Property Manager not overly proactive in chasing rent

[aijii]

Hmm - wouldn't I able to serve them a NTV with the termination date being that of the end of the lease under section 261 ?

"Reasons for at least 90 days notice to vacate
Please note – if you give notice under S261 or S262 in the case of a fixed term tenancy, S266 of the Act states that the reasons for a 90 day notice cannot be used to shorten an agreed fixed term tenancy agreement.
A notice given under S261 cannot be used to retaliate against tenants exercising their legal rights or saying they will do so.
261(1)&(3)(a)–end of a fixed term tenancy of 6 months or more
we have a fixed term tenancy agreement of 6 months or more which ends on the termination date.*
262(1)–tenant no longer eligible
you are no longer eligible to rent the premises from the landlord which is a public statutory authority."

I guess my questions are:

1. if you were in my shoes, would you offer them an opportunity to break the lease NOW with no penalty to see the back of them ?
2. would you do the NTV and potentially VCAT dance
3. would you just stick it out and if possible just kick them out at the end of the lease ?

Monopoly: can't see where it says you can't serve them the 120 days notice whilst the lease is still active (provided you aren't shortening the lease) ?

 

[argentina]

I would be doing a bit more research before offering them a break lease option. Find a new PM and check out what the rental demand is for your property. Many areas of Australia there are tenants wait listed for properties. I don't see the point of allowing your tenant to break lease and then having the property sitting vacant for months. Better to receive some rent (even if it is late).

However, the notice of demand for payment should be issued if they are 14 days late. If you ever do find yourself at the tenancies tribunal (that's what we call it in south australia) you want to make sure everything is done "by the book" from your end. Have you been told by your PM how much it is to attend the tribunal. The fee for us was only $55 and that included our PM attending. I did not attend at all. I think I would be doing my own research. Call the VCAT (I am assuming that is the name of the tribunal in Vic) and find out what the wait time is to get the matter heard and what costs are involved from their end.

I would certainly not renew lease at end of term. too much stress with this one.... I would be looking for a new tenant.

 

[Lil Skater]

Hiya Buzz!

No, I don't get anything for keeping my rent arrears to a minimum, I don't know any agencies who do.

As with the 120 day NTV and almost any NTV, it can be served whilst the tenancy is still active, but cannot expire before the fixed term expires.

Also means the 14 day reciprocal notice for the tenant cannot be used, unless there is a mutual agreement between the landlord and tenant.

 

[murph14]

I think that email reflects the sweet bugger all rights of a landlord and how that extends to the actions of the PM religiously working to the laws of the Act to enforce your non-existent rights.

Your PM is slack, obviously. Tell her to step up and that she needs to let him know that:

1. It is unacceptable to be late beyond the 5th.
2. If he can't pay by then, let her know so they can negotiate a payment plan. Newstart and Rent Assistance are available for exactly his situation and deductions should be made automatically.
3. If he fails to pay by the 5th and can not or will not agree to going on Centrelink, she has no option but to commence negotiations to terminate the tenancy whether through mutual agreement, NTV, VCAT, etc.

1. if you were in my shoes, would you offer them an opportunity to break the lease NOW with no penalty to see the back of them ?

You have to consider how long it will take to find a new and good tenant. Can you afford to pay the mortgage for the length of time to oust him + have the house in suitable condition for new tenants + find new good tenants?

2. would you do the NTV and potentially VCAT dance

If you are just sick of it, the NTV is not worth it. Take it to VCAT.

3. would you just stick it out and if possible just kick them out at the end of the lease ?

If you can tolerate a bumpy ride then yes.

 

[Lil Skater]

Hi Murph,

If ever a payment plan is to be put in place it is best to go to VCAT. This is because VCAT can put an order in place for the payment plan.

A case in which I tagged along with went a little like this -

We went along as we gave the tenants a 14 day NTV for rental arrears, and obviously the tenant didn't cooperate. Since day one the tenant had been in arrears and unfortunately at VCAT the member was way too lenient on the tenant (they had their case worker and community groups etc. tag along and give a huge sob story ). The tenant was allowed to stay, put on a payment plan, but a condition of this was if the tenant fell into arrears at any stage in the next 6 months the case could be reopened at any stage and they would get the boot.

