Problem tenants!

Hi everyone

I'm after some opinions on the following... We settled this week on a 4bed townhouse in Sydney. The tenants are on a fixed term lease until 13 December. During the contract period we did an inspection and found:
- there are 4 people (2 couples) living in the property but only 2 people are on the lease
- the place is filthy inside and the yard is very overgrown and full of weeds. It was brand new when the tenants moved in just under 2 years ago.
- they are keeping two small dogs inside despite a pet annexure only allowing them to keep the dogs outside. The dogs are locked in the downstairs tiled areas for a lot of the day when all 4 tenants are at work/uni. There was pooh on the floor in the bathroom and a square of paper on the floor near the toilet also had more pooh on it.
- the tenant let drop that the dogs had peed on the carpet in various areas on a number of occasions.
- the tenant has installed child gates in one doorway and at the bottom of the stairs to keep the dogs on the tiles when they are not home.
- the downstairs areas in particular smelt really bad from the dogs being in there.

The tenants also have a history of being very difficult to arrange inspections with. They insist on being present due to the dogs, as apparently a prior agent let a dog outside when doing an inspection and it ran away (dog shouldn't have been inside anyway!). A final inspection was booked just prior to settlement and the tenant simply failed to turn up, despite having insisted on being present due to the dogs. They didn't call to explain and couldn't be reached. This inspection is to be re-booked, although we still settled.

So...what is our best approach with these tenants? Our PM will now re-book the inspection that should have taken place pre-settlement. Should we:

1. Issue a termination notice for breaches due to 4 people living there and dogs inside? What proof do we need? What happens if they recitify these issues, are we obligated to let them stay until at least the fixed term lease expires? Or
2. Attempt to book another inspection and then issue a warning letter advising of the breaches and telling them to clean up their act and move the dogs outside, and then just not renew the lease in December? Bad time to have the property vacant though?
3. Do nothing for now (that could potentially annoy the tenants) and just not renew in December? Again, isn't this a really bad time to have a vacancy? If so, how can we get around this?

Finally, no matter when the tenants eventually vacate (we are committed to them leaving), can we make a claim from the bond monies for the internal cleaning and deodorising of the property, including carpet cleaning, due to them having dogs inside the property? Can we also claim monies to tidy up the yard? This is all it should really take to get the place back up to scratch (and we would do it regardless).

Sorry for the long post, but being still relatively new to the world of PI I just want to get it right. Thanks.

Angela :)
 
Get them out of there when the lease expires.
You will need to clean it up anyways, before you rent it.
By that time, it should be a more favorable time to lease.
 
Having never bought a house with a sitting tenant, I don't know too much about this. What springs to mind though is that you need to make sure you give them adequate notice that you will not be renewing the lease on 13 December. I am not sure of the notice period in WA but if you have left it too late to give them adequate notice, you need to check with the authority in WA as to what you do now to get them out as soon as possible after the lease expires. Maybe you have to give three months' notice from NOW which would take them into January, which would be a better time to find a new tenant.

I would be inclined to not upset them by issuing a breach notice. You don't know if they will retaliate by letting the dogs onto the carpet or doing something else to get back at you. I would make it quite clear that you need the house empty at the end of their lease (or as soon afterwards as the notice period allows) to do some work. Keep things calm and don't get their backs up because they have the power to damage things.

Sometimes you just have to keep your powder dry and make the best of a situation.

If this was my problem, I would be giving them appropriate notice, and as soon as they are gone, check the house. In Brisbane (and as we self-manage) my mum had some good tenants go bad once they bought their own place and turn nasty. They left it dirty. They moved out Sunday. Monday early we got in, got a cleaning quote from a cleaner, tallied up the cost of new curtains that they had dumped under the house to go mouldy, hoses, ruined carpet squares etc, and lodged the bond claim form that morning.

Because they had not signed the bond form, it was then up to them to lodge their counter claim for the return of the bond. It ended up at the tribunal and they got $12 back from the their bond :p.

I don't know if things happen similarly in WA, but I would be careful to not let on that you plan to claim any of their bond until they are gone. Then get the form in quickly so that they have to fight for anything due to them.
 
What is their rent payment history like? Have they missed any payments?

