How likely is it that I will get my rent and expenses that is owed

[Chandy]

Hi,

My property is managed by a real estate agent. The tenant owes 2 months of rent, he was a month behind and gave notice and has now moved out. They have chased him for the money and he keeps saying he will transfer it and then doesn't.

He left the house in quite a mess and we needed to get a cleaner in and do a tip run with all the rubbish he left behind (broken down washing machine even).

The real estate agent states that we need to go to the tribunal to get the bond money and they can only give me the rent money out of the bond if he signs it over. (he now has been saying that the agent can do it this way but I cant see him signing it over).

What are the chances of him being made to pay the thousands of dollars that is owed

If we go to tribunal and we win, whats to say he is going to pay it all up?

 

[HotRod]

Hi,

My property is managed by a real estate agent. The tenant owes 2 months of rent, he was a month behind and gave notice and has now moved out. They have chased him for the money and he keeps saying he will transfer it and then doesn't.

He left the house in quite a mess and we needed to get a cleaner in and do a tip run with all the rubbish he left behind (broken down washing machine even).

The real estate agent states that we need to go to the tribunal to get the bond money and they can only give me the rent money out of the bond if he signs it over. (he now has been saying that the agent can do it this way but I cant see him signing it over).

What are the chances of him being made to pay the thousands of dollars that is owed

If we go to tribunal and we win, whats to say he is going to pay it all up?

How'd he get two months behind???

I think the court can sign the bond money over once it gets to that point.

He can be paid to pay it, but might only be like something ridiculous like $25 per month and you have to keep on chasing hm if he doesn't pay up.

The agent should have breached the tenant once he was a day overdue and then gone to the tribunal a lot earlier, not let an end of lease peter out into this mess.

 

[Luv2Travel]

How'd he get two months behind???

Easy if the tenant cried "poor me" at tribunal and were allowed to stay in property and then having to wait for another tribunal hearing when they continue not to pay, as expected. All I can say is good luck seeing a cent, with the laws largely in favor of tenants, no matter how bad they are. Best thing to do to avoid these sorts of costs is have a very good insurance policy in place.

 

[callander]

The agent should apply to VCAT within 10 bus days of the tenant vacating for a VCAT order for the full arrears amount & the bond.
Once you have the VCAT order any amounts still owing above the bond can be put in the hands of a debt collector or claimed from your landlord insurance. The agent should also lodge the tenant (once they have the VCAT order showing amount owing is higher than the bond) on the tenancy database so no other landlords end up in the same position.
I have had success with tenants paying what is owed due to the tenancy database listing, they paid in full as they could not get a property to rent due to the tenancy database listing.

 

[Chandy]

Thanks for your responses

He owes 2 months rent because he got 1 months behind and was chased and sent letters etc, then handed in his 28 days notice, therefore be the 2 months.

I do have insurance, but I recently just changed providers due to re-financing this property and they the bank wanted the insurance increased, so I found a better deal and used a different company, now its going to look suss on my part!

 

[mattysavager]

The insurance shouldn't be a problem - as long as your agent can demonstrate that the tenant was not in arrears when you took out the policy.

Insurance is your best bet.

Take the tenant to VCAT (if the property is in VIC) - they can award the bond without the tenant's agreement. They can also make an order that the tenant pay $xx as final restitution.

Once that has been issued, you can claim on your insurance for that exact amount (less any excess of course). Hopefully your Landlord insurance is not with a bank, as your excess will typically be almost identical to the claim!

If your insurance doesn't pay out, you may be able to register the debt with the next court in your state. In QLD it's the Magistrate's court, but not sure in VIC. To do that, you'll need the tenant's forwarding address which can be tricky to get.

Good luck!

Matt

 

[kathryn d]

If you need to get a court order, and have their wages garnished, do it.

Today we received 3 cheques from our Sheriff (Canada) for a total of $800.
Might not be a lot, but I'm sure it pisses the ex-tenants off
Next month we will get more.

We have one guy who voluntarily pays us $10 a month. I don't care how long it takes.

 

[Lil Skater]

Regardless of the 28 days, your agent still should've issued a 14 day notice and went to VCAT.

Get your agent to apply to VCAT immediately for all outstanding. Even if the tenant agrees to sign over the bond, your insurance may require the VCAT outcome to pay all outstanding costs.

You can lodge them with NTD/TICA but be aware you must provide the notice BEFORE listing the tenant that you will do it and they (unfortuantely) can challenge the listing.

Take it to a debt collector if you can't claim on your insurance.

 

[fisherman]

Someone recently posted a tenant debt collection service by Dunn and Bradstreet or similar that cost $55 PA and included locating the offending ex-tenant.

I can't locate it through search but others may remember it.

 

[Sez]

Sounds like your PM dropped the ball. Your tenant should have been served a notice to vacate after 14 days in arrears despite the 'poor me' tales. An application should have been made to VCAT for possession of the property 3 business days after that and you should have had a hearing within about 3.5 weeks of arrears.

Go to VCAT and have your PM lodge a claim for all cleaning, rubbish removal, loss of rent, damage, repairs & rent owing. Talk to your insurance agency and make sure your insurance will still cover the rent arrears even though correct notices were not issued by your PM.

There are several debt collection agencies that can act on your behalf. It costs money for various actions to be taken. Last time I checked it was around $200 - $300 for the VCAT order to be transferred to a magistrates order meaning that the debt was then on their credit rating and attracted interest for 10 - 15 years (I can't quite remember it's been some time!). It does mean that they will have a bad debt listed if they go for a car loan or house loan in the future. 90% of tenants don't pay even with the debt collectors BUT 90% of my landlords who have taken this path do it simply for the warm and fuzzy feeling they get thinking about the tenants face when their car loan is refused......

