My tenant is about 1 month behind in rent. What to do ?

[hwd007]

My tenant is about 1 month behind in rent. Rent payments have been inconsistent for many months. Now can I do both these things together ? and does it make sense. i.e. as follows;

1. Issue notice to vacate due to the rent being over 14 days behind.
2. Issue standard notice to terminate lease ( I understand now 120 days in Victoria )

I have already acted on point 1. above, issuing a request to the property manager to send a notice to vacate to the tenants. So I gather it goes to tribunal if they don't make good on the rent.

Would it make sense to do both of these things together ? I feel I need new tenants, so want to terminate the lease, however if they come good and stay good, then I can always cancel action number 2. above. That way I don't waste time waiting for the tribunal business to drag on over months if the tenants start to play it as a game. i.e. agreeing with new payment conditions or plan from the tribunal, but then reneging on the deal etc...

Anyway your thought's welcome.

 

[WillG]

Get them out of the house ASAP. Get a new tenant asap
You(your PM) can worry about recovering money later. Do you have landlords insurance?

I have had similar problems and the best action was as I have described.


Good luck

 

[Collector]

My tenant is about 1 month behind in rent. Rent payments have been inconsistent for many months. Now can I do both these things together ? and does it make sense. i.e. as follows;

1. Issue notice to vacate due to the rent being over 14 days behind.
2. Issue standard notice to terminate lease ( I understand now 120 days in Victoria )

I have already acted on point 1. above, issuing a request to the property manager to send a notice to vacate to the tenants. So I gather it goes to tribunal if they don't make good on the rent.

Would it make sense to do both of these things together ? I feel I need new tenants, so want to terminate the lease, however if they come good and stay good, then I can always cancel action number 2. above. That way I don't waste time waiting for the tribunal business to drag on over months if the tenants start to play it as a game. i.e. agreeing with new payment conditions or plan from the tribunal, but then reneging on the deal etc...

Anyway your thought's welcome.

It does make sense however i would have done it in reverse, Issue the 120 day notice first, then a day or 2 later issue the 14 day notice.

 

[sparky23]

Once this tenant is out I would also appoint a new rental manager as they should have taken care of this without waiting for you to ask them to.

 

[RightValue]

Once this tenant is out I would also appoint a new rental manager as they should have taken care of this without waiting for you to ask them to.

Agreed!!

You are PAYING them to MANAGE the property in your best interests. Why do you have to direct them to do their job right?? ..

Maybe you should charge them a management fee to manage them!


I suggest you issue the notice to vacate post haste and every subsequent time they are a week late until you can get them out.

I have been too slack and soft in the past and cut people slack ... all it does is prolong the agony. Nowadays, notices are issued a lot faster, it starts the process sooner and keeps the rental arrears that you have to recover (good luck) down.


Good luck with this.

RightValue

 

[Evachange]

Yep, I would be asking the question why did the PM not take action? They should be proactive and deal with the issue ASAP.

You’re in business and this is costing you money, needs to be dealt with ASAP.

I had the situation where a tenant was 3 months behind, but my PM was taking care of things, once the landlord insurance paid out I was actually in front, i.e. got more money then had the tenant stayed, not buy much but only a few $.

Alex Sperling, Dip. FS

 

[hwd007]

It does make sense however i would have done it in reverse, Issue the 120 day notice first, then a day or 2 later issue the 14 day notice.

Thanks all, why the reverse ? just curious.

 

[wish-ga]

When I engaged a property mgr I asked them what their modus operandi was for tenants who are behind in their rent. They check arrears daily and are onto it within days, in writing and on the phone. Made me feel a bit more confident to know they have a drill for such situations.

 

[BV]

1. Issue notice to vacate due to the rent being over 14 days behind.
2. Issue standard notice to terminate lease ( I understand now 120 days in Victoria )
.

Why issue no 2?
Is there a current lease in place?
I'd issue 1 and as soon as he comes good send him a notice to increase his rent by 20%.
That will send him the signal to look for alternative accomodation.
I always increase the rent of bad payers and they usually find something cheaper and leave.

 

[skater]

Why issue no 2?
Is there a current lease in place?
I'd issue 1 and as soon as he comes good send him a notice to increase his rent by 20%.
That will send him the signal to look for alternative accomodation.
I always increase the rent of bad payers and they usually find something cheaper and leave.