If it was me I would be more concerned about their payment history. Also if they are subletting I would jack up the rent to skim some of the cream. Also I would ensure my landlord insurance is up to date/adequate and when it came to find a new tenant you had a good cleaner/handyman in the area that can spruce the place up.

I wouldn't worry about going through the hassle/cost of finding a new tenant just because of a bit of a mess.
 
Give them notice to vacate (now) at the end of the lease (fixed term) - You only need to provide 14 days notice to end the lease agreement (up to the last day of the fixed term)


I would say in the notice that they can vacate anytime prior to the end of the lease so long as they give 7 days notice, I would also attach a cleaning checklist to ensure that they return the property back to you the way they got it and the way you want it.
 
Thanks for the replies.

I would be inclined to not upset them by issuing a breach notice. You don't know if they will retaliate by letting the dogs onto the carpet or doing something else to get back at you. I would make it quite clear that you need the house empty at the end of their lease (or as soon afterwards as the notice period allows) to do some work. Keep things calm and don't get their backs up because they have the power to damage things.

This has been my gut feeling as well. The property is in NSW, so I believe the required notice period for ending a fixed term agreement at its expiry is 14 days (counted from the day after the notice is served). Once the fixed term has ended we would have to give 60 days, so we won't be letting it go that long!

...tenants ...moved out Sunday. Monday early we got in, got a cleaning quote from a cleaner, tallied up the cost of new curtains that they had dumped under the house to go mouldy, hoses, ruined carpet squares etc, and lodged the bond claim form that morning. Because they had not signed the bond form, it was then up to them to lodge their counter claim for the return of the bond. It ended up at the tribunal and they got $12 back from the their bond :p. ...be careful to not let on that you plan to claim any of their bond until they are gone. Then get the form in quickly so that they have to fight for anything due to them.

Great advice! Thanks Wylie, will definitely do this.

When the PM finally manages to get in to do the (post) pre-settlement inspection, what should we be doing to help with any future claim on the bond monies? Perhaps take photos of the dogs inside and dirty conditions, plus the overgrown state of the yard (if tenant allows the photos to be taken of course)? Should we still get the PM to send them a general warning letter (not a breach notice) about the state of the premises, the extra tenants and the dogs inside? At least then we are on record that we have at least identified the breaches...but I'm still worried about upsetting them!

Angela
 
What is their rent payment history like? Have they missed any payments? ...Also I would ensure my landlord insurance is up to date/adequate and when it came to find a new tenant you had a good cleaner/handyman in the area that can spruce the place up.

Advice via the vendor's solicitor was that payments are up to date, but we never did get to see a copy of the ledger pre-settlement. Previous PM's file should have reached our PM late today, so I will know for sure by Monday.

We have a landlord's policy through Terri Scheer, which would appear to be adequate.
 
Give them notice to vacate (now) at the end of the lease (fixed term) - You only need to provide 14 days notice to end the lease agreement (up to the last day of the fixed term)

I would say in the notice that they can vacate anytime prior to the end of the lease so long as they give 7 days notice, I would also attach a cleaning checklist to ensure that they return the property back to you the way they got it and the way you want it.

Sounds like a good idea. We could use the original condition report as a basis for our cleaning checklist - let's hope it has photos with it, as the property was brand new at the time.

My only reservation is whether having a vacant property in say November (if they left earlier) is a good or bad time for finding new tenants as compared to just ending the agreement when the fixed term expires on 13 December? If any PM's wish to provide their experience in this regard that would be great.

In relation to subsequent tenants, what do people suggest is the best term for a new lease - 6 or 12 months? (yes, I am a little gun shy now) 6 months would mean a possible vacancy in winter (~June), isn't this a bad time to find new tenants?
 
Your subsequent post reminded me of how important the photos were in the trip to the tribunal. I watched the "judge's" face when we handed the photos over and I felt quite certain at that moment that mum would win. Photos certainly are worth a thousand words.

The tenants said "we cleaned the place really well" but the photos told a different story.

Of course, the tenant's smart attitude towards the "judge" sealed their fate.

So definitely get photos of anything that you are not happy about, anything that is dirty or damaged.

