Tenant request

My SIL received this letter from her tenant who is starting up a small family day care business from home. The SIL has given permission for this to go ahead but was not expecting a demand for the cost of fencing to secure the yard. How would you deal with the request? Would be interested in your response.

Dear Sir/Madam
We are able to purchase the fencing from Bunnings and get a friend to install them for a minimal charge. Approximate amounts are as follows:

FRONT

1 x panel (1.2m high x 2.45m wide) $99 each

1 x gate (1.2m high x .975m wide) $97 each

3 x posts (1.3m high) $32 each

8 x brackets $95

2 x hinges $40

1 x gate latch $95

Labour $130

SUB-TOTAL $652

BACK

2 x panel (1.2m high x 2.45m wide) $99 each

1 x gate (1.2m high x .975m wide) $97 each

3 x posts (1.3m high) $32 each

8 x brackets $95

2 x hinges $40

1 x gate latch $95

Labour $130

Sub total $751



APPROX. TOTAL $1403

Please note that the fencing will be a Cream Powder Coat Flat Top Aluminimum.

As the home is designed for a family we believe that it is reasonable for any tenant to require at least one lot of fencing to enclose the yard. Accordingly, we request that the owner pays at least half of the total amount which would be around $701.50.
Please let me know as soon as possible if this is a suitable option so that we can start installation in the coming weeks.

Should you have any questions please do not hesitate to contact me on .....

I look foward to hearing from you.
 
Dear tenant,

You rent the place "as is". No request was made for fencing by you before you entered into the current lease and so we will not entertain any request for doing so now.

However, if you wish to erect a fence at your own expense it can be done subject to the following conditions:
1. It is done in a tradesman like manner
2. The specifications & colour are to be agreed to by us before erecting
3. When the tenancy is terminated, the fence stays
4. If the fence is damaged between the time it is erected and when the tenancy is terminated, it is to be repaired at your cost

Furthermore, now that we have had time to think about it, your proposed home business will inflict more wear & tear on our property than we agreed to, in renting it to you initially, as your lease states, for x number of people. Therefore, we give x days notice that your rent will be increasing to $y as of xx date.

We look forward to receiving your fence specifications for our approval in due course.

Kind Regards,
 
I would be more concerned about the fact that she is running a day care business from the home. I would imagine there are all sort of rules and regulations governing that and I'm not sure where the legal responsibility lies, but probably with the home owner. It would affect her insurance too, unless of course she is renting it as a commercial property.
 
Excellent info folks. Yes Prop, she did increase the weekly rent when the request was initially put to her. (great response in your letter - agree entirely)
I would also force them to get an insured and licenced professional to do the work.
The property is strata duplex with buildings, public liability and workers comp insured under the policy. Saying this she should get legal advice for sure. I think that the Family day care covers insurance but is well worth clarifying.

Thanks, RS
 
I like Propertunity's response. I think it is more than reasonable that the tenant pays for this. It is a cost of doing business (for the tenant). They should also have an increase of rent, because now the tenancy takes on more of a commercial nature. Obviously you won't get the same kind of thing that Dazz does as it still is a residential dwelling, but since there is the added risk of a home business this should be looked at.
 
I have a friend who was looking into starting family day care a little while ago but changed her mind once she found out all the requirements to do so. The FDC people inspect the house with a fine-toothed comb and demand that the house has certain features to comply. So I expect that the fence will only be the start of the requests.

I for one would be very uncomfortable having a FDC in one of my rentals. It's enough of an issue if a tenant runs their business from home but when it involves children it would be a huge worry for me.
 
Having run FDC from my own PPOR, it's not as simple as putting up fencing. There are so many rules and requirements, I am going to guess the requests are not going to stop at fencing.

HWS (has to be heat controlled), Heating (cannot have heaters on the ground or they have to be turned off), Power Points (must be secured), Curtains and Blinds (choke/hang risks removed), Glass under 1m from ground level (will need to have clear safety film installed), Garden plants (nothing on the poisonous plants list and nothing with thorns) .... it's never ending. Then there will be things like fire exits, signage (yep, I had to have pinup boards up listing everything for parents to see).

