Hi everyone, i'm here representing my father because he has a very poor understanding of english. We have some troublesome tenants and here is the full story.
At the beginning of the tenancy, all we gave them was a lease agreement. It wasn't one of those lease agreement packs that i'm told you get from the newsagency either. It was typed up instead of written. Yes I know, off the bat, it's already made things illegal. We didn't get them to sign a condition report either. Again, my dad wasn't aware of the existence of such a thing. The term of the lease was for one year.
Over the past few months, the tenant has been late paying the rent (paid fortnightly as specified in the Renting Guide). Each time he's either paid only part of the rent or told us that he didn't have any money at all and told us that he'll pay us on another specified day.
My dad's getting rather frustrated at this because they owe us more than a months worth of rent now and that isn't even inclusive of the water bills that he still owes us. My dad has asked me for my help to find ways of getting them to leave the property and i've been reading the renting guide from the NSW Office of Fair Trading. I had no idea about the missing conditional reports and the special lease agreement that you need to get from the newsagencies. All I'm trying to do now is try to follow the guidelines set out and give them an end of tenancy letter. However i am confused as to how long i have to give them (14 days? 60 days?) and whether that missing condition report means that they can trash the house and we wont be able to do anything about it.
We really need help here and any advice will be helpful.
Thanks everyone and hope you have a merry christmas!
Oh, also the lease agreement ends on the 1st of March 2008
Merry Christmas, blay! (Just reading the forum whilst waiting for the kids to wake up.)
Good on you for helping Dad try to retrieve the situation. I'm not familiar with NSW law but I think my advice would be influenced by some stuff I heard Steve say about difficult tenants. I hope you at least have a bond! Let's assume that you have $1K in bond, and that you have to give 60 days' notice (and I'm unsure about this). Write to them – registered mail of course – and say that you're giving them notice IAW the law, whereby I assume you can keep from their bond any unpaid rent and damages to the property, and that they'll be aware of this.
But offer them "incentives" to leave nicely. Tell them that if they leave within 14 days instead, and leave the property in good condition, you'll not only give them their bond back, but an extra $1K to help them with moving costs. A thousand bucks – and the potential of two thousand – should be enough money to someone in this situation to promote cooperation. I know that morally it may feel hard to give more money than you have to, to people who've done the wrong thing, but it's the most pragmatic course of action to try and end this tenancy quickly and with minimal problems.
Best wishes, Tracey from Brisbane (but in Mildura right now!)propertypowerMember@propertypowerJoin Date: 2006Post Count: 312
You may want to make sure your father has appropriate landlord insurance as well. This should (to a large extent) coverdamages from malicious damage, loss of rent, etc.
Hi tracey and propertypower! Thank you for replying! Good Morning and Merry christmas to you two also! hahaha I thought people would be sleeping in on Christmas day…
Anyways this morning me and my dad woke up early to go see the tenant. Unsurprisingly he wasn't home/didn't answer the door. We went to the Tenant's Guarantor's house (who lives just down the street). The Guarantor is also the Tenant's brother-in-law. He told us to tell the Tenant that he has until Saturday pay the rent or he has to leave the property.
What happens if the Tenant doesn't leave? I've read on the Fair Trading website that we can't exactly call the police on them and that it has to be an order from the CTTT (Consumer Trade and Tenancy Tribunal.
In replying to Tracey's post, I would love to use that idea but we just dont have that kind of money. We only have our own unit and this house. From reading Steve McKnight's book, this house isn't even providing cashflow, it still requires my dad to pay mortgage on the house straight from his own pocket. However, the Guarantor seems like a very honorable man, he's lived at the property just down the street from our Tenants' for over 5 years now and has yet to miss payment. He's told us that once the Tenant leaves, we can keep the bond, he'll pay whatever is remaining. He's also told us that if there's any damage to the property, he'll fix it himself and we won't have to pay a cent.
