A tenant is subletting my property!-Victoria

Hi guys,
I have a smart tenant who thinks it’s his right to sublet my property. He has moved out of the property and has started to do short term accommodation for backpackers They are making good money off me and I want it to stop. I have never given him consent to do so. I have issued him with a 14 day eviction notice but that notice will not effect him personally unless I lodge a VCAT form which I intend to do as well as. So essentially he will just be removing his name from the lease form. He is the only person on the form and no other backpackers names are on the form. Unfortunately they have a key and comes past the property every couple of days to collect the rent in cash.

As the legal option seems to be time consuming, my question is if I went and changed the locks on the property and provided the current tenants with a key, with these be deemed as illegal?
If he called the police (and I hope he does) can anything actually happen to him?
Can I take all his bond for wear and tear on the property?
Thanks in advance for you help.
Alternatively if you know any good solicitors please advise.
PS I have Googled room housing board house etc. However it never talks about the consequences to the tenant.
 
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.... is making good money off me and I want it to stop.

Sounds like he has found a way to squeeze more cf from your property... Sack your pm and cut a deal with this guy.
 
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Look at this as an opportunity.

Get him to pay you half the profits (or 60/40 is probably better since you are taking the risk.)

Win-win.

Then you can hopefully do the same thing with your other properties since he seems to know what he is doing!
 
Until you get a court order he would be the tenant, so changng the locks may be an issue. Get some legal advice before doing this.
 
Not sure that he's a smar#ar$e, but he certainly seems to be very smart.
It will be interesting to watch his entrepreneurial career unfold.
Some great truly great entrepreneurs tell stories like this about their early years.

Kudos to him!
 
Terry,
Thanks for your advice.

I will wait until the 14 days is up and then do it.
In the process of getting legal advice as well.
Will get the tenants to give me the rent directly.
What will be the ramifications to me after that?
 
Terry,
Thanks for your advice.

I will wait until the 14 days is up and then do it.
In the process of getting legal advice as well.
Will get the tenants to give me the rent directly.
What will be the ramifications to me after that?

Are you self managing?

Do you have a documented lease agreement with the "smart ****"?

I see a world of hurt coming your way if you proceed contrary to your obligations and your current tenants rights.

Rooster
 
Not sure why most are supporting the tenant subletting to backpackers?
Maybe it would be considered smart, if it were legal...

Sure you can get more money doing that, but you get damage and premature deterioration of the property too.
Probably the reason the OP didn't rent directly to backpackers in the first place.
 
Yes I am self managing.
This only happened in the last 6 – 8 weeks because we check the property regularly (obviously ever 2 months is not enough)
Yes I do have a lease agreement with the person who is subletting the property only and not the 5 other people in the property.
My intention is not to kick the tenants out until they have found suitable accommodation & put I will put up the rent until they move. They are all on week to week agreements with the guy subletting the place.
This guy is not paying tax on this and your saying that a world of pain will come to me. I cant understand why?
What can he do to me? Why can he complain? He does not live in the property.
Alternatively put the rent up until they move out
 
Yes I am self managing.
This only happened in the last 6 – 8 weeks because we check the property regularly (obviously ever 2 months is not enough)
Yes I do have a lease agreement with the person who is subletting the property only and not the 5 other people in the property.
My intention is not to kick the tenants out until they have found suitable accommodation & put I will put up the rent until they move. They are all on week to week agreements with the guy subletting the place.
This guy is not paying tax on this and your saying that a world of pain will come to me. I cant understand why?
What can he do to me? Why can he complain? He does not live in the property.
Alternatively put the rent up until they move out

You need to read your tenancy act.
Follow the rules.
If you don't understand something, I'm sure there is a contact phone number for assisstance.
 
Property in Brisbane was sublet by tenant to 35 (yes, 35) overseas students. Apparently bunk beds everywhere. Sub-letting tenant taken to Court by Council/Govt and fined $35K.

Probably still came out ahead.

