Q - tenants appeared to sub-lease, what to do?

Property manager sent an email advising that he did a periodic inspection and it appeared that the 2 tenants who signed the lease did not live at the property, but there were other people living there. He was not sure how many. The water bill which I have to pay has gone through the roof - increased 4 times (yes, 4 times!)

The original tenants were supposed to be a family with 2 kids (property has 3 bedroom upstairs and a study downstairs). They are from overseas - property manager said husband lives and works overseas, wife in Oz with 2 kids going to school. Although they did not have rental references, they showed their bank account and prepaid the first 6 months rent in advance and got a friend in Oz to give reference.

This is what I think, tenants have sub-leased the property (without our consent) to their friends (who are foreigners) - not sure studying or working in Oz - who cannot rent normally because they don't have references. Property manager said the property was kept neat and clean, but every room had a bed in it, and rent was paid on time. Property manager said he would ask the people living at property to sign a new lease. But, I don't know what to do?

Should I do what property manager suggested - a new lease with the correct people names on it and maybe increase rent? Or, give notice to terminate the lease as tenants have sub-leased without consent, and put new tenants in?

I would appreciate some views on this. Many thanks!
 
If its neat and tidy who cares really, just jack the rent up heaps higher then u getting the benefits of per room letting without the management
 
I agree with Propertunity and others. Keep them, get them on a lease, and increase the rent a little (depending on how much leeway there is to increase it).
 
OK, thanks so much for the all replies. Much appreciated your consensus view. Sometimes it is good to get others' opinion. :)

In fact just got another email from property manager today. So, will tell him to go to property and ask people living there to sign a new lease with their names on it and to increase the rent! Currently renting for $510 a week, so I think an increase of $10 to $20 a week. Property has 3 bedrooms, study, 2 bathrooms and double locked up garage in Brisbane.
 
OK, thanks so much for the all replies. Much appreciated your consensus view. Sometimes it is good to get others' opinion. :)

In fact just got another email from property manager today. So, will tell him to go to property and ask people living there to sign a new lease with their names on it and to increase the rent! Currently renting for $510 a week, so I think an increase of $10 to $20 a week. Property has 3 bedrooms, study, 2 bathrooms and double locked up garage in Brisbane.

what suburb in brisbane?
 
Is there a clause in the lease that prohibits sub-leasing?

There is a clause which said that "the tenant may transfer all or a part of the tenant's interest under this agreement, or sublet the premiseee, only if the lessor agrees in writing or if the transfer or subletting is made under a tribunal order" (bold is mine)

Tenants have never approached me for sub-leasing verbally or in writing.
 
I'd also keep them, getting ALL the adults names on the lease AND get them to pay the water usage plus an increase in rent.

Where else are they going to go? If there are a lot of them in the one house others may not be willing to have them, so you have tenants that pay a little extra to make up for the extra wear & tear on your property. Win/win.:cool:
 
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