overdue payments....what to do ?

hi,

we have a problem with our commercial property tenants. They are very behind on their water bill payments....now owing about $11000. They are always a bit late on rent but we always get each month's. The Pm has sent them a warning letter 2 months ago (warning eviction if no payment) but still no payment received regarding the water.

Just bit of background....there is no current lease, It expired 2 yrs ago and though we encouraged them to exercise a new one they didnt. To complicate things further the person running the business isnt the person the was orginally on the lease.....seems like that guy has disapeared and subleased the property to the current person.

i have contacted a solictor for advice but am still waiting for a phone call back.....is it normal to wait more than 2 days for a reply ? wondering whether this solicitor is too busy or whether i should just be more patient.

your advice appreciated !
thanks
 
Who's name is the bill in? Is it just in their name, or is it in your name and they pay it?

If it is in your name, the late payments will be damaging your credit rating.
Marg
 
the water bills are all paid by us ...hence all have been paid. but the tenant has not paid us back for the water usage part which is the majority of it .
 
your situation seems out of control. so a guy has subleased without your permission - in fact there is no lease so its a moot point. what garuantees and bonds do you hold?

you really need to get on top of this. Read all the posts by Dazzling and TPFKAD... that'll give you an idea of what level you need to be operating at. Leases, bonds and gaurantees (worthwhile ones) are everything.
 
there is no current lease, It expired 2 yrs ago and though we encouraged them to exercise a new one they didnt.
"encouraged"???? :confused: And you've allowed them to stay for two years without a lease? What on earth were you thinking?

Oh, Dazz, I can't wait to see your response to this one... :D
 
We were guided by our PM that the market at the time was tough and if we were to ask them to leave when they refused to sign new lease then we may have trouble reletting the place.

i was under the impression from the PM that though lease expired....that it has goen into periodic lease. (like residential ? or is it not the case with commercial ?)and hence they still are liable to pay us what is due ?
or do u mean that since no lease...they are not liable for anything ?

we have 2 months bond which is registered with the bond authority. can we tap into this for unpaid water and rent?

do i have to give them any notice or just go in and change locks ?????
 
eyespy - you have quite a lot of work to do, to gather the basic knowledge that will be necessary for you to reasonably hold and oversee this asset that you own, whilst trying to extract a decent return from it.


My only suggestion is to seek professional advice and knowledge immediately.
 
As mentioned.

Go in change the locks.

Also try to put additional locks or padolcks on the doors.

The tenant really has few rights and will have to fight you for what is inside .. like all their business.

Let them have access only if they have a court order or they pay you the back rent and either move straight out or sign a new lease and pay rent in advance.

Also, as mentioned seek good advice from a lawyer experienced in commercial property .. one who have worked on situations like this before.

good luck, you're gonna need it.

RightValue
 
water owing is $11000....its 4 quarters of bills....
there was a leaking pipe behind the wall previously which now has been fixed which caused the higher water bills.
 
I'd be wondering what the terms of the sublet would be - was there a formal written arrangement between the original tenant and the new one?
 
water owing is $11000....its 4 quarters of bills....
there was a leaking pipe behind the wall previously which now has been fixed which caused the higher water bills.



ohhhh ... this is where it could get messy.

Who is responsible for this the tenant or the landlord?

It should be stated in the lease to the original lessee.

If it is an industrial property then 99% it should be the tenant, however if it is a commercial (office) or retail property then it could be the landlords responsibility for the maintenance and you may well be liable for the excess water bill.

Get legal advice.

cheers

RightValue
 
In summary:

Line up another tenant. You can turf the tenant immediately on principal but this isn’t a currency your bank will accept against your interest payments. Your tenant is paying rent, but given their snubbing of your request to pay water, this could stop at any point also.

Get a lawyer to advise you what you need to do to terminate. In the absence of a lease one may either be construed from either the prior one, or your and your tenants interactions since. You will also be met with resistance, apathy and belligerence from the tenant throughout the termination process so it’s important that your lawyer can explain all the steps required to you.

Learn as much as you can about commercial leases and make sure your next tenant is on one. You’ve essentially had a paying squatter for 2 years.
 
Sounds like you need a tougher PM. A good PM plays a major role in a successful investment.

I had a soft PM that got bullied by my tenants and subsequently, it left me a whole lot of mess (not as bad as your case though!).

Your tenants are running a business and a business is tough to move. You should seriously get these people on a lease. Then again, now that they owe you $11000, they might just move on and leave you out of pocket.
 
Get a lawyer to advise you what you need to do to terminate.

.....but if that advice includes writing constant letters back and forth (what else can lawyers do ??) and playing lawyer tennis for the next 10 months, with them tearing up the letters in your face....what are you going to do ??

Finally getting on the court circus and taking another 6 months before getting an order and then another month for the bailiff to pull his finger out.....my only question to you is - can you afford to take that advice for the next 17 months without a jot in rent ??

At that point, the bailiff will simply change the locks and slap a one page notice saying any access must be via yourself. Your Tenant can easily leave 80 tonnes worth of his stuff in your Premises. What are you gonna do with all that ?? If it includes vehicles you won't be able to move without his permission. Back you go to your lawyer with another round of letters and submissions.

If he's vindicative - most vicious Tenants turn that way when they have the upper hand with the wet sop Landlord for so long and then slowly lose control over the years due to court orders slowly trickling through.


You will also be met with resistance, apathy and belligerence from the tenant throughout the termination process

Eyespy - you can be absolutely guaranteed of those three, plus more. You are starting from a losing position already. S/he has you completely over a barrel and has done for a very good while. You have no negotiating position whatsoever.



Forget lawyers mate - you are so far beyond their help. It's bobcat / truck and locksmith time.
 
.....but if that advice includes writing constant letters back and forth (what else can lawyers do ??) and playing lawyer tennis for the next 10 months, with them tearing up the letters in your face....what are you going to do ??

Finally getting on the court circus and taking another 6 months before getting an order and then another month for the bailiff to pull his finger out.....my only question to you is - can you afford to take that advice for the next 17 months without a jot in rent ??

At that point, the bailiff will simply change the locks and slap a one page notice saying any access must be via yourself. Your Tenant can easily leave 80 tonnes worth of his stuff in your Premises. What are you gonna do with all that ?? If it includes vehicles you won't be able to move without his permission. Back you go to your lawyer with another round of letters and submissions.

If he's vindicative - most vicious Tenants turn that way when they have the upper hand with the wet sop Landlord for so long and then slowly lose control over the years due to court orders slowly trickling through.




Eyespy - you can be absolutely guaranteed of those three, plus more. You are starting from a losing position already. S/he has you completely over a barrel and has done for a very good while. You have no negotiating position whatsoever.



Forget lawyers mate - you are so far beyond their help. It's bobcat / truck and locksmith time.

Fully agree. I have been treatened by the lawyers from the buyer/s and tenants. But when I did (take procession) and took my property back. They were all worried and appologize to me. I do not really care about these lawyers -- take care of the dates that is all you need.
 
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