LOL! I have a now long term tenant who owed me a large sum, some years ago now. This was in part due to the slack PM. They would pay for a while, then slip further behind. Anyway, to cut a long story short, I changed PM's & increased the rent every 6 months. They are now paying over market and have only just caught up. I intend to keep increasing the rent on this one, in part to make up for the pain they caused me earlier on. When they leave, I'll reno the property & then it should be worth the price they are paying.

 

[Gee Cee]

Good post Skater.

Years ago when I was a bit green i seemed to have slack property managers that seemed to always put me into the same scenerio.
Once i toughened up and realised it was a business and not a charity things changed. As did the agents

Now i want to know what their proceedures are for late payment and when they are going to issue notice to quit etc.

If you are nice once they have you by the B--ls.
Then want more and more lee way.

Sick of that . More towards if they cannot pay they are out.
They usually catch up but repeat themselves soon down the track. Time to issue notice to vacate as soon as behind as well as normal vacating notice.

Gee Cee

 

[hwd007]

OK thanks people for the wisdom.

 

[Kris77]

Issue the NTV for 14 days as you have done, then two days later you can apply to tribunal for a possession order for unpaid rent. Why issue a 120 days notice and allow them 120 days to cause damage to the house? Other thing is the 120 days notice is a "no reason" notice which will be thrown out because there is a reason - unpaid rent. The member will tell you to go back and make another application under unpaid rent. With regards to tenants paying little bits here and there unfortunately the legislation does allow them to do this. You need to sit down and work out what they are paid to by a daily rate, if they paid $300 for example and that takes them to the 20th of the month what date does 15 days from their paid to date take them? Only then can you issue an NTV. Make sense? Most PMs are only doing what they can as far as the legislation allows them to. Blame stupid legislation and the Tenants Union for educating tenants on how to abuse the system. If you cant get the tenants out on a 14 day unpaid rent notice, serve them with a 90 day end of lease notice. Theres no arguing that!

 

[joeExpat]

One of my tenants has been 1 month behind for 5 years. I don't really worry about it, at least he still pays (in arrears). The agent tried to evict I told them not to. Its peanuts in the scheme of things.

 

[Kris77]

Personally I would be concerned about that. What if he moves out and doesnt pay that last months rent? I assume the amount of bond being held is much less than the monthly rental now? So he moves out and the amount he owes is more than the bond, then the PM does the final inspection and theres damage to the property. How will you recoup the money for the repairs and lost rent? Not to mention, the agent isnt getting paid as long as his rent isnt paid. I personally would be finding a tenant who can pay rent on time.

 

[Strannik]

you are supposed to update the bond amount when you increase rent

 

[callander]

you are supposed to update the bond amount when you increase rent

The bond is paid at the commencement of the tenancy. If you increase the rent during the tenancy you cannot take further bond.
http://www.consumer.vic.gov.au/CA256EB5000644CE/page/Listing-RentalBonds-About+rental+bonds?OpenDocument&1=910-Renting~&2=10-Tenants~&3=25-Rental+Bonds~
This is in Vic so may differ in other states.

 

[Kris77]

Yeah, you can do that in QLD, but in VIC you need to apply to VCAT to have the bond increased. Not worth the money sometimes. Its much better to keep an eye on the rental payments and condition of the property.

 

[yonglonglai]

Perth here,

Anyways, since you can't go back to the past and fix this problem this might help you moving forward...

this actually happened to me last month, the tenant over the past few months has been irregular and has been unable to catch up their arrears.

The PM and myself decided to give them the eviction notice. Personally I rather go find a new tenant who can pay than continue having headaches over a tenant who doesn't pay their rent on time.

Since we sent the notice - tenant actually was happy to leave (bonus), however PM organised a payment plan for tenant to pay their arrears and took control of all the bond money... this is still in progress... The PM advertised immediately and managed to find another tenant to move in one week after the 'bad' tenant left.

Helpful Note:
I didn't have rent protection for this particular property and during this ordeal I investigated with the insurance company on whether I can buy some (while the tenant was in arrears). I found out that if the tenant paid up all their arrears I would actually be able to buy the rent protection insurance and be covered for any future rent default (which would have been highly likely)...

The rule simply says that the tenant has to be 'current' at the time of purchasing the rent protection insurance. Hopefully its something useful for people with a not so good tenant and are not currently not insured for tenant default...

As for me, I'm buying rent protection for this next tenant. I rather not have the headache of thinking about 'what to do next'...


Hope this helps