PMs "forgot" to chase up lease renewal

[gronk007]

Hi Everyone, not sure if I'm being overly harsh here, but I got this email back in March in relation to trying to get happy tenants to renew a 12 months lease...

"The rent increase was sent out to the tenants and will take effect as of 9/5/2012.
You should have received a letter in the mail about this.

The tenants have also confirmed that they would be happy to sign a new 12 month lease.
I will send the new leases out to the tenants for their signature. You should receive them in the coming weeks.

Have a great long weekend!"

I expressed some concern in early June that the lease still hadn't been signed, and I got this...

"In relation to the lease renewal, we cannot force a tenant to sign a new lease. The tenants have been reminded to sign this and return it. When they do however is up to them. They have every intention of signing the new lease and once they have returned it we will forward this onto you."

"Oh and by the way the tenants have complained about rats, do you want us to send our maintenance people to bait up the place?"

Am I missing something here - they're primary job is to keep tenants in the property and renew the lease when viable - isn't that the reason why they charge me a re-letting fee - don't even get mt started on the rat issue - when we eventually spoke to the tenants, they said they told the PMs weeks ago...

Adrian

 

[matto_]

time to change PM's?

 

[Lil Skater]

It's true that they can't force the tenant to sign at lease, but at the very least I would've expected a follow up.

The process I would usually follow in a lease renewal is to send out the lease, follow up within 7 days if it hasn't been returned. At which point they would have a further week to send it back in, if it is not received contact the landlord to inform them that the leases are yet to be returned and that I'd keep chasing the tenants.

Most agencies don't have any follow up procedures in place when it comes to renewals, which is not fair as many will charge you a re-leasing fee as soon as the lease is drawn up (whether it's signed or not). Personally, I think re-letting fees are a load of bull and I wouldn't charge them in my own agency.

New PM is needed, and make sure you know the agencies procedures for renewals, arrears, maintenance and all the other fun stuff.

 

[beachside]

Sounds like my current PM in Qld

I don't know what state yours is in (and I don't mean rat infested), but you could adapt what I do to your the laws in that state.

In Qld tenant must give 2 weeks notice to leave (if at end of lease/periodic), but poor old discriminated landlord has to give 2 months notice for tenant to leave.

What I have been doing since tenant biased laws came into affect is:

2 months before lease expires have agent issue a notice to leave (effective end of lease).......WITH AN EXPLANATION (if tenant is going to be offered a lease renewal) that this is withdrawn/NLA once a new lease is signed and returned at least 28 days prior to lease expiring (which gives agent time to advertise if not returned/not being renewed). Basically this allows me to dictate the conditions of their tenancy rather than vice versa - because if tenant does not give notice to leave at end of lease and I have not given them notice to leave their tenancy becomes periodic (no fixed lease) with potential for tenant to up and leave when it suits them with only 2 weeks notice.

This (or similar - subject to the laws in your state) should prompt your tenants to sign a new lease if they want to stay. But rats????.....I smell tenant problems if you don't have such an issue.

 

[tpw]

I should have fired my PM as well, when the lease was up I told her to ask for a renewal but she said tenants won't sign unless rent was dropped. She says tenants probably won't leave. 4 months later, in the middle of winter, tenants give notice.

Spoke to PM the other day, she said should have insist on new lease or kick tenants out. Why didn't she said that previously! Now I'm saddled with an empty property during a quiet period.

Hmmm... OK, I think it's difficult to find a good PM.

 

[knightm]

What I have been doing since tenant biased laws came into affect is:

2 months before lease expires have agent issue a notice to leave (effective end of lease).......WITH AN EXPLANATION (if tenant is going to be offered a lease renewal) that this is withdrawn/NLA once a new lease is signed and returned at least 28 days prior to lease expiring (which gives agent time to advertise if not returned/not being renewed).

Beachside u r a genius - this is the answer for qld landlords.

 

[knightm]

Hmmm... OK, I think it's difficult to find a good PM.

Actually I think after all the commotion of the buying, renovating etc settles down this is the hardest and most important aspect to long term real estate investing. When ips are interstate its even more important.

 

[travelbug]

Hi Everyone, not sure if I'm being overly harsh here, but I got this email back in March in relation to trying to get happy tenants to renew a 12 months lease...

"The rent increase was sent out to the tenants and will take effect as of 9/5/2012.
You should have received a letter in the mail about this.

The tenants have also confirmed that they would be happy to sign a new 12 month lease.
I will send the new leases out to the tenants for their signature. You should receive them in the coming weeks.

Have a great long weekend!"

I expressed some concern in early June that the lease still hadn't been signed, and I got this...

"In relation to the lease renewal, we cannot force a tenant to sign a new lease. The tenants have been reminded to sign this and return it. When they do however is up to them. They have every intention of signing the new lease and once they have returned it we will forward this onto you."

