Hi
Late last year one of my tenants stopped paying rent. I had signed him up with a lease option in April 2002. He lost his job, etc. I gave hime some breathing space, he paid one more week, the in Jan this year he did a runner.
Luckily I was doing this thru a Real Estate agent. He took the matter to court for me. The Victorian Civil and Administration Tribunal has now found that the tenant had abandoned the property and has ordered that I was entitled to enter the premises and that the tenant shall pay me all the back rent owed (about $1900).
I now beleive that I can chase the tenant for this money. Does anyone know anything about debt collection? I have heard that you can sell debt to collection agencies.
BTW the property has increased by about 20% since I bought it, so I have come out in front by the tenant abandoning the property.
Regards
Terry
Terryw
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hi Terry,
I would personally not worry about the $1900. I am shore you can make more money spending your time investing. Than wasting it chasing a defaulter. After all you have still profitted from the experience.My Mum work uses a debt colector, they take a 10% commision, and thats it, no work for you so why not. Also i think the NSW sherrif might do that kind of work.
My Mum work uses a debt colector, they take a 10% commision, and thats it, no work for you so why not. Also i think the NSW sherrif might do that kind of work.Personally I’d go with the debt collector
We’re going through the NSW Sheriff on a non business matter and so far we’ve had to go through court appearances (where the other party never even turned up), reem of paperwork, waiting in a few hours worth of cues and ultimately once we were even able to provide the bank account details of the other party, orders to garnish their bank account. We still haven’t seen any actual money back.
From my experience all it seems to take to get around the state Sheriff is to move house and possibly change bank accounts. After that the sheriff doesn’t even keep looking unless you can supply them with the exact address of the person who owes you money.
10% to have the other 90% collected by professionals with an incentive to deliver sounds like a great deal by comparision to me!
Quasimodo
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It seems to me that action has a most magic way of answering
all the questions our fearful mind tries to throw before us…
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Dont bother. You are wasting your time and energy for a small amount of money you will never get back.
Hi Terry,
I’d recommend doing an Internet search on debt collectors and seeing what comes up.
If it’s not going to cost you anything then I’d allocate at least a few hours, however, there is merit to what Darren has said to just move on and spend your time looking forward, not back.
Still… if you have a tribunal order…
Thanks for contributing the story.
Interesting that the tenant would just abandon the property rather than cash in the equity. We have had a few wrap deals go the same way.
Bye,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
I agree with Stonewall and darren b.
Forget about it. It’s a small amount of money that you should’t waste energy on and lose sleep over.Consider it a learning experience and move on…don’t look back in anger. You’ve also gained 20% in equity so why complain?
I’m sure he did a runner for a good reason if he lost equity in the deal. Let’s just hope he’s not out there cold and hungry sleeping in a gutter.Thanks everyone for your replies.
Since writing the post I have rang around to a number of debt collection agencies, however, all only want to deal in volume accounts. ie they don’t want to do a little one off collection. My solicitor has also said it is probably not worth worrying about due to the small amount.
Terryw
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hi Terry
It may be worth contacting Prushka, they’re based in Mitcham, in Melbourne.
I’ve used them for our preschool collections, they take a chunk out of monies collected, but once you had the information over that’s all you do. It can take a while, too, but it’s better than never getting the money at all.
They don’t mind if you’re a small client, either!Keep smiling
Felicity
I was told a story today by an agent who was about to evict someone. Asked why he couldnt catch up his payments, his excuse was my Austar and mobile phone bills are due, it will have to wait!
Hi everyone. A bit of an update.
I have finally found a company willing to take it on. Professional Collection Services, http://www.profcoll.com.au .
They do recovery on a commission only basis with very reasonable rates: 15% on up to $5000.
They are onto my case and I will let you know how it goes.
Terryw
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Terry –
Yes please! I’d love to know how it all works out. This is an excellent ‘case in progress’.
Bye,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
If this recalcitrant tenant was signed up on a lease option deal, did he abandon his right to buy the property by walking out of the lease?
You would probably want to be able to write a new option over the property to someone else, but if it was already optioned to the runner, that possibility would be gone.
Does anyone else take the precaution of stipulating in their lease/option agreements that breaching the terms of the lease automatically cancels the option?
regards to all,
AndySoma
Yep. He has broken the lease and lost his rights under the option agreement. The court order that I have actually agrees that he abandoned the property on a certain date and this gave me the right to repossess the property..
Terryw
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hi all,
Terry it’s a very interesting situation. Thanks for sharing it with us.
Always learning
Sooshie [
]There are no problems, only solutions
anything happened on this?
Jas
Hi Jas
The agency has tracked down the tenants mother and she won’t give out his address, but has said he collects mail from there. So the have sent letters asking him to pay etc. Now they have asked me to pay $450 so they can serve a summons on him. This money would be tacked onto the amount he owes me and the would also recover this from him. I didn’t like the idea of doing this and am just waiting to see if he will respond.
Terryw
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
I iam going through a similar situation now. Proceed or not with debt collection agencies.
I did a search and found this.
What was the final outcome. Did you recover any money in the end?
Whats happened to the property?
hi Yack
Basically nothing has happened since the above post.
I did not end up paying that company the extra money to issue a summons as I thought it was a bit much. The tenant still owes me the money – $1800 approx. I can still chase him if I want, but am a little hesitant at the moment.
If it was in NSW, I know the proceedure now, and could do it all on my own. Where is your tenant located?
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
The property is in Frankston, Victoria. The tenant has fleeed to Queensland.
Thats why they have good population growth.
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