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  1. #1
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    Default Debt review arrangement ??

    Anyone know how residential rental would be affected by a tenant being under debt review.?
    I have a prospective tenant who is or soon will be under this arrangement.
    There is another person prepared to co-sign the lease with her, but she says that she will be paying the rental.
    Anyone been involved with this issue ?
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  2. #2
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    Default Re: Debt review arrangement ??

    Thats a tough one.
    Where did she stay before coming to you?I would certainly find out somehow and try get a reference.
    She clearly cant pay all her debt by herself and hence debt review..Does not mean she has maybe not got the money but can be she spends it on the wrong stufff before her debt payments are made.
    I know of a few people under administration who rent and never default.Its your gamble

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  4. #3
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    Default Re: Debt review arrangement ??

    Peter, without looking at the legal implications, considering the difficulties in evicting a tenant why would you want to take on someone who has already shown an inability to manage their finances? Rather lose a month's rental looking for a better quality tenant than lose a year's rental when you need to evict the person?

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  6. #4
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    Default Re: Debt review arrangement ??

    Quote Originally Posted by Half-Pint View Post
    Peter, without looking at the legal implications, considering the difficulties in evicting a tenant why would you want to take on someone who has already shown an inability to manage their finances? Rather lose a month's rental looking for a better quality tenant than lose a year's rental when you need to evict the person?
    I was just considering relying on the co-signatory.
    They both have stable jobs and good middle income range.
    But yes, I am hesitant and hence the question here.
    I will get credit checks on both and see what those turn up.
    Thanks for the input thus far.
    Peter Hutchison
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  7. #5
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    Default Re: Debt review arrangement ??

    Step very carefully and as has been mentioned rather lose a month or 2's rent looking for a safer tenant if needs be because a non paying tenant that won't leave is nightmare that you do not want to endure.

    That being said being under debt review is not always as a result of negligence, suddenly lose your job and not find one for 6 months can quite easily put anyone into default, especially after the lockdowns hit many industries.

    So if I read it correctly the tenants surety will be paying the rent not the tenant themselves?
    Last edited by Skylark; 2021/10/14 at 08:07 AM.

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  9. #6
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    Default Re: Debt review arrangement ??

    Peter, maybe familiarise yourself with the process if you havent already.

    This will give you a heads up at which stage the tenant is sitting in, how it works and perhaps assist you in your decision process.

    https://debtreviewcentre.co.za/how-d...SAAEgLbK_D_BwE
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  11. #7
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    Default Re: Debt review arrangement ??

    This also

    https://www.cch.co.za/news/can-you-r...r-debt-review/


    How can you increase your chances of securing a lease agreement while you are under debt review? It is common for real estate agents and landlords to still have some concerns with regards to your debt review status. To settle these concerns, your debt counsellor may provide the real estate agent or landlord with a proof of budget that indicates that you are in fact able to afford the rental amount every month. You may also provide the real estate agent or landlord with bank statements that indicate that you can afford the rental amount. You can also offer a double deposit, or another person to co-sign the lease with you.

    Last edited by Estee; 2021/10/14 at 08:16 AM.
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  13. #8
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    Default Re: Debt review arrangement ??

    Quote Originally Posted by Peter1949 View Post
    I was just considering relying on the co-signatory.
    They both have stable jobs and good middle income range.
    But yes, I am hesitant and hence the question here.
    I will get credit checks on both and see what those turn up.
    Thanks for the input thus far.
    May I ask, how does a lay person such as yourself get access to a third parties credit record?
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  14. #9
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    Default Re: Debt review arrangement ??

    Quote Originally Posted by Half-Pint View Post
    Peter, without looking at the legal implications, considering the difficulties in evicting a tenant why would you want to take on someone who has already shown an inability to manage their finances? Rather lose a month's rental looking for a better quality tenant than lose a year's rental when you need to evict the person?
    Please dont tar everyone with the same brush. Just because someone is in debt review doesn't mean they are unable to manage their finances.
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  16. #10
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    Default Re: Debt review arrangement ??

    Quote Originally Posted by Caracal View Post
    May I ask, how does a lay person such as yourself get access to a third parties credit record?
    There are specialised businesses and individuals you can check this for you, including if they own any businesses, bank accounts held, balances, vehicles including boats, trailers, quads, caravans, if they are registered to them, a spouse, trust fund or other family member etc.

    I use these services if I need to investigate employees on behalf of a client (means test) and have uncovered quite a few cases where an employee lives larger than their stated means would allow. Some can even do forensics on electronic devices.

    There are varying costs for the level of check you require.
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  17. #11
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    Default Re: Debt review arrangement ??

    Quote Originally Posted by Caracal View Post
    Please dont tar everyone with the same brush. Just because someone is in debt review doesn't mean they are unable to manage their finances.
    It may be a bit of a generalisation, but bear in mind that with debt rescue, someone literally sits with you and manages your finances, from restructuring your debt to drafting you a monthly budget.
    Cheers
    Willem Greyling

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  19. #12
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    Default Re: Debt review arrangement ??

