'Rent Review' or not "Rent Review'??? HELP!!!!!
- Thread starter aussieamp
- Start date
i am settling on a place that is currently rented at $180 a week with a periodical tenant. the selling agent asked if i wished to keep the tenant in. i was going to offer it to them with a $100 a week increase but it will just get their back up and I feel it is easier to vacate and start from scratch. There are many landlords that I know putting rents up from say $160/wk to $300wk. About time things moved a little.
Got a call from the agent today on one IP.. mkt val = $400k, rented at $230/wk which is about market rate. Hot water not hot enough. oh oh... here goes a couple of weeks rent for a call out. probably a switch not turned on.
my point other than venting? maybe just wear it for now and get them out as soon as possible. being a resi landlord is a charity so why give it to those that are undeserving?
Got a call from the agent today on one IP.. mkt val = $400k, rented at $230/wk which is about market rate. Hot water not hot enough. oh oh... here goes a couple of weeks rent for a call out. probably a switch not turned on.
my point other than venting? maybe just wear it for now and get them out as soon as possible. being a resi landlord is a charity so why give it to those that are undeserving?
Here's an update...
Called consumer affairs (just like the tenant suggested - hehe!) and they confirmed that 'rent review' is perfectly acceptable and the tenant has to pay the rise. Hell, even Homeswest and The Dept. of Defence use the term 'rent review' in their residential leases. What a relief!
I also did a ring around of agents and found that current market rents are even higher than I thought. They all said the prop would rent for at least $340-350/week - starting point!! Yippee! Roll on December!
Called consumer affairs (just like the tenant suggested - hehe!) and they confirmed that 'rent review' is perfectly acceptable and the tenant has to pay the rise. Hell, even Homeswest and The Dept. of Defence use the term 'rent review' in their residential leases. What a relief!
I also did a ring around of agents and found that current market rents are even higher than I thought. They all said the prop would rent for at least $340-350/week - starting point!! Yippee! Roll on December!
G'day Aussieamp,
We deal with rent reviews as a matter of course with our Industrial Leases.
The reviews can either be a set percentage, say 4 or 5% increase, tied to some floating norm like the CPI, or a 'market review'.
This is where the Lessor states in a letter what the rent is rising to, giving market evidence to support it, and the Lessee has 14 days to write an objection letter. If they don't reply to the Landlord's letter, it is deemed to be accepted. Unlike residential, the onus is actually on the tenant.
If they disagree with the rental rise, an expert is appointed....not an arbitrator, but an expert, who then appraises the rent level and both parties have to abide by the decision.
Obviously, Lessors are not stupid, so to protect the downside, also incorporated in the Lease is a ratchet clause, whereby if the rent level is appraised to be less than what is currently being paid, the rent reverts to the current level plus the fixed increase...could be say 5% or CPI.
See below for a pretty common small section of the Lease on how we deal with rent reviews. There is no room for confusion or negotiation.
Not sure if this will be of any help to you, but anyhoo....
3.2. Rent Review
As from the Review Date or dates, as the case may be, the Rent shall be reviewed in accordance with the Schedule. For the purposes of the Schedule, a reference to “Percentage Review” means that the annual Rent payable from the relevant Review Date shall be reviewed in accordance with Clause 3.3 and a reference to “Market Review” means that the annual Rent payable from the relevant Review Date shall be reviewed in accordance with Clause 3.4.
3.3. Percentage Review
The annual Rent payable as from each Review Date on which the annual Rent is to be reviewed in accordance with this Clause 3.3 is to be the annual Rent calculated as follows:
N = P x 1.05
Where:
“N” means the annual Rent payable as from the relevant Review Date;
“P” means the annual Rent payable immediately prior to the relevant Review Date;
3.4. Market Review
(a) The Landlord may give notice to the Tenant at any time before the relevant Review Date of the sum the Landlord considers is the market rent for the Leased Premises at the relevant Review Date. The Landlord’s Notice may be given after the relevant Review Date and is effective from the relevant Review Date.
(b) Within 28 days after service of the Landlord’s Notice, as to which time shall be of the essence, the Tenant may serve a notice either agreeing to or disputing the sum stated in the Landlord’s Notice.
(c) If the Tenant agrees or fails to give a Tenant’s Notice within 14 days of service of the Landlord’s Notice the sum stated in the Landlord’s Notice shall be the annual Rent payable on and from the relevant Review Date.
