My R/E agency has a legal divison as part of their operation so I'm sure they know what is legal
Lease Break – 6 months into 12 mnth lease. Landlord cops 50%
- Thread starter toony
- Start date
My R/E agency has a legal divison as part of their operation so I'm sure they know what is legal
legal vs enforceable may not be defined sufficiently for the tribunal(?)[sup]note:1[/sup]My R/E agency has a legal divison as part of their operation so I'm sure they know what is legal
chasethesun said:
If the TENANT vacates the property prior to the lease expiry date or is evicted for cause the TENANT shall pay re-letting fee of one and one/half week rent at the current rental rate and all advertising and associated costs including and not limited to cleaning and repair and taxes.
need:: excludes want, excludes eviction and there are likely many problems with this rephrasing tooWe also add
The tenant shall obtain and provide proof of tenant insurance within fifteen(15) days of the signing of this lease, and at each lease renewal, in a coverage amount acceptible to **Company Name**. **Company Name** shall be listed as person of interest in the insurance policy to be informed on its cessation or amendment
Tenant insurance is a pearl in the insurance world, covers landlord butt from much that the tenant does, is cheap as. Insurance brokers provide a duplicate card for the landlord [sup]note:2[/sup]1: How violently socialist are the tribunals, Ours makes Marx look like right wing
2: here in the dark frozen North (where caribou hit you in the back of the head)
3. links to Do I need Tenant Insurance 1 Do I need Tenant Insurance 2 for Aus
Its the liability cover that makes it useful
I have similar wording in my lease too under special conditions -
...a re-letting fee of no more than 1.5 weeks rent and reasonable advertising costs.
Have a guess who i am going to call tomorrow?
It aint going to be Dazz and Almost Bob and the others who suggested I am ........ for not having an in depth knowledge of the legislation etc......
Dazz and Almost Bob may have been harsh and hurt your feelings.
They also took time out and gave you a wealth of information.
Hopefully this will make you a better investor.
I'm sure Dazz and i know we (AlmostBob and I ) have made mistakes.
Trying to help you, so you only make the same mistake less often,seems to be wasted on an ungrateful person.
What help - showing me a copy of the Canadian Tenancy Act and then banging on about tenant insurance which is a foreign concept here in Australia which only causes more confusion.
Dazz has also deleted his messages. So there was not much help there was there?
No, showing you the relevent Act that applies.
You wouldn't be looking at SA Residential Act if you have properties in Victoria.
As far the Tenent Insurance...Almost Bob is Australian and born in Victoria.
When we took on IP's in Canada he informed himself about all the relevent regulations for our province, as they are ALL different.
We have been to Court several times and needs to quote, on occassion, the relevent parts to the Judge. The judge then nods his head and agrees with him. He is polite and he comes across as knowledgable and well informed.
We have won many a case because he knows the Act so well.
What else has your PMs done to you in the last 13 years, that may not be in your best interests.
You should be more concerned because the other PM you asked, agreed with your PM. These PMs don't care who pay them, as long as they get paid.
Nothing. I have reviewed and questioned them as I work with the PM's.
Agreed. We all have vested interests. Once you understand what motivates people (and its ususally their source of income) you can see where there may be issues and clouded actions.
Thanks for asking the question toony.
Email Reply from PM
This is the email reply from my PM......
Your letting fee as per your agreement with us is for one weeks rental letting fee. The clause that indicates ''up to 1.5 weeks"' will depend on the authority with a client. Your authority is that we only charge you one weeks rent. The tenant pays a pro rata figure and as there was six months of the lease unused - a pro rata figure is charged accordingly. The pro rata figure is calculated as one weeks rent plus gst, divided by 12 months and multiplied by 6, (this is the unused portion of the lease agreement that the tenant has broken). This is the amount the tenant is liable to pay, and the landlord pays for the amount the tenant has already used in the lease.
If you tried to charge a tenant the full amount and they took you to VCAT it will be charged at a pro rata figure by a registrat, so rather than charge any owner for a VCAT hearing and an appearance fee for our time to go, it saves all parties a lot of money.
I hope this makes sense to you - otherwise please feel free to call me,
<End of Message>
..........
Personally, I would prefer to charge the tenant the whole one week rent (as i reckon thats whats in the Special Condition). The tenant is also unlikely to take me to VCAT. But it looks like the PM has interpreted the special condition in the same VCAT would.
Comments?
This is the email reply from my PM......
Your letting fee as per your agreement with us is for one weeks rental letting fee. The clause that indicates ''up to 1.5 weeks"' will depend on the authority with a client. Your authority is that we only charge you one weeks rent. The tenant pays a pro rata figure and as there was six months of the lease unused - a pro rata figure is charged accordingly. The pro rata figure is calculated as one weeks rent plus gst, divided by 12 months and multiplied by 6, (this is the unused portion of the lease agreement that the tenant has broken). This is the amount the tenant is liable to pay, and the landlord pays for the amount the tenant has already used in the lease.
If you tried to charge a tenant the full amount and they took you to VCAT it will be charged at a pro rata figure by a registrat, so rather than charge any owner for a VCAT hearing and an appearance fee for our time to go, it saves all parties a lot of money.
I hope this makes sense to you - otherwise please feel free to call me,
<End of Message>
..........
Personally, I would prefer to charge the tenant the whole one week rent (as i reckon thats whats in the Special Condition). The tenant is also unlikely to take me to VCAT. But it looks like the PM has interpreted the special condition in the same VCAT would.
Comments?