A few times when we have wanted tenants out sooner than the lease deadline, we have put the situation to them along the lines of - "Because we really need to get the house empty to paint (or whatever reason you given them) if you find another suitable rental house before your lease expires on December 13, we will not hold you responsible for the costs that are usually associated with finding a new tenant".

This means they can start looking earlier than they might otherwise and has worked well for us in the past.

I am not sure whether you should have a letter issued saying you are not happy with the extra tenants and/or dogs inside because I don't know whether this means you have acknowledged they have breached the lease, but have not asked them to remedy the breach. Perhaps a tribunal would take that as your "approval" and whilst I am not sure, I would be careful with that one.
 
More great advice Wylie! Thanks heaps for the reply. Hubby and I have been chatting about our 'plan of attack' and based on the great suggestions on this thread this is what we think we will do:

1. Have our PM do the inspection, with the main aim being to take photos to record the current poor condition of the premises both inside and out. Hopefully also get a photo showing the dogs inside.

2. Issue a standard notice of termination to end the tenancy as of the date the fixed term lease expires. Attach a cleaning checklist to our notice (maybe with the original condition report photos attached) to convey our expectations in this regard when they vacate.

3. Include in the notice an offer that they can vacate sooner by giving a minimum 7 days notice and not incur any of the usual break lease fees. This would help us if they leave sooner then 13 December, so we don't have a vacancy so close to Christmas.

4. The day they vacate take fresh photos (if the cleaning has not met our expectations and as per the original condition report) to document any issues. Obtain quotes to clean inside and out, perhaps including a reference to removing the 'dog smell' - this should be recoverable as dogs were not allowed inside.

5. Lodge the bond claim form asap and hopefully succeed in recovering some of the bond monies.

6. Get the place cleaned up asap and find some new tenants! (hopefully with the lease starting and ending at a more favourable time then the current one does).

Any further comments/ideas are still very welcome, but thanks everyone for the suggestions!

Angela :D
 
Don't just get the carpets cleaned, get a company that specialises in urine treatment and charge the tenants for this. If you just get it cleaned the smell will get worse, the right tretment is need to remove the urine.

Also remember to get inside and out treated for fleas after.
 
Your landlord's insurance won't cover you for any damage done prior to your purchase. They will only cover subsequent damage. I am sure you allowed for the dirty state of the townhouse in your purchase price.

Insurance can't be backdated and you have no claim on damage done before you owned the premises.
Marg
 
Thanks for the tip seashell1, I hadn't thought of that.

Sounds like we will need quotes to clean up the yard, clean inside, clean the carpets including the urine issue, deodorise inside to remove the doggy smell, and spray for fleas. We will get all this done whether we can recover any monies from the bond or not. At least then we are starting fresh. Have I missed anything?

Your landlord's insurance won't cover you for any damage done prior to your purchase. They will only cover subsequent damage. I am sure you allowed for the dirty state of the townhouse in your purchase price. Insurance can't be backdated and you have no claim on damage done before you owned the premises.
Marg

Hi Marg. Thanks for the comments. I hadnt really thought of this but it makes total sense. Most of the 'damage' though should be easily resolved by a thorough cleaning like mentioned above (fingers crossed). I guess if the tenants choose to maliciously retaliate to us not renewing their lease we would then be covered by our insurance. You are right re: the purchase price - I had worked out how much I thought it would cost us to get everything back up to scratch and was still happy to proceed based on the competitive price we paid.
 
Would any PM's out there have any comments or advice on the plan of attack we have outlined in post #11 on this thread?

We still have reservations (due to inexperience) about whether having a vacant property in say November (if the tenants leave early) is a good or bad time for finding new tenants versus just ending the agreement when the fixed term expires on 13 December.

We are also still just a little unsure as to whether we should be going on the record regarding the current breaches, or just ignore the breaches and go with our current plan? Wylie raised an interesting point in this regard...

I am not sure whether you should have a letter issued saying you are not happy with the extra tenants and/or dogs inside because I don't know whether this means you have acknowledged they have breached the lease, but have not asked them to remedy the breach. Perhaps a tribunal would take that as your "approval" and whilst I am not sure, I would be careful with that one.