First thing I would do is report this guy to your local Council and also the Fire Services. There are strict laws regarding backpacker accommodation in most States since the Childers fire.
Marg
 
This guy is not paying tax on this and your saying that a world of pain will come to me. I cant understand why?
What can he do to me? Why can he complain? He does not live in the property.
Alternatively put the rent up until they move out

Because you have to follow the law - issue all the notices at the appropriate time - lodge what you need to lodge in a legal manner.

You cannot just go in and change the locks and kick him out without following proceedure.

I'd suggest that this guy probably knows the tenancy act back to front, and knows exactly what you can and can't do. Follow the law.
 
Thanks for your feedback everyone.
I found this below.

14-DAY NOTICES TO VACATE
Assignment or sub-letting without consent: The landlord can serve the tenant with a 14-day Notice to Vacate if the tenant assigns or sub-lets or purports to assign or sub-let the premises without the landlord's consent (s.253) (see: "Sub-letting", above).

Secondly he does not live in the property and I dont intend to kick the current tennants out.
 
nice work, just cutting out the middle man ;)

Just be careful that the you are allowed to use your premises for short term accommodation and meet all fire regulations, council rules etc.
 
Good result

If you are going to retain the tenants you'll need to consider services like power and comms as well as furniture

I was looking at an ip in Perth where the owner had cheaply maximized the number of bedrooms converting the 4 bedder to 6 and let it out room by room to backpackers for 150/week each.

Occupancy fluctuated between 4 - 6 rooms so his total rental was 600-900/week

Not bad considering it sold for 760k... My offer was 740k
 
I had this happen for quite a few years with my terrace in Redfern. My tenant would sub-let the rooms. He'd be behind in rent even though the people he sub-let to had paid him rent.

The answer is get the tenant to vacate and make the building attractive enough for a family or single city worker or couple on decent income to rent. This might mean renovating the bathroom/and or kitchen, repainting interior etc.

Often when you have a better class of tenant they won't be sub-letting to backpackers.

The whole experience did put a few ideas in my head about bunks in bedrooms with me letting to backpackers. Brought back memories of cheap backpacker accommodation when I lived in Tsim Tsa Sui in Hong Kong for about 3 months. 4 double bunks in one airconditioned room. Another 2 double bunks in a smaller room. One bathroom cleaned twice daily. One small tv room with ironing board. No kitchen.

I reckon I could get 4 people in one large room at Redfern and 2 people in each of the other 2 rooms for a total of 8 people at $150 each ($1200/week). Not too bad.
 
Terry,
Thanks for your advice.

I will wait until the 14 days is up and then do it.
In the process of getting legal advice as well.
Will get the tenants to give me the rent directly.
What will be the ramifications to me after that?

Once you get a court order (or tribunal) for possession of the property it should be ok to change the locks and to enter into new agreements. Don't know about getting the sub tenants to pay you rent directly as you have an agreement with the tenant as do they.
 
I don't think it's a good idea to change locks without resolving the dispute first. 5 angry backpackers - if they can't get to their stuff, they will most likely smash windows to get in. They're not on a lease so have no consequences.

Depending on how many people he has living there - he is probably breaking the Council by-laws for number of occupants. This isn't such a big deal, the council is usually pretty slow.

I would be extremely concerned about the fire regulations. If that place burns down and you are aware of the tenants living there (which you are), and you self manage (which you do), then the onus is on you to have that place fire safe. If the bedrooms are being let as "student accommodation" rather than a whole house to one tenant or a family, smoke alarms are usually required in EVERY room and in the common areas. Even if they're not on separate leases for boarding house accommodation, and while you know about it, you are seen to be allowing it to happen.

This one is what I would be most worried about. if you don't want to kick the backpacker tenants out then you need to ensure that this is compliant for student accommodation/Boarding house. Otherwise if something happens, the lawsuit could be for millions. Go to a smoke alarm provider, and take the liability off yourself.

Also - Do yourself a favour and get the Rolls-Royce of Landlord Insurance Policies. Tell them it is for student accommodation and just pay the extra preumium. If the dodgy head tenant decides to do something terrible, you may not be covered by average-joe landlord insurance.

Matt
 
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