Interesting thread toony. I have never heard of this pro rata way of allocating expenses, like you I have never incurred any fees when a tenant broke a lease in the past (only happened once) but your thread made me have a closer look at the latest lease documents. They are a little ambiguous, mentioning that in the event of a break lease the tenant will be responsible for 'reasonable' expenses, no mention of a pro rata system. If I hadn't read your thread I wouldn't even be questioning the wording, would just assume that they mean we as landlords have a duty to find another tenant quickly so as not to leave the tenant in the lurch for rent, but now I wonder.
One more question to put to any new PM (or even the current one for that matter). Thanks for the heads up.
One more question to put to any new PM (or even the current one for that matter). Thanks for the heads up.
In my own mind, reasonable would be pro-rata, but maybe I'm too generous... I wouldn't have a problem paying a pro-rata amount. If the tenant chose not to renew their lease in 6 months you'd be up for the full letting fee anyhow, so you're no worse off by paying a pro-rata amount by the tenant leaving early in regards to the letting fee. I don't know what the law is now after reading this thread, but I wouldn't be spending too much time fighting for it because a) I think it is reasonable for the owner to contribute and b) I don't know what your weekly rent is, but even if it's $400, half that is $200 which is a tax deduction so what are you out of pocket... a little over $100?, I don't think it's worth it to spend too much time (especially if this is a grey area), and definately not worth going to court over.
About 15 - 20% of people invest in some form. Less than 1% of people retire on an income above $50,000. Why do you think that is?
They're too busy reading legislation and learning everything about everything to spend more time making money?
Toony,
your pm needs a booting
pm made a decision, outside of the agreement, in contradiction of the terms of the written lease, to save you money?
it cost you money
every time they save you $5(maybe) they are going to bill you for the privelege $10?
Way back I wrote in this thread that it would be reasonable if the Act were written that way, the Vic RTA is not written that way, the lease terms apply, other property owners have posted to the effect they have never paid fees for a tenant breaking a lease
The pm really **expletive deleted****expletive deleted****expletive deleted** ( <-- that was a bad one ) took a lot upon themselves to interpret the actions of the registrar, in contravention of the written lease and written Act.
pm decision, outside of your instructions, I don't see any amount for which you should be responsible
That you don't know of tenant insurance, its existance or what it covers, speaks more to lack of available information than lack of application, insurance companies dont advertise, yet it does exist in Australia and is greatly to the landlord benefit, the links posted in that prior response may prove useful if not to you, then to someone else.
your pm needs a booting
pm made a decision, outside of the agreement, in contradiction of the terms of the written lease, to save you money?
it cost you money
every time they save you $5(maybe) they are going to bill you for the privelege $10?
Way back I wrote in this thread that it would be reasonable if the Act were written that way, the Vic RTA is not written that way, the lease terms apply, other property owners have posted to the effect they have never paid fees for a tenant breaking a lease
The pm really **expletive deleted****expletive deleted****expletive deleted** ( <-- that was a bad one
) took a lot upon themselves to interpret the actions of the registrar, in contravention of the written lease and written Act.pm decision, outside of your instructions, I don't see any amount for which you should be responsible
That you don't know of tenant insurance, its existance or what it covers, speaks more to lack of available information than lack of application, insurance companies dont advertise, yet it does exist in Australia and is greatly to the landlord benefit, the links posted in that prior response may prove useful if not to you, then to someone else.
Toony,
your pm needs a booting
pm made a decision, outside of the agreement, in contradiction of the terms of the written lease, to save you money?
it cost you money
every time they save you $5(maybe) they are going to bill you for the privelege $10?
The pm really **expletive deleted****expletive deleted****expletive deleted** ( <-- that was a bad one
The PM I use is a very well regarded agency in the area with a large network in Bayside Melbourne. I am very comfortable with their actions. Though I may not necessarily agree with their interpretation, they know VCAT better than I do. In the 13 yrs they have managed this property, because of good tenant selection, I have never been to VCAT for this property.
I am familiar with contents insurance ie. as a renter you insure your contents. But what is tenant insurance? How does it benefit the landlord?
Sim
Administrator
It's called Landlords insurance and there are a couple of providers around.
I use: http://www.cgu.com.au/cgu/personal/Pages/landlords-insurance.aspx (requires an insurance broker)
Also: http://www.terrischeer.com.au/ are specialists in this area.
Other insurers now offer this too - Google "Landlords insurance" to find them.
CGU have an optional cover called "Rent default and theft by a tenant".
CGU policy booklet said:
For a broken fixed term lease, the tenant is generally responsible for the costs of re-letting, advertising and loss of rent, at least up to the amount of their bond (naturally these things need to be verified with your relevant state tenancies legislation), but anything above that should be covered by the optional insurance cover up to the insured amount.
Im sure AlmostBob is as much or more Australian than you.
He was born and educated in Victoria. Served his country for 17 years.Moved overseas with his son to be with new wife and her family.
We have raised 4 children for the last 8 years. We are returning to live in September.
I am also of Australia descent..and I don't appreaciate being accused of trawling.
Nobody gives a fat rat's **expletive deleted** for the tenants property,
I carefully did not write contents insurance or landlord insurance,
I carefully wrote tenant insurance
The most useful portion of a contents policy is the liability coverage, get a copy and read it, or talk to a broker, Insurance council of Australia.
What if:love what ifs); your tenant goes to sleep with the aroma therapy candle burning, and burns down your flat, and the rest of the building that you don't own,
I'm Australian
&
I had read my lease before 13 years had passed
I know what my employees and agents do,
I carefully did not write contents insurance or landlord insurance,
I carefully wrote tenant insurance
The most useful portion of a contents policy is the liability coverage, get a copy and read it, or talk to a broker, Insurance council of Australia.
What if:
love what ifs); your tenant goes to sleep with the aroma therapy candle burning, and burns down your flat, and the rest of the building that you don't own, I'm Australian
&
I had read my lease before 13 years had passed
I know what my employees and agents do,
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