All Topics / Help Needed! / issue with tenant re final inspection of a rental property

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  • Profile photo of twinztwinz
    Member
    @twinz
    Join Date: 2010
    Post Count: 4

    Hey there,

    I have a rental property (old house) was rented out straight after the renovation as fully furnished 6 months ago.

    The tenant now moved out of the house after lease expired.

    The living area's floor was newly polished before the lease. Unfortunately, there is a rug on the floor, therefore the photo has been taken (property condition report), unable to clearly shown the condition of the floor. But I have the receipt from the floor polish guy to proof that it was newly polished one week before leased out.

    Now, there are some scratches on the living area's timber polished floor (old jarrad). The floor polish contractor said one of the scratch (approx 10cm) is dept into the wood, therefore a overall re-sand and re-polish is required.

    The tenant is obviously not happy. The tenant have been moving the furniture around (moved in their new sofa etc) but they said they have got professional people to do the job therefore the scratches are not their concerned.

    Any advise… please help.

    Profile photo of Jacqui MiddletonJacqui Middleton
    Participant
    @jacm
    Join Date: 2009
    Post Count: 2,539

    It is not your problem whether the tenant moved their furniture themselves, or whether they hired a removalist to do so.  If there is damage to your property, withold some or all of the bond to cover it.  The tenant can then choose to try and recover the funds from the removalist.  But this has nothing to do with you.  You did not hire the removalist.

    Jacqui Middleton | Middleton Buyers Advocates
    http://www.middletonbuyersadvocates.com.au
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    VIC Buyers' Agents for investors, home buyers & SMSFs.

    Profile photo of Jacqui MiddletonJacqui Middleton
    Participant
    @jacm
    Join Date: 2009
    Post Count: 2,539

    Just as a side note, this is an example of why it is a good idea to keep finishes pretty basic in rental properties.  If you have an expensive finish, and the bond is insufficient to cover the damage, and the tentant won't pay the difference, and the insurance won't pay up because it is "normal wear and tear" and not "malicious damage", then you will be out of pocket.

    Jacqui Middleton | Middleton Buyers Advocates
    http://www.middletonbuyersadvocates.com.au
    Email Me | Phone Me

    VIC Buyers' Agents for investors, home buyers & SMSFs.

    Profile photo of twinztwinz
    Member
    @twinz
    Join Date: 2010
    Post Count: 4

    Thanks for the comments, JacM.

    I talked to a RE agent also advised the same – it's consider careless from the tenant.

    I think this will be the last time I arranged a fully finished leasing agreement.

    Profile photo of DWolfeDWolfe
    Participant
    @dwolfe
    Join Date: 2009
    Post Count: 1,253

    Hi,

    The house we rent has high gloss polished boards in one living area. They are scratched. This house was their PPOR before they went overseas for a couple years so probably explains why the boards are here. We have not maliciously damaged the boards, but unfortunately they do not wear very well in a house with two kids. We are even a shoes off house too!

    I hear you on the "they should pay for it" argument we have several rentals of our own and would be annoyed if someone maliciously damaged the premises. But as a tenant I can also see the other side which is, polished boards look really nice but are really impractical. If I was selling in an upmarket area I would put them in in a second but as far as renting they are annoying!They are also very noisy and cold. (In Melbourne brrr)

     I would approach them with quotes etc (through the agent) and explain that because they were damaged by the tenant (or proxy) that you would require a partial payment. If there is only one scratch it may be unreasonable to expect them to pay for all the resanding even if this needs to be done. I think you would have a hard time proving it was malicious damage if it went to a tribunal etc. I would try to get something out of them now rather than trying it on in a court setting and getting nothing. Also think about whether you want to resand the boards now or just keep a kitty going for when you have had a few tenants through and it really needs to be done.

    Good luck with this let us know how you go with it.

    D

    DWolfe | www.homestagers.com.au
    http://www.homestagers.com.au
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    Profile photo of littleaussielittleaussie
    Participant
    @littleaussie
    Join Date: 2010
    Post Count: 27

    Hi,
    I can understand your problem. One of my investment properties was trashed last year and the polished boards were severely scratched. The tenant lost her bond but it was impossible to get any money to cover the repairs. Since then I have paid a little extra for landlord's buildings and contents insurance. My policy covers accidental and malicious damage. If you decide to take out landlord's insurance, be sure to read the fine print as not all insurer's cover is the same.
    If you currently have insurance you could go to them and see if they would be willing to cover the repairs. Or if you have a good real estate agent they will handle this for you. Good luck.

    Profile photo of Jacqui MiddletonJacqui Middleton
    Participant
    @jacm
    Join Date: 2009
    Post Count: 2,539

    littleaussie: who are you insured with?

