Tenants mates moved in without approval.

[SkyIsTheLimit]

Hi everyone, I have been sitting back and reading your threads, and learning so much in such a short amount of time. I've finally decided to take the plunge and post this thread.

We are in a bit of a pickle with our blessed tenants.
My tenants aren’t all on the lease. The only person on the lease is in the Army, the other tenant is his defacto. (Well if you are told that they want to settle down and have a baby, that makes them defacto, right?) Yet, she is an approved tenant only. The tenants have just decided to let their buddies move on in without getting approval from us first. We suspected there were more than 2 living at the IP as there was constantly 4 cars parked all over the yard and driveway. I’ve called our PM and got her to get the cars off the lawn & suss out if anyone else is living there. Just as we thought, there were two other people "visiting", and we were re assured it wont happen again. I told the real estate that these people are pulling the wool over her eyes, and so she came back with another story that the tenant had come into their office 2 weeks prior to pick up and application form for their two buddies without her knowing. I told her regardless of what the story is, we want the buddies out. The PM said that she can send this notice and that notice, but I said that if the tenant is as nice as she has let on, then he will be understanding. Plus, if these friends are just visiting and not living there, then we shouldnt need to be sending notices to leave and breaching the contract and all that stuff. The PM has now come back again and asked us to re consider and talked up how good the tenant was and if we dont approve, the tenants are threatening to leave based on the grounds that the tenant is worried that his girlfriend is not safe at home on her own.

We're not buying it, and are sticking to our guns. We think that he is getting rent assistance from DHA. To get the maximum rental assistance, he's deliberately put no one else is on the lease.And as for the PM, why hasn't she pick that up? We've only been in the game for a year, and we can see what they are doing.


If he was legit, then they wouldnt have any problems having everyone apply to go on the lease to start with, and not mislead us to think that a couple was moving in and wanting to settle down. So what do we do from here? Do we call DHA and report his fraud? Are we being over protective of our IP? Is our PM not doing her job? There are many other issues we have with our PM, but this is our main problem at the moment.
We dont want to send notice to kick out the tenants because we are worried that it'll take some time to get new tenants in, plus a new re letting fee and advertising costs, all around christmas time, too.
I would really appreciate any views and advice you may have.

 

[russellpeter]

you’re in a tough spot

if you giving them 2 months notice to leave if on a periodic lease may work as you will become vacant in the peak of the market

or try saying they you would like to increase the rent now that 3 extra people are living in the property.

Because of the time of year you may have to wait but it depending on the demand in your area

sorry i couldnt be of any real help

 

[Goofy]

I think that if the other tenants are prepared submit their application forms, put their names on the lease an therefore become legally liable for the property also, they pay their rent on time and if your routine inspections are showing they are looking after the property, then you shouldn't haven't any concerns.

Perhaps they haven't done things the right way, in an ideal world they would have asked your permission first, but the reality is a large majority of tenants don't think to do that. They believe it is their house and if they are happy to keep their name on the lease then that is fine. Often they dont understand the ramifications of having people living there that arent on the lease.

 

[Rixter]

If the place is being looked after and rent paid on time , what dont you just get the extra's added to the lease??

Its no biggy. Ive done it before without any issues.

Keep focused on your big picture and leave the day to day short term issues to your PM.

 

[Lil Skater]

There are many other issues we have with our PM, but this is our main problem at the moment.

We dont want to send notice to kick out the tenants because we are worried that it'll take some time to get new tenants in, plus a new re letting fee and advertising costs, all around christmas time, too.

If there are many issues, get rid of the PM it sounds as though they're not doing a great job anyway.

If the tenant is on a fixed lease you can't kick them out without an order and if they are, they can't pack up and leave without incurring penalties - Such as re-letting fees, advertising fees and all rent up until the end of the lease or until another suitable tenant is found.

or try saying they you would like to increase the rent now that 3 extra people are living in the property.

But if the tenant is on a fixed lease, they can't just up the rent and if the rent was just put up, they can't either.

I suggest to call their bluff if they're on a fixed lease (and if they leave, no big deal as they have to pay the fees), if they are month to month serve them with notice a few days before or just after Christmas - That way if they decide to give 14 days notice you're not out of pocket right on Christmas time.

Or as the others have said, let them submit applications and add them to the lease, that way they're liable for rent and the state of the property too.

 

[NedKelly]

I think that if the other tenants are prepared submit their application forms, put their names on the lease an therefore become legally liable for the property also, they pay their rent on time and if your routine inspections are showing they are looking after the property, then you shouldn't haven't any concerns.

Perhaps they haven't done things the right way, in an ideal world they would have asked your permission first, but the reality is a large majority of tenants don't think to do that. They believe it is their house and if they are happy to keep their name on the lease then that is fine. Often they dont understand the ramifications of having people living there that arent on the lease.

I totally agree. If you are getting the rent who cares. Get the new guys on the lease and leave them in peace. You don't know if he is getting rent assistance from DHA and why worry if the rent is paid. The only concern is that the property is kept in good repair and your PM should check that for you.

