All Topics / Legal & Accounting / bankrupt tenant

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  • Profile photo of YnotnowYnotnow
    Member
    @ynotnow
    Join Date: 2007
    Post Count: 24

    my tenant just declared bankruptcy,therefore the 1 year lease has become void … 

    apart from checking if landflord insurance pays anything,what do i need to be aware of ???  

    seems like could be tricky since they cant be made liable for anything….

    as far as Iam concerned they are ok re moving out   

    thanks  

    Profile photo of Scott No MatesScott No Mates
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    @scott-no-mates
    Join Date: 2005
    Post Count: 3,856

    Is there an administrator appointed? If there is, you may be lucky that the aministrator takes on the responsibility for the payment of rent until they vacate/another tenant is found (this will work for commercial, don't know how you will fare on a resi).

    Profile photo of sam2009856sam2009856
    Member
    @sam2009856
    Join Date: 2006
    Post Count: 79

    Hi There

    Sticky situation but I guess it all depends on the attitudes of the tenants.

    Are they going to move out asap? Do you they owe you backpay in rent?

    If they are decent people they will move out asap and you should be able to find tenants in the current Australian rental market asap. 

    If they are not going to move out, then I guess you have to go through the normal eviction proceedings ie. issue eviction notice and then proceed with registering with the couts….. In W.A. all of the forms and what you have to do can be found at

    http://www.docep.wa.gov.au/default_cp.asp?id=cp/dev_publications/forms&menu=menu_cp

    Even if you go through insurance, they still expect you to minimise your loss which means still following through with the correct procedures.   I am not sure of the procedures in other states, you will need to look this up.

    Although they may not be in a good situation, you are an investor and not a charity so make sure you look after yourself.

    Profile photo of bendbanksbendbanks
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    @bendbanks
    Join Date: 2007
    Post Count: 46

    Hi,
        Well unfortunately you may have to treat this a learning experince. You have the bond still I'm assuming, but even if there is an administrator it would be safe to say that you would be at the bottom of the list.  This is an unfortunate downside to property investing, check your LLI policy . The  policy my firm provides would cover you in this even should you have a tribunal order. As to the moving out part you can only evict the tenant if you have an order saying so.

    Question – Did they go bankrupt owing rent or where they still in a positive rental situation when they where declared bankrupt.

    If I can be of any other help let me know

    Profile photo of YnotnowYnotnow
    Member
    @ynotnow
    Join Date: 2007
    Post Count: 24

    thanks everyone, just got informed about the situation… might work out all right , the tenant seems to be pretty decent and just got into a terrible situation …no rent owing yet , still got the bond , property is advertised 'for rent' and tenant is going to move out next week

    since there is no money owing yet I havent heard anything about an administrator,will see

    I ll check out the link, always good to know what to do …agree however bad`the story is, I ll not make it more difficult for the tenant, just for the sake of doing so but its a business not a charity 

    re tribunal order , the agent said the tribunal mentioned its pretty hopeless to chase money and try to insist on the one year lease until I get a new tenant  but I assume I could get an order if my LLI requests one ,will check as well

    cheers alex

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