 

[fisherman]

[cut]

.. 90% of tenants don't pay even with the debt collectors BUT 90% of my landlords who have taken this path do it simply for the warm and fuzzy feeling they get thinking about the tenants face when their car loan is refused......

I know you most likely had your tongue in your cheek when you wrote that.

However tenant damage and lost rent, and absconding without paying monies owed, can send an owner to the wall. The bank, City Council, tradesmen and others will not see any humour in the owner not being able to pay his/her way.

PMs who shrug their shoulders, informing owners to 'suck it up', are lazy and unprofessional. They are part of the problem and never a solution. My PMs and I would like to have a word with those who didn't take action against some of the destructive frauds that managed to come our way without any record of their past wrongdoing.

Again, I know you were indulging in wry humour, so please do not take this reply as being directed at you, but rather as taking the opportunity offered to argue the compelling case for taking action against offenders as a matter of routine, not as an exception. Why should good tenants have to pay higher rents to cover for offenders anyway?

 

[Sez]

I know you most likely had your tongue in your cheek when you wrote that.

However tenant damage and lost rent, and absconding without paying monies owed, can send an owner to the wall. The bank, City Council, tradesmen and others will not see any humour in the owner not being able to pay his/her way.

PMs who shrug their shoulders, informing owners to 'suck it up', are lazy and unprofessional. They are part of the problem and never a solution. My PMs and I would like to have a word with those who didn't take action against some of the destructive frauds that managed to come our way without any record of their past wrongdoing.

Again, I know you were indulging in wry humour, so please do not take this reply as being directed at you, but rather as taking the opportunity offered to argue the compelling case for taking action against offenders as a matter of routine, not as an exception. Why should good tenants have to pay higher rents to cover for offenders anyway?

I agree with you 100% - the only time I have had to guide a landlord through this sort of turmoil is when I've taken over a portfolio which wasn't being managed. Inspections hadn't been done at properties for 2-3 years rent arrears out of control etc. I spoke to all of these landlords, listed tenants on databases to record their past wrong doings so that other owners wouldn't be stung in the process. I door knocked to collect cash from them and contacted their family, friends and called them at work (with the information on their applications) to try and collect money. I always had more success than the debt collectors. The main reason (you're right, tongue in cheek) the landlords chose to use the debt collectors is because of the long standing consequences for their actions.

I agree that a landlord should never be told to 'suck it up'. They should also always prepare for the worst - I think a large part of being a PM is risk management. Make sure they have landlords insurance and that your PM is authorised to claim on their behalf because they can handle the destruction first hand and unhindered while keeping the LL in the loop. Unfortunately there are costs involved for the LL (again) to engage the debt collectors so not all landlords are willing to forward that money at an already financial tight situation.

I didn't take it personally it's ok, I do agree . I know that I always work hard to do the best job for my landlords and make it hurt as little as possible while I take all of the stress. Sometimes a little dry humour is needed to lessen the blow .

 

[brettc]

I do have insurance, but I recently just changed providers due to re-financing this property and they the bank wanted the insurance increased, so I found a better deal and used a different company, now its going to look suss on my part!

Was the tenant up to date with their rent at the time you changed your insurance?

 

[fisherman]

Sez,

Thank you for your very civil reply and explanations which I agree with of course.

The good PMs must end up with a heap of work where they take on the unsuccessful results of self management (some owners can do that well) and from owners exasperated by less diligent agents.

 

[Sez]

Sez,

Thank you for your very civil reply and explanations which I agree with of course.

The good PMs must end up with a heap of work where they take on the unsuccessful results of self management (some owners can do that well) and from owners exasperated by less diligent agents.

Any time .

Yes, I would say that 90% of my absolute nightmare situations that I've had to figure my poor landlords out of were either self managed (rented to a friend of a friend) or really, REALLY poorly managed previously. It's hard work and I never want to go back to a landlord and tell them that their last PM was rubbish and put it all at their door too, so I take the approach of "we can only work forward from where we are now, this is what I recommend we do". Thankfully I now have very few nightmare scenarios but still have that experience to fall back on.

 

[Ausprop]

I took a claim all the way, my lawyer wanted me to do it for experience more than anything. It was relatively straight forward - the courts will help you understand the process. my repayment time was about 10 weeks which the registrar said was a good outcome (2 years after the judgement mind you). it costs very little to conduct a means enquiry to find out whether they really have anything worth chasing or not. the process of serving and the court hearings etc I expect is enough to embarrass some people enough for them just to settle - just depends how hard core they are. You will have to do all this work yourself tho as the sums are too low to pay a lawyer

 

[Deltaberry]

That's why some of us buy commercial.

 

[PrimeProperty]

If you don't have Landlord insurance then I think your chances of seeing the balance of the funds is slim at best.

It would appear from the information provided that your agent may have dropped the ball in note serving the correct notices for non-payment on a timely basis (this may also affect your LL insurance claim as well).

If the agent has dropped the ball i would ask them to run the court case FREE of charge, I would expect that you would be awarded the bond in full, in relation to the other funds you may get a judgement in your favor but actually getting the funds from the tenant and enforcing the judgement is difficult at best.

You may have to chalk this one up to experience. If you are seeking good landlord insurance policies - I would recommend EBM or Terri Scheer Insurance.

 

[MelbGal]

It would appear from the information provided that your agent may have dropped the ball in note serving the correct notices for non-payment on a timely basis (this may also affect your LL insurance claim as well).

If the agent has dropped the ball i would ask them to run the court case FREE of charge

^^^^^^^^good suggestion