    Peter, I'd be hestitant to lease to that debt review tennant.

    Rather then let the "co - tennant" lease on his/her name, or just dont do it.

    If the DR Tennant defaults on her lease payments to you, and you acually knew she was under DR, you may have a VERY hard time

    1) Getting even a portion of payments, and

    2) Evicting her

    Personally, I just wouldnt do it.

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  20. #13
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    Default Re: Debt review arrangement ??

    Peter,

    Debt Review is one of the remedies available to distressed consumers under the The National Credit Act.
    It goes without saying that there are numerous reasons why a consumer is distressed - in short, life happens and Debt Review is a responsible action by the consumer to remedy the situation.

    The purpose of Debt Review is not to punish the consumer - it is a structured arrangement between a consumer and Credit Provider which is confirmed by a court order.

    If the Debt Counsellor did a proper job (and he need to do one in order for the Credit Providers to accept the proposal and the court to finalise the arrangement), then the consumer must be left with sufficient funds to cover his living expenses, and rent/housing is categorised as a essential living expense.

    It may be a good idea to sit down with your prospective tenant and ask him/her to share with you the amount budgeted for by the Debt Counsellor, and you can make your own decision from there.

    You are welcome to DM mail if you want to discuss in more detail.

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  22. #14
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    Default Re: Debt review arrangement ??

    People under Debt Review are not criminals by default.

    The reasons for being under Debt Review can be one of many.
    Don't judge.

    IMHO, they chose to man up to their debt, rather than defaulting on their debt, and running away.

    The Debt Review process is there to get them debt free, and pay off at least the capital portion of their debt.
    Why not acknowledge their stance on their debt and assist them to get back on their feet?

    You could consult with the Debt Review agency, to ensure payment.

    Edit: I was typing when rian skip posted.
    Last edited by 4ePajero; 2021/10/14 at 09:11 AM.
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  24. #15
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    Default Re: Debt review arrangement ??

    Quote Originally Posted by 4ePajero View Post
    People under Debt Review are not criminals by default.

    The reasons for being under Debt Review can be one of many.
    Don't judge.

    IMHO, they chose to man up to their debt, rather than defaulting on their debt, and running away.

    The Debt Review process is there to get them debt free, and pay off at least the capital portion of their debt.
    Why not acknowledge their stance on their debt and assist them to get back on their feet?

    You could consult with the Debt Review agency, to ensure payment.

    Edit: I was typing when rian skip posted.
    There is no shame in it, and I have more time for someone that puts his tail between his legs and confront his debts heads on.

    But that does not mean that a creditor should bend over backwards to accommodate a poor paying debtor. Business is business otherwise the creditor may end up also approaching a debt counsellor if his debtors don't pay their dues.

    Everyone is entitled to mitigate their own risks.
    Cheers
    Willem Greyling

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  26. #16
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    Default Re: Debt review arrangement ??

    Look, just like someone under debt review isn't a criminal, a guy who drinks too much and parties all night isn't a criminal. I wouldn't let either live in my flat, though.

  27. #17
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    Default Re: Debt review arrangement ??

    Quote Originally Posted by MANDREAS View Post
    But that does not mean that a creditor should bend over backwards to accommodate a poor paying debtor. Business is business otherwise the creditor may end up also approaching a debt counsellor if his debtors don't pay their dues.
    Willem (and apologies to Peter for the hijack of the thread),

    The Debt Review process does not work like that.

    There is an agreement between the consumer and all Credit Providers, drafted by a Debt Counsellor, whereby the Credit Providers accepts the offer of the consumer.

    This agreement is then presented to court, and if approved by the court, it is a binding agreement between all parties.

  28. #18
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    Default Re: Debt review arrangement ??

    People who can manage there finances are home owners not tenants. Especially in this low interest rate environment.

    debt review is rehabilitation after admission that there is a problem, similar like an alcoholic decided there is a problem and goes to AA

    each carry there own stigma


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  29. #19
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    Default Re: Debt review arrangement ??

    Quote Originally Posted by rian skip View Post
    Willem (and apologies to Peter for the hijack of the thread),

    The Debt Review process does not work like that.

    There is an agreement between the consumer and all Credit Providers, drafted by a Debt Counsellor, whereby the Credit Providers accepts the offer of the consumer.

    This agreement is then presented to court, and if approved by the court, it is a binding agreement between all parties.
    And what percentage of those under debt review are able to adhere to the repayment obligations for the course of debt review? Just because something is made an order of court does not mean everyone will adhere to their obligations.

    Some do not adhere because the cost of living increases and they are not able to meet their obligations despite trying their best. Others fall off the wagon for the same reasons they ended up under debt review in the first place.

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  31. #20
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    Default Re: Debt review arrangement ??

    Peter, the main thing is for you to minimise your potential risk. Estee has given some good advice. Stay objective and don't let personal feelings guide you.

    I can confirm that I currently have a tenant which is under financial administration. He doesn't qualify for credit anywhere but he hasn't defaulted on a payment at all.

    So, one has to look at the merits of every case separately.
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