Tenant breaking lease - no access

[Azazel]

Hi guys, we have a tenant breaking their lease early. The PM said the current tenant will be responsible for paying the rent until we find another tenant. They also said we can't increase the rent amount, as the current tenant is responsible for the rent. No worries, we want to do the right thing.
Current tenant was a bit difficult with allowing access to perform maintenance - things that the tenant had noted required attention during inspections, but wouldn't allow access to rectify - odd. So we decided in the interests of our sanity, we would just wait until they leave and do what we can then.
PM called today and said they've found another tenant, they will move in 4 weeks after the current tenant moves out. Good stuff.
But the PM said that we can't do anything while it's vacant or the current tenant won't be responsible for the rent any more. Am I thinking of this the wrong way?
#1 If I was the current tenant, I would have allowed access as it would increase the rentability, hopefully decreasing the amount of time that it was vacant.
#2 I would think that painting etc... while it's going to be vacant anyway would be common sense.
Does anyone have any experience with this type of situation?

 

[EN710]

Ask Fair Trading?

If you're going to do some work in there, why not just let the current tenant go with 1-2 weeks rent while you're doing the work?

 

[Azazel]

If you're going to do some work in there, why not just let the current tenant go with 1-2 weeks rent while you're doing the work?

Cost/benefit. Let's say the rent is $320 for example.
320 x 4 = 1280
320 x 2 = 640
320 x 1 = ...320

From a business standpoint, there's really no question. Doing nothing to cover 4 weeks rent means we are $640-960 better off than doing something after 1-2 weeks.
It doesn't make a difference to the rent amount at this stage. The PM has discussed with the new tenant and they will allow us to do what we need to do after they move in.
Just feels like such a waste that it would be vacant for that long and we can't touch it. Are there exceptions for repairs and not improvements? Backyard/garden? Anything? This is weird, I should just be happy I don't have to do any work

 

[Xenia IM]

I can see agents point as it can be deemed that the 4 week vacancy could be deemed excessive due to improvements.

They are being cautious in a literal sense.

You make the choice however and decide whether you would take the chance!

If there is a lease signed before work commended then risk is reduced.
You decide....

 

[Azazel]

I can see agents point as it can be deemed that the 4 week vacancy could be deemed excessive due to improvements.

It won't be vacant because of improvements, it will be vacant because that's when the new people are available to move in. We would be happy for them to move in a week after the current tenants vacate - we would still try to cram in as much work in that 1 week as possible

 

[Xenia IM]

I know - it is counted as a vacancy so that you can claim lease break costs.
I fully understand the scenario.

 

[marg4000]

You can't have it both ways.

You can't charge the tenant for a vacant property while you are occupying it yourself to carry out repairs.
Marg

 

[Lil Skater]

Before we get too far ahead of ourselves... Has the existing tenant actually paid the lease break costs and rent?

That's usually the hardest part to get, and a month between tenants with a lease break is excessive (depending on circumstance).

There's absolutely nothing to say you cannot do minor improvements/repairs on the property, providing this doesn't affect the vacancy period.

Ie. If you have a new tenant that could move in 2 days after the old, but push that back two weeks because you want to do work, you can't do it as you're not mitigating the tenants risk and the old tenant is only liable for those two days.

If however, the only reason the new tenant can't move in for 4 weeks is because of their circumstance and you've ensured you have picked the best tenant, whilst ensuring the vacancy is "reasonable" in the eyes of the tribunal there is absolutely no reason that you cannot do bits and pieces.

The main issue I can foresee is the 4 week vacancy between tenants. Why so long? What's the market like in the area?

I know this goes against what those have said above me, but it's not unreasonable of you to ensure the property is in good repair for the incoming tenant and if you've proactively ensured the loss to the old tenant is minimal, I don't see an issue.

If it goes to tribunal, it will be up to the member and all they'll want to know is why there is a long vacancy. I've went to tribunal before for the same scenario (painting), but because I could prove that the property was leased in a reasonable time frame and the new tenant couldn't/wouldn't move in sooner despite my best efforts the old tenant was still liable for the rent. I have also had the opposite, where a claim was reduced for 3 days rent because the landlord wanted to do some small work but the new tenant could have moved in three days sooner.

 

[Azazel]

Before we get too far ahead of ourselves... Has the existing tenant actually paid the lease break costs and rent?
That's usually the hardest part to get, and a month between tenants with a lease break is excessive (depending on circumstance).

No, they haven't moved out yet.
The PM has been proactive, got it advertised, found a suitable tenant. But they can't move in until 4 weeks after the other moves out.