And then there is the wear and tear ..... your own kids might be angels in this department, but not everyone elses is.

FDC Australia will offer Public Liability insurance, but not Building or Contents for Accidental Damage etc.... I would be checking with your own LL Insurance and Building Insurance, because my own experience is some don't allow it and will not insure for and others will jack up the cost quite significantly.

If I had a tenant ask, I would be politely refusing. I appreciate them wanting to get ahead and work - FDC is the perfect business for SAHMs, but knowing the impact, I would now say no.
 
I dont think this is as easy as some might think.
For instance does the strata by-laws say that a business can be run from the premises?
Does the strata agree to the new fence and its material type?
Is there safe/ample parking for drop offs and pick ups?
Will the tenant be paying for all the changes inside the home to make it compliant?
Is the LL happy for these changes to take place?
Has the PM been informed that the ip is now a business premises?
Has their PM fee been increased?
You normal insurances will not be enough.
I believe the property owner will have to have special insurances to cover themselves, other than building and contents. Then it wont be enough .
I doubt if the strata insurances would cover this.
Would all strata owners be happy with an increase in their insurance premium to make sure they are legally covered?

I personally would be saying a very big NO to this happening in my IP.
There is only one thing worse than a can of worms and thats a
Can of Kids:eek:
cheers
yadreamin
 
Yadreamin, some very very valid points there.

The council approval will be an interesting one, because normally it is the property owner who puts that request in.....not the tenant.

One positive about it all, if it does end up working and everyone is happy, the OP will have a very long term tenant there, because for all the pain to set it up, they won't want to have to move and do it all over again at another property.

Or the tenant could realise just how much hard work it really is to run a FDC and decide after twelve months its all too much and give it up....in which case the property would have had some great improvements done with little outlay by the LL :D
 
Thanks folks. Some great suggestions. I think that the FDC operation is only a very small one - only 3 or 4 kids at once.
Saying this, my SIL needs to consider this one very seriously. I think the tenants are wanting to sign up on an 18 mth lease.
Body corporate only involves 2 owners (duplex) and the other owner certainly would need to be consulted. :)
 
Apparantly the SIL has already signed this form attached. Not sure where she stands legally now but she is feeling that she wished she hadn't signed it - especially after I passed on all of your concerns. She will contact her insurers today for clarification on the policies. She also needs to contact the other owner of the duplex next door. They are owner occupiers.
After sending a letter to the tenants (similar to Props letter above - but with some edits) the tenants have replied indicating they will now erect a temporary aluminium fence.
 

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look I know alot of people here have concerns over it, but truthfully alot of family day care's are run out of rental properties. They take out extra insurance, and are covered by the FDC insurance, you liability has increase less then if their kids decided to have a sleepover. Just tell them that you are fine with it, but all associated costs are their responsibility, and if they do take any fixtures (like a fence - weird) with then when they go, they are required to put things back into the same condition it started. Or even better tell them, you ave no problem with the improvement but it must be left there after. Put everything in writing.

Ring up FDC and talk to them about your concerns.
 
I also like Propertunity's first respsonse.

They pay for it with conditions and also pay more rent for the extra potential wear and tare.

Cheers

Mick
 
I don't think the signed letter makes any difference. That authorisation could be removed at any time, but better that she changes her mind before the tenant starts to invest money into setting it up.

I know that the Federal Govt offers $1500 incentive to start a FDC ($1000 to start up, $500 once operating, or could be the other way around) so the tenat would be aware of that. FDC really use that as a selling point to get people to start up. So there should be no upfront costs for the landlord, unless the fixtures etc are to remain, so maye a compromise on the improvements can be reached.

It's all relative at the moment anyway - council could come back and say no. The neighbour may say no and place objections to the council approval. I know here, one of my neighbours calculated how many children per day, pick up and drop off with one parent in the car, would equal x number of times a car door would be opened or closed, affecting his peaceful amenity. So it isn't just as simple as setting up a FDC, there are so many factors to consider.

Good luck what ever decision is made.
 
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