NAB seeking right to evict tenants without notice

[Tobily]

The NAB has gone to the Supreme Court seeking the right to evict tenants in Victoria - WITHOUT NOTICE - if landlords default on their mortgage.

NAB seeks right to evict tenants - ABC News (Australian Broadcasting Corporation)

The National Australia Bank is challenging a law that requires renters to receive 28 days' notice to vacate a property as it chases property owners who have defaulted on their repayments....

"Potentially they're saying that there is no requirement for them to issue notice under the Residential Tenancy Act and there's no requirement for them to secure a possession order from VCAT before taking possession," Mr Archer said.

"It's incredibly ruthless and cold-hearted for the NAB, one of Australia's big four, to proceed in this fashion, which will essentially evict tenants who have done nothing wrong without any notice."

And there are fears the NAB case would establish a precedent for other banks to follow.

I'm just totally appalled that a bank who is about to announce yet another multi billion dollar profit this week - a bank that is able to do so, at least in part, because of the guarantee given them by Australian taxpayers after the GFC- could show such utter contempt.

For those who believe the Occupy movement has no relevance in this country - this is a prime example of the big end of town plundering for profit at the expense of society as a whole, and this is exactly what the Occupy movement is railing against. Given that about 35% of the Australian population are renting, and the increasing rate of mortgage defaults, a successful action of this nature could result in a pretty awful situation for many, many people.

The prospect of families who have met their financial commitments (ie. paid their rent in full and on time) being turfed out on the street with no warning, no rights and no recourse because lessors have taken on more debt than they can handle with full complicity of the banks just makes my blood boil! Will tenants be permitted to vet their landlords prior to signing a lease to ensure the tenancy will be viable, in the same way *their* incomes are scrutinised by landlords during the leasing process? Or are renters supposed to just hope and pray that their landlord is solvent and they won't wake up one day to find someone changing their locks?

I will be writing to the NAB about this and I hope others will do the same. They need to know that this sort of predatory, greedy behaviour is NOT ON.

"More Give....Less Take" - that's their current advertising slogan. I'll be quoting it at 'em.

[Cranky Kitten]

Knew there was a reason I didn't bank with NAB...it is disgusting that they're even trying even though I highly doubt they'll be successful. Tenancy laws are pretty tight considering how difficult it is to evict tenants who AREN'T doing the right thing, let alone those who are.

[PumpkinZulu]

[black_rose]

Whoa! Glad I am not with the NAB, the tennants aren't to blame for the landlords actions, what a sad thing for them to be doing.

[Tobily]

black_rose - another thing that concerns me about this, is that if this action is successful it will set a precedent. And you can be pretty sure ALL four of the big banks will take full advantage of that.

If they get away with this, it will very quickly spread across all the major lenders.

And once that happens, voting with your feet won't even be an option

[Rowellen]

It doesn't make any sense. If the NAB sold the property (assuming they have the right too), it would have to settle anyway & I've never heard of a settlement contract on a property taking less than 30 days. Usually it's more especially with the banks being so slow to approve finance. So why would tenants have to move out prior to settlement? What if the new owner wants to keep the tenants? It's completely illogical. Wouldn't they be better off appropriating the rent payments in the interim?

Am I missing something?

I'm glad I don't bank with the NAB either.

[Jennifer13]

Hmmm... I hope the bank doesn't get this through the court. Because if they do, I find it unlikely they'll be the only bank who'll start doing this. It will set a precedent.

I think you'll find it's more likely that the banks will use it when they need to, rather than every time someone defaults. But I agree with everything Tobily has said too. It's not a good path to go down. I think an additional letter to the real estate institute requiring them to clarify whether or not they will suggest that agents verify the financial position of all landlords before renting out properties is in order too.

ETA: I looked up the story in full and it seems the landlords in question did not declare to the bank that the properties were being rented. I take it this is a requirement when you take out a home loan? So perhaps this will apply only when a landlord neglects to inform the bank. In which case, can renters ask for proof that any property with a mortgage is registered as such with the bank?

Anyone know the situation in other states?

[*Ang*]

I used to work in lending years and years ago...there are different interest rates and home loan options for different scenarios...ie an investment home loan will attract a different (usually higher) interest rate then one for an owner occupier. There are also different packages associated with both investment and owner occupier loans so perhaps the landlords in question sneakily tried to take advantage of a package or loan that was not appropriate to their situation hence then drastic action the banks are undertaking?

[Miss E]

That is disgusting. I hope our legal system stands up to the challenge and does not allow this to happen.

[Phteven]

And once that happens, voting with your feet won't even be an option

Yes it will. there are alternative finance systems available.
I know of one group who co-ops. Everyone who is part of the group puts in a figure each month and every month a different (rotating) member of the co-op receives the funds. This works great for small things such as car finance because it is interest free and profit free.
There are Islamic finance options with lend-lease schemes and rent to own schemes where your rent is paying your mortgage.
Barter groups etc.
If enough people voted with their feet the banks would be forced to make changes but I think that one of the issues that we need to overcome is people's sense of powerlessness and the idea that your 'vote' doesn't count.

As for the main topic - ****ing disgraceful and if my bank did follow suite I would not hesitate to remove my personal and business banking from them.

[Jennifer13]

I used to work in lending years and years ago...there are different interest rates and home loan options for different scenarios...ie an investment home loan will attract a different (usually higher) interest rate then one for an owner occupier. There are also different packages associated with both investment and owner occupier loans so perhaps the landlords in question sneakily tried to take advantage of a package or loan that was not appropriate to their situation hence then drastic action the banks are undertaking?

I thought that might be the case. I'll be interested to see if this then only applies to those who take out owner-occupier loans and don't disclose a change in this to their banks, rather than all home loans. In which case, the landlord is still the one doing the dodgy and it doesn't help the poor tenant, but surely Residential Tenancies Vic/NSW/etc could put in place protections to ensure this is checked before a property is allowed to be rented?