There's absolutely nothing to say you cannot do minor improvements/repairs on the property, providing this doesn't affect the vacancy period.
Ie. If you have a new tenant that could move in 2 days after the old, but push that back two weeks because you want to do work, you can't do it as you're not mitigating the tenants risk and the old tenant is only liable for those two days.
If however, the only reason the new tenant can't move in for 4 weeks is because of their circumstance and you've ensured you have picked the best tenant, whilst ensuring the vacancy is "reasonable" in the eyes of the tribunal there is absolutely no reason that you cannot do bits and pieces.

That's what we were thinking, especially things that were picked up during the inspection or pointed out by the tenant. They just wouldn't allow access to fix it. Like they pointed out some flaking paint in the bathroom ceiling. But refused access saying the paint fumes would affect their son... So we can't go in and see if we can scrape it back and repaint or if moisture has gotten into the paper, then we need to replace the gyprock. We can't even get it to see what we might be up for. While we're at it, would get electric fan installed to prevent it happening again. They also said the AC stopped blowing cool air, but wanted 7 days written notice. Then they stuff the repairer around with times so we give up, and decide to do it when they leave.
So as above, we're not keeping it vacant to do work, the new tenant has given their date, that's 4 weeks after the previous tenant moves out. We just want to make efficient use of the vacant time.

The main issue I can foresee is the 4 week vacancy between tenants. Why so long? What's the market like in the area?
I know this goes against what those have said above me, but it's not unreasonable of you to ensure the property is in good repair for the incoming tenant and if you've proactively ensured the loss to the old tenant is minimal, I don't see an issue.

It's not the best area as far as quality of tenants go, we've had 2 fairly average ones in a row. PM says the new person has a really good rental history - and even has a job!
We're trying to think of ways to do it, maybe negotiate current tenant to only pay 2 weeks to break their lease. As I said we're trying to do the right thing, but they have stuffed us around a bit with not allowing access.

If it goes to tribunal, it will be up to the member and all they'll want to know is why there is a long vacancy. I've went to tribunal before for the same scenario (painting), but because I could prove that the property was leased in a reasonable time frame and the new tenant couldn't/wouldn't move in sooner despite my best efforts the old tenant was still liable for the rent. I have also had the opposite, where a claim was reduced for 3 days rent because the landlord wanted to do some small work but the new tenant could have moved in three days sooner.

I can't see the current tenant complaining, but you never know.
As Xenia's reply above, having the new tenant signing the lease might reduce that risk, that's the earliest they can move in, it's not us holding it up with doing work there.
Thanks for the detailed reply! I was hoping someone with some experience in this type of situation would reply.

 

[Azazel]

We've decided to err on the side of caution and asked the PM to negotiate for the current tenant to only pay 2 weeks out of the 4. Think that's fairly reasonable and should save us potential hassle. (Now get out! )
Also called Fair Trading, they weren't very useful. Said they can't provide advice, only information. Whee.

 

[Lil Skater]

Good luck! Hopefully it's a nice smooth transition and the current tenant pays up!

Just make sure you get the new tenant to sign the lease and pay rent/bond now - last thing you want is to need to find a new tenant again!

 

[marg4000]

We've decided to err on the side of caution and asked the PM to negotiate for the current tenant to only pay 2 weeks out of the 4. Think that's fairly reasonable and should save us potential hassle. (Now get out! )
Also called Fair Trading, they weren't very useful. Said they can't provide advice, only information. Whee.

Sounds very reasonable. Hope all goes well.
Marg

 

[Azazel]

Good luck! Hopefully it's a nice smooth transition and the current tenant pays up!

Thanks. We took people's words of caution re: they might be responsible for rent, but good luck getting it once they're gone. A bird in the hand...

Just make sure you get the new tenant to sign the lease and pay rent/bond now - last thing you want is to need to find a new tenant again!

Yeah, they are pretty keen which is good, just need them to sign up and we can rest a little easier. Always a little stressful between tenants.

 

[Azazel]

Sounds very reasonable. Hope all goes well.
Marg

Thanks Marg, fingers crossed.

 

[Azazel]

Just a quick update, PM called, new tenant pulled out, they have another one lined up that can move in 2 weeks earlier. Funny how things change.

 

[Lil Skater]

Just a quick update, PM called, new tenant pulled out, they have another one lined up that can move in 2 weeks earlier. Funny how things change.

For next time, have the PM ensure new tenant signs the lease and pays rent + bond within 24 hours.

Less chance for them to pull out, and if they do - you've only lost a day.

Also, ad never removed and inspections do not cease until above is completed.

 

[skater]

For next time, have the PM ensure new tenant signs the lease and pays rent + bond within 24 hours.

Brilliant! I wish they all did that, but they don't.