What would you do with this tenant?

[sailor]

Just inspected a 2-bed ground floor unit that I'm in the process of buying. Last saw inside the unit about 5 years ago, but wanted to buy it, so didn't mind viewing after signing the contract.

To my surprise...the tenant has 2 (not one) motor cycles sitting in the 2nd bedroom on pink/grey marble flooring!

I intend raising the rent on the day after settlement (60 days notice), and doing the PM myself. The garden has overgrown onto the patio (by heaps), and I know the tenant is not a gardener and I intend having a gardener come in and reno the garden, and include additional gardening maintenance in the rent.

I spoke with the PM today who tells me the tenant has just signed a 12 month lease (and they've increased the rent from $155 to $165 pw. Given it would easily rent out at $200 pw...I'm going to email the owner, as we agreed tenant would be on periodical lease during the contract period.

Apart from gross untidiness, the place was filthy, but with the mandatory ginormous plasma telly!

I intend to be tough about this one...and would like some advice please.

 

[wylie]

I would think that unless the agreement that tenants would be on a periodical tenancy basis was in writing, you probably have no leg to stand on, but worth a try to see what comes of it.

If they are locked in for twelve months, I would not do a thing to the place until they move out. Whatever you do, you will get nothing for it, so why not wait out the lease, do your improvements and then get top dollar.

When things like this happen, I just think "oh well, at least I will pay less tax on the lesser rent".

I am intrigued by the marble flooring in the bedroom?

I once looked at a house for sale and there were motorbikes in the lounge and dining rooms, pulled apart, hundreds and hundreds of bits and pieces spread all over the floor. I could not even walk through the house. I was gobsmacked!! It was a great house though.

Wylie

 

[karina]

Sailor,

Sounds like you are buying up all of Cairns, leave some for us!
I would assume that if the 12 month lease has been signed the you are going to just have to wear it unfortunatly. If you have it written into the contract then maybe the vendor can compensate you for the lost rent etc.... I would have asked for vacant possession put in a new tidy tenant at $200 a week.

Congrats on your new purchase!

 

[sailor]

I would think that unless the agreement that tenants would be on a periodical tenancy basis was in writing, you probably have no leg to stand on, but worth a try to see what comes of it.

When things like this happen, I just think "oh well, at least I will pay less tax on the lesser rent".

I am intrigued by the marble flooring in the bedroom?

I once looked at a house for sale and there were motorbikes in the lounge and dining rooms, pulled apart, hundreds and hundreds of bits and pieces spread all over the floor. I could not even walk through the house. I was gobsmacked!! It was a great house though.

Wylie

Thanks Wylie. I've asked the current PM to contact me and check on the exact details of the lease and whether or not it has been signed. I've also emailed the owner and asked her to ask the PM to have him on a periodical lease.

I was counting on the additional rent to fund the loan!

I'm wondering if having motor cycles in the unit is against any tenancy laws, and maybe use that for breaking a lease (if there is one in place)?

Sailor,

Sounds like you are buying up all of Cairns, leave some for us!
I would assume that if the 12 month lease has been signed the you are going to just have to wear it unfortunatly. If you have it written into the contract then maybe the vendor can compensate you for the lost rent etc.... I would have asked for vacant possession put in a new tidy tenant at $200 a week.

Congrats on your new purchase!

Thanks Karina...LOL..."all of Cairns"...nah...this is my last purchase for this year. All funds will go on The Beach House reno.

I've learned my lesson on this one...inspect first, then sign. If unhappy ask for vacant possession. This is a good reason for not buying a property sight unseen!

 

[bernly]

Congratulations, sailor!

Only one to go now before you own the whole complex!!! Wylie is right - if the new lease is all signed and sealed you'll just have to let things go along merrily for another 12 months. You can spend the extra time on your beachhouse reno! I'd be interested to know if the PM was surprised at the state of the unit or did she think it was all hunky dory?

 

[sailor]

Congratulations, sailor!

Only one to go now before you own the whole complex!!! Wylie is right - if the new lease is all signed and sealed you'll just have to let things go along merrily for another 12 months. You can spend the extra time on your beachhouse reno! I'd be interested to know if the PM was surprised at the state of the unit or did she think it was all hunky dory?

Thanks Bernly, I'm happy with the other owner, we get on well, so no need for me to buy the other unit. I think the PM was very very surprised at seeing the motor cycle...she did a double take! I don't think she was very impressed with the untidiness and filth of the rest of the unit. Although she did try to make the excuse that the tenent was away.

 

[simonjulie]

Hi Sailor
How would you like this to be resolved?
What would be the best outcome for you?
What do you intend for the property in the longer term? Is it better to take a loss of rent upfront so that you can benefit in the longer term.
Would the tenant consider moving if you paid him to do so?
How often are you allowed to raise rents in QLD?(once every twelve months down our way) I thought QLD was different.
What other possibilities are out there? Possibilities are a lot more userfriendly than problems.
Good communication can maybe work some of these possibilities into the picture. Intend for a great outcome.
Cheers
Simon

 

[sailor]

Thanks Simon...this is my wish list:

Hi Sailor
How would you like this to be resolved?
Owner to tell PM to keep tenant on periodic tenancy.
What would be the best outcome for you?
Tenant moves out.
What do you intend for the property in the longer term?
Good clean, fix garden, paint (maybe), new curtains. Re-rent at $200 pw.
Is it better to take a loss of rent upfront so that you can benefit in the longer term.
Would the tenant consider moving if you paid him to do so?
Gosh! I hadn't thought about paying him to move! If he does move out he probably won't get his bond back...the place is filthy and garden completely over grown...and getting the grease/oil marks off will take a bit.
How often are you allowed to raise rents in QLD?(once every twelve months down our way) I thought QLD was different.
Every 6 months if tis only a 6-month lease. But if he's on a periodic arrangement, I can give 60 days notice for him to vacate.
What other possibilities are out there? Possibilities are a lot more userfriendly than problems.
Possibilities?
1. Tenant hasn't yet signed a lease.
2. Tenant might want to move somewhere where he has better motor cycle accommodation.
3. Tenant might want to move somewhere where he doesn't have to care for a garden.
Good communication can maybe work some of these possibilities into the picture. Intend for a great outcome.
Cheers
Simon

Yes, I do need to focus on a more positive outcome. I'll think on this first.
Thanks for reminding me.

 

[simonjulie]

HI Sailor
You might laugh but I have known of cases where experienced landlords have paid their tenant or given them incentive to move out. It was the best result for them at that time. In the past we have ourselves sometimes let tenants out of leases and given bonds back just to see them off. I then would go in and clean the place up and hoped to learn a lesson from that experience.
Just a part of being a landlord.
Cheers
Simon

 

[sailor]

Thanks Simon....tis always good to have a plan B...after plan A does not come off. I'm aiming for plan A this week!

 

[yadreamin]

If you get the tenant to move and withhold the bond money to cover any damage ,cleaning or repairs, but the bond money doesnt fully cover the bill can you then claim anything from your landlord insurance especially for damage?
l am now in the process of an eviction with a big repair bill.

Sailor if you have marble tiles they should clean up well. Actually with motor bike repairs going on you are far better off having tiles than any other sort of floor covering.
Good luck
cheers yadreamin

 

[sailor]

If you get the tenant to move and withhold the bond money to cover any damage ,cleaning or repairs, but the bond money doesnt fully cover the bill can you then claim anything from your landlord insurance especially for damage?
l am now in the process of an eviction with a big repair bill.

Sailor if you have marble tiles they should clean up well. Actually with motor bike repairs going on you are far better off having tiles than any other sort of floor covering.
Good luck
cheers yadreamin

Thanks Yadreamin...good points. I just hope there are no deep scratches on the floor from the motor bike stands. I'll get onto the insurers first thing in the am.

 

[Simon]

I don't think I would bother with any win/win or compromises with this character. I would just move them on even if I take a loss and start afresh.

I really hope it all comes good for you. But you know something - the more I get to know you through your posts the more I know it will all work out.

Cheers,

 

[sailor]

Thanks Simon...I'm pretty confident too.

 

[Ausprop]

gees hold up! you have contracted to buy a property and the seller committed you to a fresh lease without disclosure? that's a no-no in WA and i would be surprised if you could get away with it anywhere else as it is fundamental to contract law. what if they had leased it to their mum for 10 bucks a week... would you take that on the chin?

I sugges you chat to a lawyer, investigate your options - you said yourself that this is going to cost you. somebody's gotta pay... just a question of who

 

[sailor]

gees hold up! you have contracted to buy a property and the seller committed you to a fresh lease without disclosure? that's a no-no in WA and i would be surprised if you could get away with it anywhere else as it is fundamental to contract law. what if they had leased it to their mum for 10 bucks a week... would you take that on the chin?

I sugges you chat to a lawyer, investigate your options - you said yourself that this is going to cost you. somebody's gotta pay... just a question of who

Thanks Ausprop...I'm unsure of the law here in Qld on this issue. I'll send an email off to my lawyer pronto! I have an email from the vendor stating she told her PM she "definitely did not want the tenant on a new lease as" she was "selling the property". So at least I do have that in writing.

 

[sailor]

Quick visit to lawyer this morning to clarify the issue, and pick up a cc of the contract of sale.

Section in CoS refers to "Matters Affecting Property: Residential/Tenacies", wherein I wrote at the time the tenant's name, and that the "terms and Options" were "Finishes 11/4/07".

Lawyer said this means I acknowledge the lease finished on 11/4/07, and by implication the tenant is then on a periodical arrangement. It also means that the vendor cannot sign the tenant up with another lease, so this makes the lease signed by the PM "null and void". (Yippee!)

So I took a cc of the CoS over to the PM and showed her...gee did she look dismayed! So now she's trying to contact the tenant to tell them their new lease is a no go.

I was just sooooo relieved.

 

[AnneDe]

Good news sailor! Your persistence has certainly paid off

A good lesson for us, to always inspect potential IPs ourselves before signing contracts or ask someone to do it on our behalf and double check lease agreements.

Cheers,
AnneDe

 

[sailor]

Thanks Anne. I'm also drawing up a list of "must have" clauses for any future Contracts of Sale I get into. Putting in the tenancy details is now added.

 

[Ausprop]

yes good outcome Sailor!

If the lease had been properly drawn up, on what grounds can they break the lease? If the tenant dug their heals in, the agent could have a real problem as they have acted without instruction. The PM could potentially have to pay the tenant to leave or compensate the other parties.