    Jacqui Middleton | Middleton Buyers Advocates
    http://www.middletonbuyersadvocates.com.au
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    VIC Buyers' Agents for investors, home buyers & SMSFs.

    Profile photo of KateMelbKateMelb
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    @katemelb
    Join Date: 2010
    Post Count: 71

    Do you claim depreciation on your IP? Floor boards are a great depreciable item and repairs are fully tax deductible.

    Profile photo of twinztwinz
    Member
    @twinz
    Join Date: 2010
    Post Count: 4
    KateMelb wrote:
    Do you claim depreciation on your IP? Floor boards are a great depreciable item and repairs are fully tax deductible.

    My accountant told me not to worry about get a depreciation report done and he will calculate the depreciation rates as the house is very old (80 years old) despite that internal kitchen/ bathroom have been upgraded.

    Have arrange a meeting with the tenant this week , will let you guys know how it go then.

    Profile photo of Jacqui MiddletonJacqui Middleton
    Participant
    @jacm
    Join Date: 2009
    Post Count: 2,539

    Good luck!!

    Jacqui Middleton | Middleton Buyers Advocates
    http://www.middletonbuyersadvocates.com.au
    Email Me | Phone Me

    VIC Buyers' Agents for investors, home buyers & SMSFs.

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

    Good luck, even taking this to the tribunal will see you out of pocket (agent as your rep, tribunal fees, lost time, vacant tenancy etc). Fair wear & tear is just that, it is fair for the tenant to have furniture and to use the property and the landlord cries tear(s) when their perfectly honed finishes show wear marks.

    Moral of the story – if the place has been refurbished, get a minimum of 12 month lease (there are professional tenants out there who go from new house to new house as they like being the first in).

    Profile photo of DWolfeDWolfe
    Participant
    @dwolfe
    Join Date: 2009
    Post Count: 1,253

    Thanks :) Scott.

    It's true that landlords can get a bit precious about properties! That is why carpet and tiles and a clean basic finish are great. Our landlords were still here packing the day we were supposed to move in. They ran around showing me all this stuff, how to use the tank (yep I'll figure it out) and all this other things I "needed" to know. The removal truck will be here tomorrow I'll figure it out…….! :)

    Matter of fact they are coming today and tomorrow to clean out the second garage they have stored all their stuff in while they are overseas. So if you don't hear from me it's because I will be far, far away from the circus.

    D

    DWolfe | www.homestagers.com.au
    http://www.homestagers.com.au
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    Profile photo of KateMelbKateMelb
    Member
    @katemelb
    Join Date: 2010
    Post Count: 71
    twinz wrote:

    My accountant told me not to worry about get a depreciation report done and he will calculate the depreciation rates as the house is very old (80 years old) despite that internal kitchen/ bathroom have been upgraded.

    Ahh the rates are easy (they're on the ATO's website), but it's the value of each item that's important, because this will affect the amount that can be depreciated (not the rate, that's set by the ATO).

    Getting a reputable quantity surveyer in to determine values is a great way to audit-proof yourself in case the ATO ever questions the values that have been attributed to depreciated items. A QS specialises in this but an accountant is just guessing.

    Here is some more info about depreciation reports: http://blog.rentwise.com.au/index.php/2010/05/18/depreciation-reports-please-explain

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

    Accountants don't recommend qs' as they cut the accountant out of work ;(

    Profile photo of littleaussielittleaussie
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    @littleaussie
    Join Date: 2010
    Post Count: 27
    JacM wrote:
    littleaussie: who are you insured with?

    We were insured with RACV landlord's insurance but they would NOT cover us for floorboards or rubbish removal or cleaning when the house was trashed. The house needed to be repainted and they would not cover that either. They did pay for the loss of rent though.
    Since then, our new agent has recommended Terri Scheer Landlord's Insurance as they have dealt with them in the past with no worries..
    So now we have RACV for our buildings insurance –  we need building insurance for our loans and they are the cheapest we have found.
    And we have Terri Scheer for our Landlord's insurance which covers contents and rent arreas. That policy also covers you for up to $60000 on your building. In Victoria it costs $275 p/a
    Their building insurance policy is separate from their landlords policy and is too expensive, that's why we kept our building insurance with RACV.
    Hope this is of use to you. If you happen to find any other good insurers please let us know.

    Profile photo of Jacqui MiddletonJacqui Middleton
    Participant
    @jacm
    Join Date: 2009
    Post Count: 2,539

    Thanks for sharing littleaussie ; very useful info.  I'm insured with AAMI, who I've found to be really awesome.  I have the building insurance with them and also the landlord insurance with tenant protection.  I've had to make a claim and they were great.

    Not sure if any insurer would pay for repainting the walls.  AAMI paid for repair and repaint to walls that were damaged (eg had a hole in it).  Walls that just had marks on them were not covered.

