Tenant refuses to pay any more rent!

[James Bond]

One of my tenants has informed my PM that they are breaking lease. They are a week overdue with the rent and say they are not going to pay any more rent as "we have the bond".

The PM says there is nothing she can do until they are 15 days overdue, when she can apply to VCAT for eviction, which takes another 8 days.

Is the PM correct? Can they just walk away without paying the rent, and the only penalty is that they lose their bond?

I have insurance to cover this, but surely there is some way I can recover the unpaid rent, after all, there may well be damage to the property and they certainly won't clean it, I'll have to do that at my expense and they keep the place very dirty and messy.

Can anyone give me any advice?

Thanks

JB

 

[DEC]

Suck it up unfortunately and hope they dont leave the place a mess for you on vacate as well.
Welcome to the world of being a LL

 

[jingo]

I've experienced a couple of lease breaks. The tenant needs to keep paying you rent until a new tenant is found and cannot use the bond for this. They also need to pay your re-letting costs including advertising on a proportionate basis which is worked out on how much more time there is to run on the lease.

I'd have your pm remind these tenants of their responsibilities. I'd also get the pm to begin advertising for a new tenant immediately. Its in your current tenant's best interest to be cooperative with inspection times.

If your pm hasn't informed you of these procedures it's time to get a new pm. I can recommend mine to you if your ip is close to Melb CBD and inner suburbs.

Regards Jason

 

[churchlandman]

I agree with Dec. The hassles and time spent in chasing a bad tenant, is better spent in moving on and getting a better tenant next time. cheers.

 

[Curlytops]

There is nothing you can really do. You can apply to the tribunal for the bond but that is about it. You can once it has been at the tribunal list them on Tica or National Tenancy Database. You can not enforce payment of the amount. Insurance will not pay for bad housekeeping and will pay the difference after you have received the bond. Very hard to prove any different. Unfortunately as a landlord you have to accept it.

 

[AlmostBob]

as previously described, just bend over and get #*#*# up the bum
every business gives away their product for free whenever the customer refuses to pay

learn and enforce the rules, and run the business at a profit.

tenants are cattle, stock in trade
their sole purpose is to make you money
they live in your property at your convenience,

at what level of theft do pussy landlords decide 'enough is enough'
I get every dollar, every cent.
I run a business

those who think you dont, read the Act for your state,

 

[devank]

Suck it up unfortunately and hope they dont leave the place a mess for you on vacate as well.

That is what I was thinking too. Cost (emotional & financial) of fixing their mess is lot higher than few weeks of rent.

I thought 'James Bond' might have his own ways of dealing with these issues

 

[Scott No Mates]

As others have said, you are behind the 8 ball and have to cut your losses however there are two options when it comes to going to the tribunal:
a) apply the outstanding rent against the rent (and your insurer won't give you the balance)
b) seek termination of the lease by the judge (then have the debt followed up by a debt collector), apply the bond against any damage. Why? If they have an enforceable judgement against them the insurer can chase them, it goes against their credit record (not just TICA). When it comes to the release of the bond, have the final inspection (have the agent go over the place with a fine tooth comb and claim it against the bond).

 

[Lil Skater]

Unfortunately too many tenants do this and tenant advocates encourage it.

Have they paid lease break fees?

Your PM is right that they can't do anything until 15 days, except to hassle them on a daily basis. When will they be vacating?

If I were your PM I'd do the normal process for a NTV and then go through VCAT for a warrant (another 7-14 days), even if you know they're vacating before the eviction date you want it just in case. Then as normal a bond/compensation claim.

You no longer can lodge a tenant (in Vic) on NTD/TICA unless the claim is more than the bond AND you must advise the tenant prior to placing them on the database, which they then have 14 days to object. Annoying. However you only need the VCAT claim to get a debt collector.

Good luck, I hope all goes smoothly.

 

[James Bond]

Hi, thanks for all the help and advice guys. There is an inspection due this week (before the tenant vacates but during the period where they are living there without paying. At the inspection I am going to ask the PM to remove the 2 x surround sound systems which do not form part of the tenancy agreement in case the tenant decides to take them with them.....

This tenant leaves the place like a pig sty but I guess I should show the place before they move out so as to minimise weeks vacant....

JB

 

[devank]

This tenant leaves the place like a pig sty but I guess I should show the place before they move out so as to minimise weeks vacant....

I'm not sure if that is the righ thing to do. You may not attract 'quality' tenants. First impression counts a lot.

I showed my property to a RE agent when it had rubish everywhere. She estimated the rent to be around $400 mark. I showed the same property to another agent after cleaning up. That RE agent estimated to be around $475. Finally the place was rented for $480.

 

[James Bond]

I'm not sure if that is the righ thing to do. You may not attract 'quality' tenants. First impression counts a lot.

I showed my property to a RE agent when it had rubish everywhere. She estimated the rent to be around $400 mark. I showed the same property to another agent after cleaning up. That RE agent estimated to be around $475. Finally the place was rented for $480.

