PM expectations, PM fails to have tenant sign lease, tenant now asking for discount

DavidMc

DavidMc

I 'leased' a property to a guy for $680pw in Gladstone. Move in date in 6-8 weeks. This was my asking price. The property is taken off the net and we wait.

A few weeks later the tenant asks if he can have it for $600pw. This is when I find out the PM didn't have the new tenant sign a lease. She said she asked him to but he didn't because he didn't know his move in date.

I have a history of these PM's never wanting to put the tenants out in any way, or hold them to their obligations, yet I am always asked to commit and keep my word.

To be fair, $600pw could probably still be considered an OK rent as the market has dropped a little since, but now I'm losing out on the extra $80pw because the PM didn't make the tenant sign.

What should be my expectations here? Should I be angry at this PM for not getting the tenant to sign?
 
Not necessarily straight away without more information. It could be that the PM reasonably pressed the tenant to sign and was fobbed off. In that situation the PM probably should have kept you informed, but they aren't necessarily completely incompetent.

I would be keeping a very close eye on things from now though - but its probably best to just focus on dealing with the situation as it sits now. Blame can be later.
 
I wouldn't be happy with the PM, but here is a suggestion:

Have the PM sign up the tenant at $680pw for 12 months but with a 6 week free period at the end of the lease. This equates to approx $600pw over 52 weeks. (eg $680 x 46wks =$31280 is equivalent to $601 x 52 wks)

The benefit of this arrangement is that your rental amount will be at $680pw at the end of 12 months so you can either keep the same or increase from this amount. Otherwise it will be difficult to jack the rent to $680+ in 12 months from a base of $600pw.
 
Wait of 6 - 8 weeks is hard to fathom. I like JoeD's idea, but also maybe advertise it for $650 and try to find a tenant that can take it in two weeks?

Then sack the PM.
 
Here many agents, including myself, do not remove advertising until the lease is signed and either rent/bond paid and this must be completed within 24-48 hours.

No advertising time is lost for the landlord, and the tenant knows that if they don't hold up their end the property will be passed to the next suitable tenant.

I'd be p*ssed if my agent hadn't got the lease signed and cost me $80pw or lost me a good tenant by removing the advertising.
 
Look to meet half way.

You want $680p/w they want $600p/w... $640p/w?

Then again, you mentioned market has moved since then... what would the property achieve in the current market? If it's $600p/w then sign the tenant up straight away and lesson learnt. Could be a better result then re-advertising and have $0 rent for few weeks.
 
Lil Skater said:
Here many agents, including myself, do not remove advertising until the lease is signed and either rent/bond paid and this must be completed within 24-48 hours.

No advertising time is lost for the landlord, and the tenant knows that if they don't hold up their end the property will be passed to the next suitable tenant.
Click to expand...

I manage my own rentals and learn't this very lesson the hard way. I accepted an application, the tenants verbally agreed on a start date, I removed the advert as I was still receiving quite a few phone calls. I sent off the rental contract to be signed and then waited... after 2 days I figured something was up so I rang them. They said they found a more suitable place.

Lesson learned, don't stop receiving applications or remove advertising until a contract is signed. Good idea about the time limit Lil Skater
 
I also always would take a one week deposit and get them to sign the lease before removing the advert. If they could not sign on the day (hubby away, only one can sign etc) then the week's rent I'm holding covers that week I might lose if they change their mind.

I've found if they are happy to part with a $500 deposit towards their first week's rent, they are pretty keen to rent the place.
 
Sooooo I need some clarification.

Is the property vacant now?
If you put it back up for advertising what rate would be the going rate?

I'd probably be risking it and pulling their bluff and saying its going back for lease and he can apply with the rest of them. Your PM should pay for the readvertising as it should never have been taken down if there was no lease signed.
 
Hi all - thanks for your replies - great stuff.

Yes, I don't have a lot of power in this situation as the Gladstone rental market is currently in massive oversupply. 8% vacancy rate. $600pw would probably still be an OK rent today as rents have dropped again. $680pw was a 'good' rent and it would be difficult to rent it out again for this amount.

The property is currently empty but still being paid for by the previous tenant who moved out early. The new 'to be' tenant has not moved in yet.
 
Our policy and it seems to be fairly standard across the board in Brisbane is to have the tenants pay two weeks rent within two days of acceptance and their bond just prior to moving in.

The deposit is their acceptance of the terms and conditions so is legally as binding as signing the lease. We also put pressure on our tenants to return the lease as soon as possible.

I further what another person added; we never remove the advertisement until that money is paid, protecting our landlords etc.

Hope it all works out for you.
 
KathrynF said:
Our policy and it seems to be fairly standard across the board in Brisbane is to have the tenants pay two weeks rent within two days of acceptance and their bond just prior to moving in.

The deposit is their acceptance of the terms and conditions so is legally as binding as signing the lease. We also put pressure on our tenants to return the lease as soon as possible.
Click to expand...

Just a word of warning - there is specific legislation around taking and then holding deposits for rentals in QLD.

One such limitation is that the tenant must have viewed the lease agreement and terms and conditions for that specific property and terms prior to paying the deposit. They then have 24 hours in which to pull out and get their deposit back.

The landlord is limited in what they can claim, for example I understand that a tenant will get that deposit back in court if they can show that their change of mind didn't result in a real loss to the owner in the amount of the deposit etc.

The only fail-safe way to secure the tenant is to have them sign the lease and pay the full bond, and two weeks rent as soon as possible.

Matt
 
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