    One of the things I had to claim on was the floor coverings (carpet).  The carpets that looked almost new when the tenant moved in were now covered with bleach splotches and some weird pink substance.  I got the carpets replaced because it could not reasonably be called "normal wear and tear" or "poor housekeeping by the tenant". 

    In the event of a claim, I think it is incredibly important that you have a good repoir with the case manager at your insurer, because ultimately this is the person that decides whether or not anything gets referred on to the next level for consideration.

    Jacqui Middleton | Middleton Buyers Advocates
    http://www.middletonbuyersadvocates.com.au
    Email Me | Phone Me

    VIC Buyers' Agents for investors, home buyers & SMSFs.

    Profile photo of louie772louie772
    Member
    @louie772
    Join Date: 2010
    Post Count: 2
    littleaussie wrote:
    JacM wrote:
    littleaussie: who are you insured with?

    We were insured with RACV landlord's insurance but they would NOT cover us for floorboards or rubbish removal or cleaning when the house was trashed. The house needed to be repainted and they would not cover that either. They did pay for the loss of rent though.
    Since then, our new agent has recommended Terri Scheer Landlord's Insurance as they have dealt with them in the past with no worries..
    So now we have RACV for our buildings insurance –  we need building insurance for our loans and they are the cheapest we have found.
    And we have Terri Scheer for our Landlord's insurance which covers contents and rent arreas. That policy also covers you for up to $60000 on your building. In Victoria it costs $275 p/a
    Their building insurance policy is separate from their landlords policy and is too expensive, that's why we kept our building insurance with RACV.
    Hope this is of use to you. If you happen to find any other good insurers please let us know.

    LittleAussie, could you let us know what parts of the Terri Scheer policy you found to be better than RACV?

    The reason I ask is because the Terri Scheer policy specifically excludes claims resulting from scratches or dents and will not cover claims arising from the tenants unhygenic housekeeping (including unclean living habits) and these seem to be the main issues you had with your previous claim with RACV.

    Thanks in advance.

    Profile photo of littleaussielittleaussie
    Participant
    @littleaussie
    Join Date: 2010
    Post Count: 27

    Hi,
    I spoke to Terri Scheer customer service when I was arranging the insurance. I explained my situation at the time and they said that foorboards are covered in their policy as part of the building. (In my situation, the floorboards had gouges taken out of them, as well as scratches)
    Thanks for your comments though as I'll double check that what I was told is still current.

    Profile photo of devo76devo76
    Member
    @devo76
    Join Date: 2007
    Post Count: 542

    One 10 cm scratch. That sounds like heaven to me. Have a read of my thread on the other forum.
    Polished floors scratched scuffed and stained
    painted walls scuffed scratched etc
    kitchen so dirty had to use oven cleaner on everything
    shower black BLACK
    approved for 4 people but had 11 in their.
    Smoke smell is crazy.
    Windows filthy

    all fully renovated when they moved in a year ago.
    Like I said a scratch sounds fine to me

    Profile photo of littleaussielittleaussie
    Participant
    @littleaussie
    Join Date: 2010
    Post Count: 27
    devo76 wrote:
    One 10 cm scratch. That sounds like heaven to me. Have a read of my thread on the other forum. Polished floors scratched scuffed and stained painted walls scuffed scratched etc kitchen so dirty had to use oven cleaner on everything shower black BLACK approved for 4 people but had 11 in their. Smoke smell is crazy. Windows filthy all fully renovated when they moved in a year ago. Like I said a scratch sounds fine to me

    Mine was similar, I wasn't going to go into a lot of detail but this will give an indication of why I was upset that RACV would not cover anything. ( Except the rent)
    The house was renovated prior to the tenant moving in.
    Gouges out of the boards, and the boards were scratched right through the house.  The paint was stained yellow and there were dirty marks all over walls and sugar soap would not remove them. Poo all up the walls, cardboard covering shit and vomit which was dry on the floorboards. Smashed kitchen window. 3 skips of old stinky clothing and other garbage including syringes.  10 mattresses.  Kitchen and bathroom green and black from the filth and mould. The children pulled down the fence and nailed the planks high up in a tree in the back yard. The curtains were ruined, but because they were not ripped my insurance did not cover them. There were no light globes in the sockets when I finally got posession back through a VCAT Possession order. The police had to attend to evict. It took over 3 months to get her out. The first notice was served in April and she was out in September.
    The smell was so bad in the house that I dry reached every time I went inside. It took me 3 months to clean up her mess including  replacing  the fence and window and re- paint the whole house, and do the other repairs. ( A little bit each night after work)
    The woman was a single mum with 5 children. On her application she had 2.
    Where is your other thread? I'd like more info on how we protect ourselves from these people as I could not pass this off as "fair wear and tear"
    Thanks.

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