PM wants to take rent out of bond

F

fisherman

Periodic tenancy - tenants have advised the PM they are leaving early next month. PM has advised that the tenants are behind and have paid some rent after notices but are in financial straits. They are adults and are on govt pensions.

PM has recommended that we agree to the tenants using several weeks of the bond as rent to get them to the end. Pm is worried they might not be able to go if they don't have the money.

We have said no to the substitution of the major part of the bond for rent, but PM is unhappy. What should we do?
 
Bond is bond, rent is rent. As long as they are living there, they pay rent.

Ask the agent if he/she is happy to personally guarntee your losses should the bond not cover the rent, damage and other costs you should endure.

I am guessing they will say no. In which case ask them why would you consider it when they wont.
 
Thanks Dave.

twobobsworth,
Do you think it would be better to give in to the demand to use the bond as rent because they will then leave as they say they will? Why would giving up the owner's rights ensure that?
 
Don't get me wrong, I agree. If they move out of the property and leave it damaged you'll have nothing to fall back on.

Your PM should have clearly outlined their requirements for rent when they provided their notice to vacate. (I asume they've provided a specific date, not just we'll be leaving before christmas so your property is vacant until the new year??)

You may have some professional renters that know all too well by the time you issue your demand letters and stamp your foot, they'll be gone.
 
Never forget that the residential tenancy laws favour the tenant, not the landlord. If they want to leave, then they will have to pay up for all the rent that they owe up to vacating. This does not include the bond - the bond is only there as an insurance if the tenant leaves/causes damage. It is not a substitute for rental unless the tenant has already left.
 
Let your Agent know that there is no way you will consider them using the bond to pay their rent. That bond is there to cover you should they damage your property. If they leave the property in good condition, then they get it all back.

As for worrying that they won't go if they have to pay the last month's rent, well that's just silly, isn't it? If they've given notice, then they have somewhere else to go. I'm guessing that they don't want to pay rent, so they can save this for the bond on the new place. Or they're spending early on Christmas.

Our PM each year gets right on top of the more problematic tenants at Christmas time as it is a regular occurence to have rent arrears during December as it is more important to buy lots of useless crap for everybody else than it is to have a roof over your head.:eek:

It's funny that they had the money to pay for arrears only when they got the notices. If they are on pensions, there are places they can go for assistance if they are having problems. Dept of housing will give a couple of weeks rent, if they show termination notices, Centrelink will provide bonds, various charities will also help with a weeks rent, here & there.

Stand your ground. Oh, get a new PM too, this one sounds useless.
 
Yes Samantha is right, they can go to different groups and request assistance for housing, I think that Anglicare offer this... I have a number of tenants that I have been working with to pay little by little over the past few months to get themselves a week ahead so that when it comes to this Christmas period they are in front. Its so common for tenants to get behind at this time of year.

It is a difficult situation but somewhere there needs to be some sort of efforts made by the tenant to keep paying the rent.

Although if the tenants don't pay the rent, with only 4 weeks to go until they move out it may come down to having to deduct from the bond anyway if they don't pay.

Very frustrating.
 
Worse case insurance will cover unpaid rent. Unpaid water bills and some other costs are not covered so keep the bond for it.

Otherwise you will end up like I have, several useless court orders for payment and having to get debt collectors to try and recover it.
 
Not sure which state you are in, but you should be able to find something like that in your state. http://www.commerce.wa.gov.au/consu...nting_and_tenancy/Tenants/Bonds_and_rent.html

A landlord can ask for a security bond in advance to cover any costs that you may have to pay at the end of a tenancy. This might be to cover any damage you caused to the premises or contents, water charges or unpaid rent.

The bond is your own money and must be held by the landlord in trust until the end of the tenancy. The bond cannot be used by any party or person unless by written agreement or by a court order.
 
This is not uncommon among tenants.

When they know they are leaving they start "saving" the rent to pay for the bond on their new place. They know that by the time the eviction wheels turn they will have left, and usually leave exactly 4 weeks behind on the rent to allow for the bond. Problem is when damage has occured there is nothing left over.
Marg
 
The property is in SEQld.