I think this is slowly becoming a civil matter and it looks like we dont even have the law on our side simply because we're missing a majority of the documents…
Oh and propertypower, we dont have landlord insurance… again i think it's because my dad can't afford it or he just wasn't aware it existed. I've just realised that there's alotta stuff that my dad doesn't know. Mainly because we went from crappy property management agents who have let the tenants trash the place before to managing this place ourselves. Once this tenant leaves I'm determined manage this place properly myself so stuff like this doesn't ever happen to my dad again.MillyMember@millyJoin Date: 2004Post Count: 288
sorry to hear your very common story. I was in a similar situation and handed it over to an agent. Does your dad know that agent fees are tax deductable? anyway I still manage a couple of properties where the tennants are a dream.
You simply MUST get landlord insurance. It isn't too late. Again this is tax deductable.
Tell your tennant if he leaves within a fortnight or month and the property is in good repair, you will give him a good reference for his next property. (you can always tell the new landlord the tennant is constantly late with rent). sounds like you are being taken advantage of and so it is time to act.MillyMember@millyJoin Date: 2004Post Count: 288
oh i forgot to say you can get all the relevent documents online, download them and print them out. I know here in queensland I can go to the RTA site to get the forms.
There is also thelandlord.com.au which has the forms for each state plus other interesting stuff but you have to pay for it.
blay, I think you've been incredibly fortunate with the guarantor. Given that you have no lease and no landlords insurance, things could be a LOT worse!
Don't, however, take the guarantor's advice and tell the tenants that they have to be gone by Saturday if the law says that you have to give them more notice – they could then appeal and you'd be stuck for ages. Give them the legally required notice but offer some incentive to leave earlier, eg you'll pay for the removal truck, or you'll help them move, or something that you can afford. (And remember they're costing you a lot of money to stay there if they're not paying rent.) And arrange to do a vacation inspection on the day they move out, with the guarantor and tenant present, so the tenant knows that his BIL is going to see how he's left the place.
As soon as the property's vacant, get it back up to scratch, get a condition report, get a proper lease in place, and get landlord's insurance. These are essential, IMHO. I think that a good property manager is wise, but I also know people who manage their own properties and find it OK. Depends on your personality, I guess; I prefer to spend my time looking for more investments, and find dealing with tenants unpleasant. I also don't trust myself to get all the legalities right, whereas a good property manager is very familiar with tenancy laws.
I have a feeling that your father is going to be OK. Treat it as a lesson learnt, thank God for watching out for you and giving you a relatively cheap learning experience, and get things right next time.
Hope you all had as awesome a Christmas as we did – heaps of family, not too hot, kids and pets well-behaved, everybody in good spirits (except permanently cranky Nanna) – just perfect!
Warmest regards, Tracey (visiting Mildura, from Brisbane)pyramidParticipant@pyramidJoin Date: 2005Post Count: 64
We have recently had a similar experience with a bad tenant who still ows us about $5000 in Sydney. Our property was managed by an agent and all the paperwork was in place (condition report, tenancy agreement, etc). However, even that does not gurantee that you will get all your money.
In NSW, you can give a "no reason" termination/eviction notice of 60 days. If you don't succeed, you then go to the CTTT who will arbitrate the matter. We have done all that, the CTTT found in our favour, the tenant has vacated and moved on. We have no forwarding address for them. They still owe us the $5k despite the CTTT order. The only way for us to recover the debt is to go through a debt collection agency (provided of course that they can locate the previous tenants who have absconded).
So to cut it short, things don't always work out in the landlord's favour even if you follow the legal process. I know it is not what you wanted to hear, but Trakka's advise about motivating the bad tenant to leave may work out "cheaper" for you in the longer term.mackayiteMember@mackayiteJoin Date: 2007Post Count: 3
I have recently had similar problems with one of my houses, and so have some first hand experience for you. First of all if the tenants are behind in their rent you send them the appropriate form (Form 11 from the RTA site). You give them 7 days to remedy the problem and if they don't, you then send them the next form giving them 7 days more to move out. If they don't move out you then make application to the Small Claims court which will set a date for a hearing within a few days. If you can show that they have done what you say they have done, the court will normally issue an order for their immediate eviction which will be by force if necessary. The court application costs $13.50. Make sure that you give them 7 clear days to pay the rent before sending the Forms on the 8th day.
