Tennants constantly behind in Rent

[poidda]

I'm relatively new to the game and have had a tenant in one of my IP's for a little over a year, and they are constantly behind in rent. This month they are 7 weeks behind.

I am always onto my PM for a please explain, and the tenants eventually pay up the missing rent, but it's never in advance. The PM has given them a couple of notices (back in March) and they have agreed to vacate.

The 12 month lease is up, so no new lease has been signed as they have agreed to vacate.

An suggestions as to what I should be doing would be great.

Cheers

 

[Collector]

If the demand for rental property is high in the area of the IP then I would terminate asap and re let.

If the rental market not so hot - I would look at a payment schedule for the tenant so that they get back on track.

I would also get landlord insurance as soon as the tenant is up to date (if you don't already have it)

I would also look at your PM's rental arrears policy and procedures, maybe you need to appoint a more proactive PM.


End of the day - you need to decide what is more important; a property with a tenant that pays late constantly or a property that may be vacant for weeks if you terminate the tenancy.

 

[poidda]

If the demand for rental property is high in the area of the IP then I would terminate asap and re let.

If the rental market not so hot - I would look at a payment schedule for the tenant so that they get back on track.

I would also get landlord insurance as soon as the tenant is up to date (if you don't already have it)

I would also look at your PM's rental arrears policy and procedures, maybe you need to appoint a more proactive PM.


End of the day - you need to decide what is more important; a property with a tenant that pays late constantly or a property that may be vacant for weeks if you terminate the tenancy.

Cheers. The rental market is good. It's a 2 bed Unit in Morningside, Brisbane. It is currently undervalued at the moment, so not a big issue to relet. The thing is, I don't want to have to kick them out, but 7 weeks is getting a bit much. I have asked the PM to organise an inspection (for me) and I will decide once I see the place what to do.

I do have landlord Insurance also, so not worried from that perspective.

 

[wylie]

If you have insurance, and it is under valued as far as rent is concerned, I would definitely be following through with getting rid of these tenants.

 

[xcesiv]

Maybe evaluate if the PM is also biting down on the tenants hard enough.

I guess i have been lucky and never had late rent. a PM that runs a tight ship is what you want.

Also, maybe suggest the tenant pay weekly rather than monthly...

I know some people find it easier to budget weekly as they live pay chq to pay chq.

 

[skater]

The PM has given them a couple of notices (back in March) and they have agreed to vacate.

Back in MARCH???? And they obviously have not been followed up. They should have either had a termination notice or a payment plan in place and if they did not follow through back it goes to tribunal, IMEDIATELY. Some tenants are extremely good at not paying and you need a PM who is tough on tenants (you need to get tough too, remember you are not the Housing Department).

I would also look at your PM's rental arrears policy and procedures, maybe you need to appoint a more proactive PM.

Agreed!

The thing is, I don't want to have to kick them out,

You may have to. The longer you let the problem slide the worse it will be. Toughen up! Some tenants need to be evicted.

 

[xcesiv]

Slight offtopic question.... But fits into the topic.

Can a Landlord put in a clause into the lease contract Interest Charges on late payments.

 

[twobobsworth]

Your tenants are only as ever good as your PM.

 

[poidda]

I have just got word from my PM, that the notice to leave expeires today. Which that would be 90 days since it was served in March if this makes sense. The PM says that they are taking her to court, and they are just organising a date.

So my next questions are:

a) Do I need/want to be present at court?
b) What costs are involved here?
c) How can I tell if it's the PM, or tenant who is the issue here?

 

[gg1965]

I'd attend the court. Not to say anything and not to be part of the action - but to view and watch how your case, your investment, is being handled.

My thoughts anyway.

 

[xcesiv]

yeah i would wanna be at court... To make sure ur being represented as best u can.

 

[poidda]

Yeah, but on the other hand, I can see court being a waste of time. (and money for me as I'm a contractor)

I'm up against a single mum. I really want to get this sorted without the hassle of court.

 

[Propertunity]

Can a Landlord put in a clause into the lease contract Interest Charges on late payments.

In a word - NO. It violates the Resi Tenancy Act.

 

[Propertunity]

a) Do I need/want to be present at court?

Nope. That's why you hired a PM. "You don't buy a dog and bark as well" as the saying goes. Haven't you got better things to do?

b) What costs are involved here?

It is documented in the PM agreement that you signed with the REA. Go have a quick read.

c) How can I tell if it's the PM, or tenant who is the issue here?

You can read up on the Resi Tenancy Act and then micro-manage the PM. For me - I have more profitable things to do with my time.
Late rent all the time = tenant problems (even if you have a lazy PM)
Tenants know how to "work the system" so they can forever be paying late and there's not a lot you as a LL can do - apart from terminate on expiry.
Your PM is taking the right action by going to the Tribunal to seek orders.

 

[twobobsworth]

The 12 month lease is up, so no new lease has been signed as they have agreed to vacate.

Why I request 6 month lease only.

 

[Jazza]

I am always onto my PM for a please explain, and the tenants eventually pay up the missing rent, but it's never in advance.

"The tenant must pay in advance on the ___ of every ___."


'Rent never in advance' breaks rental agreement grounds for termination, kick them out and move on.

If this is too hard/difficult for the PM get a new PM too.

 

[jingo]

I have just got word from my PM, that the notice to leave expeires today. Which that would be 90 days since it was served in March if this makes sense. The PM says that they are taking her to court, and they are just organising a date.

So my next questions are:

a) Do I need/want to be present at court?
b) What costs are involved here?
c) How can I tell if it's the PM, or tenant who is the issue here?

a) Technically you don't need to be in court. I had a tenant evicted and I let my pm handle the whole thing. I trusted this pm though as she is highly effective. As you are unsure of your pm's capabilities in managing the property, I'd probably go along to the tribunal and have a listen to what happens.

b) Your pm should be able to fill you in on the costs. In my case there were none- but we pay a slightly higher management fee than other agencies charge - and it is worth it!

c) Going to court may allow you to see how effectively your pm operates.

In the mean time you could check out some of the other local agents. Perhaps interview a couple and see how they manage arrears.

Good luck with it. I know once we got our troubleseome tenant out life became so much easier. We renovated the place (well refurbished) and attracted a much better quality tenant. Haven't looked back since.

All the best.

Regards Jason.