Suggestions would also be great on whether the best term for a new lease is 6 or 12 months, or alternatively ways to ensure leases expire at an attractive time of year for finding new tenants? Please let me know if there are other posts on the forum on this point already that I may have missed (I had a look), so I don't re-hash old material.

Thanks again. I really appreciate the help.

Angela :)
 
Hi Angela.

Apart from what I have posted, I would say that ANY time is a good time to find a tenant, but if you can avoid that month over the Christmas that would be better. There are just less people wanting to move right then. We did get a call to rent during Christmas lunch one year, and they looked at it and signed up on Boxing Day, so it does happen.

Don't forget that you don't have to offer six or twelve month leases. If we rent something in say September, we would offer a four month lease and tell the tenant that should we both be happy with each other by then, we would provide another lease in January for twelve months at the same rent (or whatever you decide - maybe six months at the same rent and then a $10 per week increase for the following six months - although we have never done the half way through increase ourselves).
 
If they have a good payment history, I'd just issue them a notice to address all those issues.

The dogs probably just belong to one person in one of the couples, maybe the other couple is annoyed at the dogs too and would love a reason to pressure them to get rid of them.

In a share house the diffusal of responsiblity works against you. Why should couple A do the lawn when Couple B aren't doing it and vice versia. When pointing out the lawns and that they need to be done I'd also offer them 'you can have a fortnightly mow service for only and extra $5 per person per week! (i.e. $40 per mow)'.
 
The dogs probably just belong to one person in one of the couples, maybe the other couple is annoyed at the dogs too and would love a reason to pressure them to get rid of them.

When pointing out the lawns and that they need to be done I'd also offer them 'you can have a fortnightly mow service for only and extra $5 per person per week! (i.e. $40 per mow)'.

Hi David. If only you could see our tenants with the dogs...I think it would be fair to say that these 2 dogs are like surrogate children to the couple whose names are on the lease, and to even ask them to move them outside where the pet annexure allows would almost certainly be a deal breaker. Unfortunately the other couple, who as you suggest may well be annoyed, aren't even on the lease so their objections would be somewhat diluted.

I'll keep the mowing idea for our next tenants. Thanks for the suggestion. :)
 
A final inspection was booked just prior to settlement and the tenant simply failed to turn up, despite having insisted on being present due to the dogs. They didn't call to explain and couldn't be reached. This inspection is to be re-booked, although we still settled.


Don't make that mistake again. Given that it's a house and therefore most likely costing you cash every day you own it, it would have been better to delay settlement until the inspection could have been performed. The Vendor would have been then obligated to hustle up the Tenant, not you.....assuming of course you put a clause in the Sales Contract to allow you to conduct a thorough inspection just prior to settlement.....did you do that ??


Advice via the vendor's solicitor was that payments are up to date, but we never did get to see a copy of the ledger pre-settlement. Previous PM's file should have reached our PM late today, so I will know for sure by Monday.


Another crucial piece of information you should have received prior to settlement, other wise you get into this "I've alrady paid rent in advance, I don't owe you anything.". Have you got it yet ??


In WA the pet bond is a maximum $ 100.00, which isn't much for cleaning up and spraying for fleas etc after animals. Don't know in NSW if you can use the normal bond if the pet bond isn't enough.
 
...assuming of course you put a clause in the Sales Contract to allow you to conduct a thorough inspection just prior to settlement.....did you do that ??

Yes we did have a clause. We had also done an inspection of the property 10 days prior to settlement. Having said that I totally agree that we took an unnecessary risk by not delaying settlement subject to a satisfactory final pre-settlement inspection.

Another crucial piece of information you should have received prior to settlement, other wise you get into this "I've alrady paid rent in advance, I don't owe you anything.". Have you got it yet ??

Our PM has the file and we are discussing the contents tomorrow. I realise I sound very ignorant at this stage but the verbal assurances I received were from parties in the area representing my interests (with me in WA).

In WA the pet bond is a maximum $ 100.00, which isn't much for cleaning up and spraying for fleas etc after animals. Don't know in NSW if you can use the normal bond if the pet bond isn't enough.

I don't believe there is a pet bond in NSW, at least not in my (limited) experience. Perhaps a NSW PM could confirm this for me? My understanding is that I can claim against the normal bond.
 
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