 

[start-up]

We think that he is getting rent assistance from DHA. To get the maximum rental assistance, he's deliberately put no one else is on the lease.

That's exactly what he's doing. You could go around and ask him to give you an extra $50 straight into your bank account a week to look the other way.

 

[Sheryn]

My tenants aren’t all on the lease.

If they are paying the rent on time, mowing the lawn, maintaining garden (yep I read don't park on the grass) and passing 3 monthly inspections then allow PM to put them all on the tenancy agreement.

You will have 4 adults (and when one has a baby hopefully 3 will still be employed).

Same thing happened to us - no big deal (except PM had to send letter so yard was mowed).

BTW - Most people would do a 'swifty' of they can get away with it eg claiming rent assistance - this is not your problem as you are only guessing.


Regards
Sheryn

 

[schweedy]

If you add them to the lease, they become accountable. If you refuse and they stay, they aren't accountable (though it could be argued they have the same rights as a tenant without a lease).

As for him ripping of a rental allowance from defence. Unless things have changed dramatically, unless this is an army house you own (and I'm betting its not), he wouldn't get rental assistance, but he is no longer charged for rent through the army to either live on base or in a married quarters. If there was an allowance, having his mates on the lease would be an issue he would have to take up with admin, no real concern of your own.

 

[schweedy]

The added bonus you have here.....
Mr Army, cant afford to have an 'admin problem' on his records, a few of these can cause a lot of problems. So as long as your pm does their job, any problems should be rectified by the serving member, or can be chased up through his unit etc to rectify the problem.

 

[Andy86]

Dobbing them into DHA would be fairly vindictive, and if you haven't got any solid evidence you could be wrong.

Let the other people go on the lease or as approved tenants and move on.

If you are wrong about the rent assistance, and given that you have clearly been 'spying' on them, your actions are seem fairly close to harassment. Particularly if they did pick up the application form and were genuinely trying to let you know earlier on.

 

[SkyIsTheLimit]

Thanks for your input. Its what we really need. We haven't had the opportunity to speak with other investors just yet.
Sometimes you just need to take a step back and look at the big picture, dont you? Yes they do pay their rent on time, and you can only hope the property is taken care of. (We havent had an inspection yet).
These are really our first tenants, and we are still finding our feet, so we dont really know when something is a little or big problem, so please forgive me if you find me vindictive or harassing, as I dont mean to be that way at all.
Goofy, I like your opinion, it definately made me see the situation in another light. I'll give the PM a call tomorrow and have a chat with her, try to work out something.

 

[neK]

Other than the extra cars parked in the yard, I dont see what the problem is.

Is the place being kept tidy and clean on the inside?
Are they looking after the outside (excluding car parking issue)
Do they pay their rent on time?

If so, I would simply let them know that you're "happy" with their friends visiting and you'll check the IP once a month (or 2 months) to make sure all is in order.

 

[kathryn d]

When we have a tenant refuse to add their friends who have started residing at the premises, it sends up a red flag.
They are given an ultimatum..and when they don't, then we evict

 

[wylie]

I'm with the others who suggest getting everybody living there onto the lease.

If not, your first chap might leave and then you have three "squatters" with no financial ties to the property, no lease and no responsibility.

If they are on the lease, and pay on time, I would see how that works out. If they turn out to be not so good, give them notice that you will not be renewing the lease.

No way would I let someone live in our IPs if they are not on the lease.

 

[Monty Burns]

It wouldn't be DHA it would be LOA (Living out allowance) and is paid by the CO of the unit he is posted to.

It would be based on who is living in the property so if he is the only one on the lease he is ripping off the system.

 

[chris01]

The more people live in the more wears and tears so should consider increase rent to cover that

 

[SkyIsTheLimit]

The more people live in the more wears and tears so should consider increase rent to cover that

That's one of the reasons why we wanted to keep the tenants to a minimum. We've just moved out of that house, after spending 3 years breaking out backs renovating the property. ( we bought our 2nd house, and made our 1st our IP)
The tenants are at the start of a 12 mths lease, so unfortunately, I can't up the rent. It'll look pretty stupid of us to turn around the PM and say to her that we'd have the tenants mates move in after we were so passionate about them not moving in.
I still havent heard back from the PM about whether the tenants are going through with their threats and moving out. How much notice do the tenants have to give?

 

[schweedy]

Seems you have an emotional attachment to this house.....thus the basis of your concerns. I found this with a couple of my properties. In time that anxiety they will wreck your old home does dissapate, but it takes a while. Your other option is to sell this one and move on to another, without the past history and emotional attachment.

You really need to treat this like a business.

 

[Lil Skater]

How much notice do the tenants have to give?

If they're at the start of a 12 month lease then, nil, basically. This is because they'd be breaking their lease, which is fine as they're responsible for all the fees you would incur.

Not ideal to have them up and leave, but if your costs are covered and you're not comfortable with the other tenants being there, everyone wins right? You're not out of pocket and they can move somewhere else with their mates in tow.