(d) If the Tenant by the Tenant’s Notice disputes the Landlord’s estimate of the market rent then from the relevant Review Date the annual Rent payable shall be adjusted to an amount equivalent to that determined as the Market Rent of the Leased Premises by either:
(i) a person licensed under the Land Valuers Licensing Act 1978 appointed in writing by agreement between the Landlord and the Tenant not more than 21 days after the date the Tenant’s notice is served upon the Landlord; or
(ii) if the Landlord and the Tenant fail to agree on the appointment as contemplated in paragraph (i) above, then by two persons licensed under the Land Valuers Licensing Act 1978, one of whom is appointed by the Landlord and one of whom is appointed by the Tenant, such appointments to be made not more than 35 days after the date of service of the Tenant’s Notice PROVIDED THAT if either the Landlord or the Tenant fails to make its appointment in accordance with this paragraph (herein “non-appointing party”), then that party’s appointment may be made on its behalf by the President or other senior officer for the time being of the Australian Property Institute (W.A. Division) (the “President”) at the request of either the Landlord or the Tenant in which case each non-appointing party agrees to ratify and confirm any appointment made on its behalf by the President or other senior officer AND PROVIDED FURTHER THAT if the two licensed persons referred to in this paragraph cannot agree on the Market Rent for the Leased Premises, the question shall be referred to a third person licensed under the Land Valuers Licensing Act 1978 which third person shall be appointed by the President at the request of either the Landlord or the Tenant and such third person shall act as an expert.
3.5. Rent Payable Until Determination
In the event of the reviewed Rent being agreed, calculated or determined after the relevant Review Date the Tenant shall continue paying the Rent at the rate being paid immediately prior to the relevant Review Date from such date until the date upon which the reviewed Rent is agreed, calculated or determined (as the case may be) and thereafter in accordance with such agreement, calculation or determination and thereupon there shall be due to the Landlord from the Tenant as Rent payable on demand the difference (if any) between the Rent paid as aforesaid and the Rent due from the relevant Review Date applying pursuant to such agreement, calculation or determination.
3.6. Minimum Rent
Notwithstanding anything to the contrary contained or implied in this Lease the annual Rent to be payable from any Review Date shall not be less than the annual Rent payable immediately prior to that Review Date.
Wylie,
The original question was 'has anyone come across this problem before'.
My answer was yes, and I provided a clause that acts as a solution to "the problem". This is how we handle it. It is now not a problem, and there is absolutely no room for ambiguity for the tenant to wriggle out of.
In terms of your new question, of whether I would suggest this be part of a ressy lease, my answer would be no.
Before I suggested something, there would need to be a reasonable expectation that it would pass critical review under the applicable laws that govern the relationship (RTA). I reckon all of the agencies wet nursing the tenants would reject it outright.
As I mentioned previously, we operate under different legislation....and that makes all the difference.
I don't think any ressy tenant would ever sign a Lease with that in there, as the market review can be as high as 60, 80 or 100%....whatever the market is paying at the time. Ressy laws and authorities can't and won't allow that type of review.
The original question was 'has anyone come across this problem before'.
My answer was yes, and I provided a clause that acts as a solution to "the problem". This is how we handle it. It is now not a problem, and there is absolutely no room for ambiguity for the tenant to wriggle out of.
In terms of your new question, of whether I would suggest this be part of a ressy lease, my answer would be no.
Before I suggested something, there would need to be a reasonable expectation that it would pass critical review under the applicable laws that govern the relationship (RTA). I reckon all of the agencies wet nursing the tenants would reject it outright.
As I mentioned previously, we operate under different legislation....and that makes all the difference.
I don't think any ressy tenant would ever sign a Lease with that in there, as the market review can be as high as 60, 80 or 100%....whatever the market is paying at the time. Ressy laws and authorities can't and won't allow that type of review.
The Benefit of properties in QLD, nothing to stop rent rises, i signed a lease in January for $245 a week, its going up to $295 a week in July.
But I suspect it might not go up that much now because of the large amounts of vacany in the complex, people are just moving out when their rent goes up that much.
I would also if it wasn't for my PPOR being constructed and due for completion late October/early November
But I suspect it might not go up that much now because of the large amounts of vacany in the complex, people are just moving out when their rent goes up that much.
I would also if it wasn't for my PPOR being constructed and due for completion late October/early November
Oh...my...God! The gall of this tenant!!!!!
This is a excerpt of the latest email from them:
"The whole idea of ***** working away (North WA) is to get us ahead money wise so with the new lease due in December & the inevitable rent increase then too we will have to see how much you increase to weather (sic) we can stay on. We have just purchased 2 blocks of land in QLD, no house on them so we have to make repayments ourselves."...