Thank you to all who took the time to reply. I always find it so positive that people on this site are always willing to share their expertise and opinions. It is very much appreciated.

The PM was advised not to substitute any of the bond and we await developments.

Frankly, I wonder if some agents might churn their tenants to increase their returns. I am not alleging that, just wondering.
 
fisherman said:
The property is in SEQld.


Frankly, I wonder if some agents might churn their tenants to increase their returns. I am not alleging that, just wondering.
Click to expand...

Wouldn't you..if you were the PM?
All they need to do is switch a tenant from this property on their books, to another.
 
kathryn d said:
Wouldn't you..if you were the PM?
All they need to do is switch a tenant from this property on their books, to another.
Click to expand...

If "I" was a PM ? Nope ! I'd have to do more work and not get mpaid anymore.. make up another ad (ok, update the old one etc but still man, more work), take calls, drive to the houe & show applicants, screen their applications, sell them to the owner... I mean, I know how to skim through it really quick now and the owner's dont even notice the difference, but why would I encourage, more work for myself for nothing ?

If I was the owner maybe, don't know sounds a bit short sighted and might not be worth it for an average of $500 odd bucks ? (say 1 wk rent and property condition report whatever, say $700).. then again it's free money, I dont pay the PM's anymore when they do this.. hmm, but then I gotta get them to do it.....
 
jaycee said:
If "I" was a PM ? Nope ! I'd have to do more work and not get mpaid anymore.. make up another ad (ok, update the old one etc but still man, more work), take calls, drive to the houe & show applicants, screen their applications, sell them to the owner... I mean, I know how to skim through it really quick now and the owner's dont even notice the difference, but why would I encourage, more work for myself for nothing ?

If I was the owner maybe, don't know sounds a bit short sighted and might not be worth it for an average of $500 odd bucks ? (say 1 wk rent and property condition report whatever, say $700).. then again it's free money, I dont pay the PM's anymore when they do this.. hmm, but then I gotta get them to do it.....
Click to expand...

You're Jaycee.
I should have clarified, if "someone" was the owner. (I wouldn't actually do it either)
Maybe the PM's get a commission on all new clients?
If they are just switching around tenants on their books, the inspection reports have already been done, when they vacated from another property on their books.

Only people who work in the business really know for sure, and maybe they sign a nondisclosure contract.
 
In VIC it is actually an offence for the tenant to regard any part of their bond as rent, it is a punishable offence, around a $1000 fine. Get your PM to get onto them about the rent. I have one tenant doing the same thing to me at the moment, problem is when they are far enough in arrears to issue them with a notice to vacate for rent arrears that notice will expire on the same day keys are due in...... Get your PM to go for the bluff. It is quite often successful. Advise them that it will cause a black mark on their rental history if they don't pay up their rent, they ABSOLUTELY CAN NOT use their bond as rent and if the house is left well, they willl get their bond back, likely in time for Christmas.

Tenants will do anything for a decent reference as it gets harder and harder to find a rental property - threaten their reference and it may kick them into gear.
 
The PM is unhappy, then I would sack the PM once those tenants are out, he or she aint no PM if they get unhappy with you about the bond situation, stuf that.
I would ask for the rent till they leave, if they use up the bond then how are they going to move into a new house without any money
 
While we have not heard the PM's storey, we have heard what the LL recalls the PM informing what the Tenant said. They are behind in their rent, they are vacating the property, they are in financial stress. As they have a place to go to, I am not reading that they are concerned about a reference. Now to me sounds like this is heading into a no win situation. My reading is that the PM is thinking, they need to keep the relationship as harmodious as they can as they want the tenant to at least continue to look after the place. If they let the tenant have some of the bond, apply to rent, then provided they return the property in a good state, then they can still let the tenant believe that they will walk away with some good name left. Have the tenant feel that the LL and the PM dont care, then their attitude may also go down the toilet, and things get worse. Sometimes the best outcome is the one that is negotiated, not the one that is in the rule book.
 
I agree with Peterw. When we didn't listen to our gut a few years ago, twice in a row with one property, we used the softly, softly approach, gave the tenants notice, but made it as easy as possible for them to move.

Sometimes it can be better to catch a fly with honey than with vinegar.
 
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