Now if they catch up with their rent but at some later stage they again get behind, more than twice in the space of 2 years, you have grounds to evict them without further reason. I think you have grounds now to do this. As for the lease, if its invalid, the tenant has no right to be there anyway, so follow the same procedure to evict them. Hopefully the bond is being held by the RTA and will cover any damage. If not find out where they move to (and where they work) and persue them through the courts, they will be liable for your costs as well. Any information you need is available from the RTA in your state on a 1300 phone number.
First of all i thank all of you for your advice, opinions and information! you've all been very, very helpful and i've learnt quite alot so far! i'll definitely be saving this thread for future references!
As for the annoying tenant, my dad went again today and finally found the tenant at the house. We've been trying to get a hold of the tenant for the past few weeks and he's just been avoiding the guarantor and never was never at home. We've found out that he's a constant gambler and that he's even borrowed other family member's money to try to gamble/win the rent back…
Anyways, that aside (and long story short), my dad went to see him today along with the guarantor and got given a bit more of what was owing. My dad was again told that he'll get the rest on Monday. My dad replied with an ultimatum that if the remainder (which is approximately 600) wasn't paid on Monday then he'd have to vacate the property within a week.
I wasn't there to help negotiate with my dad coz i had work. i kinda have a feeling that with my dad's bad english, he didn't quite get all his message across. He did tell the tenant that the lease wasn't gonna be renewed in the new year so i guess we only have to put up with them for a little longer…
Oh two questions:
1) In the time period that we allow the tenants to 'move out' do we charge the tenants rent? or is that up to our discretion? I think i might put that on the negotiation table and say that we'll give you 2 weeks rent free to vacate.
2) With the debt collectors, is it worth it to use them and how do they work? From the sound of things, pyramid, you made it sound as it isn't worth it to chase the $5ks and im guessing the cost of recovery would be equivalent/more than what you're gonna get back.
I'll be there with my dad on Monday to make sure everything goes well. If the tenant doesn't pay at least we'll have to deal with them for a lot shorter. I'll update you guys when i receive more news!
Once again, I want to thank all of you for being so patient and taking the time to teach a newbie like me! It's been a wonderful learning experience! I hope you all enjoy a lovely, lovely new year eve/day with your families and may all of you be all the more prosperous with your investments the next year!
blay aka Jimmy
Oh and one more question:
The house is listed in my suburb as a "Heritage Listed" or something. I'm told that we're not allowed to knock it down/rebuild unless the place is in an un-inhabitable condition. Is there any way to get around this "Heritage listing"? Because i know for a fact that my dad's original intent was to flatten the house and build a nice new one instead of renting out this old War-era home…pyramidParticipant@pyramidJoin Date: 2005Post Count: 64
We will certaily be pursuing the absconded tenent via Debt collectors in the New Year (hopefully they can locate them). All this happened last month so we are still finding our our way through the maze. They had left our property in a real mess – however this does not matter in this case as we have flattenened it to develop a duplex in its place.
Good morning, Jimmy. Your tenants are obligated to pay rent for the duration of the notice period, though whether they'll do so is obviously questionable. It's definitely a good idea to have this as part of your negotiation strategy as you outlined.
And I have no personal experience with debt collectors but doubt it would be worthwhile in this situation. If people just don't want to pay, it can be useful, but if they really don't HAVE any money, well "you can't get blood from a stone". And the costs of recovery may approach the level of the debt. It may be more worthwhile to put pressure on the guarantor. Also I'm unsure whether you can do this legally (privacy laws etc), but if they're employed, it may be worth checking out if you can tell the employer. Sometimes a word from the boss can work wonders! (But as I say, make sure you're allowed to do this first.)
With regard to the heritage listing, the rules vary considerably between jurisdictions. Ring the Council and ask them exactly waht limitations the listing places on the property, and whether there's any possibility of having the listing lifted. Some may advise you to just not repair the place and let it become unhabitable, but tread carefully with this – Council can and will prosecute if they can demonstrate that this is your intention. But you may be pleasantly surprised at how helpful Council is if you just approach them and ask what's possible. The worst that can happen is they'll confirm what you already suspect is the case!