ARE YOU KIDDING ME!!!!! They are complaining about a $20/week increase (which means the rent is still $70/week under market value), suggesting I am wrecking their plans to "get us ahead money wise", meanwhile they are buying up 2 blocks of land to add to their house in Melb. and their house in NT. THE CHEEK!!!!!!!
The gall of this tenant!!!!! This is a excerpt of the latest email from them:
"The whole idea of ***** working away (North WA) is to get us ahead money wise so with the new lease due in December & the inevitable rent increase then too we will have to see how much you increase to weather (sic) we can stay on. We have just purchased 2 blocks of land in QLD, no house on them so we have to make repayments ourselves."...
ARE YOU KIDDING ME!!!!! They are complaining about a $20/week increase (which means the rent is still $70/week under market value), suggesting I am wrecking their plans to "get us ahead money wise", meanwhile they are buying up 2 blocks of land to add to their house in Melb. and their house in NT. THE CHEEK!!!!!!!
AussieAmp,
They actually swore in an email?
Just make sure you don't lose your cool when communicating with them.
These people are making a packet........and should know full well how it goes in WA at the moment. Tell the hubby to drink less beer in the wet mess.......that 'ought to cover it.........
Any sympathy I may have had for your tenant just evaporated.
Can't believe these people were stupid enough to tell you all that.........but now that you know, make sure you use it to your advantage.............you have 'em by the short and curlies.
ciao
Nor
They actually swore in an email?
Just make sure you don't lose your cool when communicating with them.
These people are making a packet........and should know full well how it goes in WA at the moment. Tell the hubby to drink less beer in the wet mess.......that 'ought to cover it.........
Any sympathy I may have had for your tenant just evaporated.
Can't believe these people were stupid enough to tell you all that.........but now that you know, make sure you use it to your advantage.............you have 'em by the short and curlies.
ciao
Nor
Oh...my...God!
This is a excerpt of the latest email from them:
"The whole idea of ***** working away (North WA) is to get us ahead money wise so with the new lease due in December & the inevitable rent increase then too we will have to see how much you increase to weather (sic) we can stay on. We have just purchased 2 blocks of land in QLD, no house on them so we have to make repayments ourselves."...
ARE YOU KIDDING ME!!!!! They are complaining about a $20/week increase (which means the rent is still $70/week under market value), suggesting I am wrecking their plans to "get us ahead money wise", meanwhile they are buying up 2 blocks of land to add to their house in Melb. and their house in NT. THE CHEEK!!!!!!!
Some of them make you mad alright,
Had a similar thing with a tenant bleating about a $10 increase in one of our new 3 bedroom brick with a/c and d/w.
Reckon they are trying to buy a house [Boo Hoo].
We turn up in our old Valliant for an inspection, and they have new BMW and big plasma screen.
Latest from them is bleating about the excess water bill, probably from washing the BMW.
BB
Rest assured I will. Come December it will be spot on market and not a penny less.
I'd be getting rid of them altogether at the end of the lease. Then they can be someone else's problem (and they will have to pay moving costs, new bond etc).
Get your place up to market rent as soon as possible. After all you are not a charity.
Aussiechamp...have I missed something? Why are you waiting until Dec to raise the rent? I would be giving them the appropriate notice, and raising it to the median price for your area ASAP.
I agree with other posters, in that you are not a charity, and you are not there to subsidise their wealth creation. You are in the job of creating your own.
I agree with other posters, in that you are not a charity, and you are not there to subsidise their wealth creation. You are in the job of creating your own.
Unfortunately I have already sent the official notice for the $20 increase...don't believe I can change it?
I have told her that the rent come December will be $350/week or more.
Norwester...the '****' is just where I deleted a name but some of her emails have been very aggressive and impolite. I just keep my cool and send the basic facts without being rude. I don't get drawn into her selfish little argument no matter how much I would like to explain what a ***** she's being. I just swear my head off and rant and rave behind the scenes to hubby and you guys. Aren't you lucky?
I have told her that the rent come December will be $350/week or more.
Norwester...the '****' is just where I deleted a name but some of her emails have been very aggressive and impolite. I just keep my cool and send the basic facts without being rude. I don't get drawn into her selfish little argument no matter how much I would like to explain what a ***** she's being. I just swear my head off and rant and rave behind the scenes to hubby and you guys.
Aren't you lucky?your current tennant is an *******, a poor one at that.
Alright, a mystery guessing game...love these.....OK, I'll have a crack at it....
....seeing as though it's 'an' instead of 'a' I reckon it'd start with a vowel, so my guess is INVESTOR.
Was I close ??
