revisit and strengthen it so people can have more confidence in the property market,” he said.