Which is much more than an agreement with an agency can do.


Now if Aijii did offer them to break their lease without penalty it may work out a bit better for him in the end (sorry Aijii, not sure if you're a him or her?!). Which is why I think the PM would suggest letting the tenant break lease without penalty, it means they don't have to go to VCAT or do any further work and keeps the peace. It also may mean the tenant may not hold a grudge towards the PM/landlord on vacate and leave the property in a better condition, plus Aijii wouldn't have to pay for VCAT charges.

It would mean Aijii would miss out on any rent due to the vacancy between the old and new tenants, but this would happen either way if the tenant is kicked out by VCAT and the property may not be left in a good condition.

 

[aijii]

Lil Skater - Aijii is a play on "agey", my nickname/short for Adrian

Out of interest - what does a payment plan actually constitute ?

Just say i'm owed $3000, but lease isn't over yet. How do they factor in the amount already in arrears but when the tenant still has to pay monthly rent ?

Wouldn't it also be in the PM's interest for me to release as they get another letting fee ? (although the task of reletting the property would be given to another PM)

Hmm..

 

[Lil Skater]

Ah, learn a new thing every day! Hi Adrian!

Basically a payment plan would allow the tenant to repay a certain amount on top of the rent each week/fortnight/month (whatever) to pay the arrears off in a timely manner and at a "fair" price for both parties. Only problem with a payment plan is that it might only be $100 per week because this may be seen as the only "affordable" amount for the tenants, you know, after smokes and booze. Not so fair on the landlord if it takes a year to pay off, huh?

The current PM would only get a letting fee if they leased the property, not if you give the re-letting (unless you mean management) to a new PM. If you were to let the tenant break lease without penalty I suggest taking management from the current PM straight away, why would you want to pay a company who isn't doing their job?

If going down the VCAT route though, stick with the current PM until it is done. As I said, some agencies seem to forget details of the tenancy and cause you emotional stress and financial strain even more, they can be vindictive like that.

 

[aijii]

hmm.... so if they put him on a payment plan for a year, and the lease is up in September, can I give him a NTV for the day the lease ends ? Does he still pay the money once he's out ?

i don't want to be forced to keep him in there just fort he sake of a payment plan...

 

[Lil Skater]

i don't want to be forced to keep him in there just fort he sake of a payment plan...

Not at all, the payment plan will stay in place once he has vacated the property until it is paid up.

 

[aijii]

Okay...

So we issued an NTV on the 3rd after the PM had a lengthy conversation with the tenant and the tenant basically said:

1. he only had $1K that he could pay (of the 1300 due)
2. his next centrelink payment was due on the 16th
3. he didn't know if he would be able to pay his rent on time next month

The PM said the tenant sounded genuinely as though he was in "struggle town", however that really isn't my problem at the end of the day (I do feel a little bad, but that won't get pay my mortgage.

He paid the $1000, and then my PM emailed me yesterday to say he was going to take the balance of $304 into the office to pay by hand.

I'll be following up today to make sure that happened, however it's interesting what the fear of an NTV can do....

11 days till the rent is due again. I'm sure there will be more fun and games then

PS - I'll be issuing an 90-day NTV for the end of the lease and be changing PMs.

Thanks again for all your feedback!

 

[YLC]

I agree you shouldn't sweat the small stuff - HOWEVER, you should find out what the PMs policy is for rental payments and how they chase them up.

The PM should be checking their arears daily (or every second to third day depending on how many properties they manage). Personally I give the the tenant a reminder call on day one. Obviously I'm not harsh, just hey how you doing by the way your rent is a day late, what's happening? Usually they will have paid by bpay in which case I say just remember it takes a few days to clear etc.