In this case we are in lease break so the rent is already set until end of lease. And the place was immaculate when it was shown to the current tenants who are now in the process of defaulting on their debts......

JB

 

[Curlytops]

In regards to TICA if it has been to the tribunal you can put them on the data base with out notification to the tenant as it is now public record.

 

[Lil Skater]

In regards to TICA if it has been to the tribunal you can put them on the data base with out notification to the tenant as it is now public record.

http://m.consumer.vic.gov.au/housing-and-accommodation/renting/tenancy-databases

Unfortunately that is incorrect.

Also in a lease break situation you must try your best to mitigate the loss to your tenant. Which will include showing prospective tenants through the property prior to them leaving. VCAT will ask for proof of these inspections if they feel it has taken too long to lease the property.

It's in the tenants best interest that they keep the property in a well presented manner during this time, but unfortunately that's not always the case.

 

[Ausprop]

in WA the tenants can be fined for this behaviour (ducking on rent and leaving it to the bond) - I think it is a $500 fine? it's in the RTA

 

[Dazz]

Hi Ausprop,


It's section 52 of the RTA, and the penalty is $ 1,000.00 based on the 1987 version.


http://www.austlii.edu.au/au/legis/wa/consol_act/rta1987207/s52.html


Don't be surprised at all to see this removed in the new version. Almost every penalty to force a Tenant to do something has been removed.

 

[wylie]

I'm not sure if that is the righ thing to do. You may not attract 'quality' tenants. First impression counts a lot.

I showed my property to a RE agent when it had rubish everywhere. She estimated the rent to be around $400 mark. I showed the same property to another agent after cleaning up. That RE agent estimated to be around $475. Finally the place was rented for $480.

In this case we are in lease break so the rent is already set until end of lease. And the place was immaculate when it was shown to the current tenants who are now in the process of defaulting on their debts......

JB

Regarding these comments...

We used to show houses before they were finished in order to get a head start and not lose two weeks' rent for those tenants who wanted to take the house, but needed to give notice at their current house. Same thing when we would show a house whilst the outgoing tenant was packing, boxes everywhere, rubbish everywhere. It never worked. Prospective tenants just cannot see how it "should" look.

After a lot of years, we stopped doing it. I KNOW how good a place will look but even I have trouble seeing it through the mess of renovation and/or a tenant packing up. Prospective tenants need to see the finished product to get highest rent, at least that is what we have found over many years.

So... if you think you could get higher rent than what you are currently locked into with the current lease, why not try a sweetener. More than likely you will not have the tenant pay what they owe, so maybe dangle the carrot that if they leave it clean, and with no damage, you will not pursue them for what they owe through the tribunal/court system.

Depending on the situation, we have had this work well. It may mean we lose a week or two but it can also mean we don't have to do major cleaning and/or repairs.

If they have stopped paying anyway, you're probably not going to see any money and even if you take them to tribunal and you "win" you cannot force them to pay up. But if they know that in return for leaving quietly and leaving it clean and undamaged that you will "let them off" they may just do that.

Of course, it depends on the tenant, but is worth considering.

 

[Peter 14.7]

in WA the tenants can be fined for this behaviour (ducking on rent and leaving it to the bond) - I think it is a $500 fine? it's in the RTA

And if they don't pay, who pursues them? Sounds toothless.

Peter 14.7

 

[Ausprop]

And if they don't pay, who pursues them? Sounds toothless.

Peter 14.7

the toothless aspect would be getting them fined in the first place, however once fined it is like any other fine that has to be paid. It can be used as a threat tho i.e. is the tenant aware of their breach of law?

thanks for the exacting link Dazz.

 

[James Bond]

Regarding these comments...

We used to show houses before they were finished in order to get a head start and not lose two weeks' rent for those tenants who wanted to take the house, but needed to give notice at their current house. Same thing when we would show a house whilst the outgoing tenant was packing, boxes everywhere, rubbish everywhere. It never worked. Prospective tenants just cannot see how it "should" look.

After a lot of years, we stopped doing it. I KNOW how good a place will look but even I have trouble seeing it through the mess of renovation and/or a tenant packing up. Prospective tenants need to see the finished product to get highest rent, at least that is what we have found over many years.

So... if you think you could get higher rent than what you are currently locked into with the current lease, why not try a sweetener. More than likely you will not have the tenant pay what they owe, so maybe dangle the carrot that if they leave it clean, and with no damage, you will not pursue them for what they owe through the tribunal/court system.

Depending on the situation, we have had this work well. It may mean we lose a week or two but it can also mean we don't have to do major cleaning and/or repairs.

If they have stopped paying anyway, you're probably not going to see any money and even if you take them to tribunal and you "win" you cannot force them to pay up. But if they know that in return for leaving quietly and leaving it clean and undamaged that you will "let them off" they may just do that.

Of course, it depends on the tenant, but is worth considering.

Thanks - we have an inspection this week so we'll see what sort of condition it is in then and make a decision.

JB