"Oh and by the way the tenants have complained about rats, do you want us to send our maintenance people to bait up the place?"

Am I missing something here - they're primary job is to keep tenants in the property and renew the lease when viable - isn't that the reason why they charge me a re-letting fee - don't even get mt started on the rat issue - when we eventually spoke to the tenants, they said they told the PMs weeks ago...

Adrian

Where is the bit where they "forgot".
I don't see an issue. They sent the paperwork. They said they reminded them. As they said- they can' force them to sign.

What is it you expected them to do?

I similarly said my tenants could sign a new lease but wasn't concerned if they didn't. I forgot about it until last month was charged $30 for lease renewal. This was 6 months after they asked. I didn't want a 12 month lease from now as I want to put the rent up before 12 months. I rang the agent and they said it was the original lease (from 6 months ago) so there is 6 months left on it. But they don't charge the fee until the tenant signs.
Fair enough.

 

[boomtown]

Just kick the tenants out if they won't sign and get new ones.

 

[murph14]

I remember being asked to follow up on tenant who we hadn't received a lease back yet after 2-3 months. Called him, knew I had to be quite firm. He cracked the ***** at me, went and whinged to the owner, who tells him they don't mind if he doesn't sign the lease. WTF??? Why we were even managing his property, I have no idea.

Not really relevant, but there are oodles of hopeless owners too.

Anyway, sounds like your current guys are pretty slack. As my old colleague used to say, you have to threaten the tenants with death, or they'll walk all over you.

 

[gronk007]

If I dump the PM and self-manage (we get along well enough with the tenants and we are 2kms down the road) nothing changes with respect to the bond being held is there?

I just expected the PM to lock in the tenants for another 12 months with the same vigour I expected they would have....any tenants out of lease and on a month to month basis represent a risk to me.

 

[Lamingtons]

You get a bond change form to get the bond signed over from the REA to you. It was really easy to do and they would prepare the form.
This is from memory when I bought my PPOR with existing lease and self managed for the remaining 6months of lease term.

 

[travelbug]

I remember being asked to follow up on tenant who we hadn't received a lease back yet after 2-3 months. Called him, knew I had to be quite firm. He cracked the ***** at me, went and whinged to the owner, who tells him they don't mind if he doesn't sign the lease. WTF??? Why we were even managing his property, I have no idea.

Not really relevant, but there are oodles of hopeless owners too.

Anyway, sounds like your current guys are pretty slack. As my old colleague used to say, you have to threaten the tenants with death, or they'll walk all over you.

Why is the landlord hopeless if they don't want a new fixed lease? Or is it different in Queensland? I'm happy for my tenants to go onto a periodic lease. At least that way I can put the rent up when I want (with notice of course) and I'm not stuck with a 12 month lease that I may want to change before 12 months is up.

If you don't know why you are managing a property I certainly don't.

 

[SeafordSunshine]

Dear Gronk

"Oh and by the way the tenants have complained about rats, do you want us to send our maintenance people to bait up the place?"

Dear Gronk,
I have an IP in Sydney city council area, I had the Rat issue, tenants claimed to be 'scrupulously' clean.
I asked the nice Council rat inspector to inspect the area and she found the streets around (plenty of restaurants) being well kept and gave me a written report (My council rates at work!!)
I went back to the tenants, requested them to get their own bait, as the photos of their scrupulous cleanliness included food scraps in the kitchen sink among other things...
I hope you don't have my old tenants!
I Hope this helps
Cheers Seaford Sunshine

 

[units4me]

NONE of my tenants are ever offered renewed leases. They all go on month to month after the initial lease expires. Why should I pay for a lease renewal fee?

Many have been on month to month for years.

If they want to go, they can find a way to break lease anyway.

 

[murph14]

Why is the landlord hopeless if they don't want a new fixed lease? Or is it different in Queensland? I'm happy for my tenants to go onto a periodic lease. At least that way I can put the rent up when I want (with notice of course) and I'm not stuck with a 12 month lease that I may want to change before 12 months is up.

If you don't know why you are managing a property I certainly don't.

Not saying it's because of that. In fact there is so little difference between fixed and periodic nowadays it wouldn't bother me as an owner either. The idea is if the tenant is so adamant on periodic then it's feels like the tenant has no intentions of staying for long. The way I see it is the responsibility of the PM is to help reduce the chance of lost income, which means getting a fixed term agreement in place.

 

[beachside]

Not saying it's because of that. In fact there is so little difference between fixed and periodic nowadays it wouldn't bother me as an owner either. The idea is if the tenant is so adamant on periodic then it's feels like the tenant has no intentions of staying for long. The way I see it is the responsibility of the PM is to help reduce the chance of lost income, which means getting a fixed term agreement in place.

If your tenant moves out without notice and it takes a while to find a new tenant, good luck recovering from your insurance company for loss of rent without a fixed term contract!!