On the 7th day we issue a final notice, on the 15th (as it's 14 full business days before I can) I issue the 14 day NTV. You don't actually have to go to VCAT (in Vic) to evict the tenant on arears as they can choose to leave willingly from this notice, although most will put up a fight which means you'll find yourself in court and one that normally favours the tenants at that.

You are one of the few pro-active PMs out there. Glad to know that not all PMs are slack with their job.

 

[YLC]

This is the first time I have heard of this.

Question for Lil' Skater, if you are willing to share, is part of you remuneration calculated like this? Have you heard of PM's being remunerated in this way?

Worked for a RE agency. This particular agency pays bonus to PM for rents collected on time. The RE is one of the big franchise.

 

[buzzlightyear]

YLC, are you willing to share how much, how it was calculated?

 

[Lil Skater]

Thanks YLC, I like to think I'm fairly on top of everything too.

 

[Sez]

Tricky situation!

This is a little tricky, I am a PM in VIC so I can see the problem from both sides!

First, let me say that although applying and going to VCAT can be a long process it can also be totally worth it! Before it gets to VCAT though you do have a few options. It sounds as thought your tenant knows how to play the rent game with the act in Victoria but all is not lost.

1 - If your tenant still has over 3 months left of their lease then ask your PM to send your tenants a 90 day notice to vacate for the end of fixed term lease. This requires the tenant to vacate at the end of their lease, yes your property will become vacant but it gives you the opportunity to find a good tenant who pays monthly.

2 - If your tenant is not on a fixed term lease and they are currently on a month to month then send them a 120 day notice to vacate for no reason.

You may still need to attend VCAT for possession of the premises if the tenant fails to vacate due to either of the above notices but generally some kind words from your PM can help them move along.

In regards to collecting the late rent, it is problematic. I have in the past resorted to all kinds of things in an attempt to fix up late paying tenants who are never late enough for further action. Letters, text messages, phone calls and even just dropping in on my way home to try and collect some money. Keep an eye on the dates. If the rent is 15 days in arrears then I would be making sure your PM has contacted you to get your permission to issue a notice to vacate for late rent.

Hope it all turns out well!!

 

[aijii]

update -

last week tenant said he'd be paying 650 (half rent) on due date, and another half in two weeks.

Was due on the 17th, but we're still waiting.

He would have recieved the 90-day NTV on friday...

Ahh this is getting pretty funny.

I think, at about 6 weeks to go, i'll put the place ont he market again if possible, advertised as "available" a week or so after he is to move out to give us time to clean the place.

I would also like to swap PMs, however I'm undecided if it's the best thing to do given the current tenant issues still aren't really resolved ? However there are only 3 and a 1/2 months left to go so we'll see...

 

[Sez]

update -

last week tenant said he'd be paying 650 (half rent) on due date, and another half in two weeks.

Was due on the 17th, but we're still waiting.

He would have recieved the 90-day NTV on friday...

Ahh this is getting pretty funny.

I think, at about 6 weeks to go, i'll put the place ont he market again if possible, advertised as "available" a week or so after he is to move out to give us time to clean the place.

I would also like to swap PMs, however I'm undecided if it's the best thing to do given the current tenant issues still aren't really resolved ? However there are only 3 and a 1/2 months left to go so we'll see...

Sounds like it is all coming together now.

I would probably advertise after the 6 weeks, start advertising when there are max. 4 weeks until the property is available. You won't be able to show people through before it is cleaned up a bit and you don't want it advertised for so long that anyone interested has already found a property or that the property gets stale.

In regards to swapping PM's, if you change PM's before the tenancy is finalised you need to be aware that you new PM will be working off the old PM's paperwork, notices, condition reports etc. etc. If you are confident enough in your current PM then you could let them finalise the current tenancy and start fresh with a new PM once the current tenant is out.

I hope it all works out well for you!

 

[Jody in Darwin]

I have to admit - I haven't read much of this thread past the OP's post containing the property manager's response.

I would bet your PM doesn't own investment property. It's no guarantee that property investors will make better PM's but its got to be some indication that they know what its like to be on your side of the fence.

KR,
Jody