After buying our first IP and spending a lot of time fixing it up P.J Strong Real Estate in Gatton, Qld, told us they could get a very good rental return for our property about $20 more then other agents valued the rent at. Against our gut instinct we went with them.
All was going well until we went to the house to install an air con and found in just two of the four rooms, 7 mattresses on the ground, also there were 4 minivans and a sedan in the driveway and about 10 asian backpackers coming and going, just in the few hours we were there. Our house was being run like a backpackers the neighbours informed us, even though on the lease only 4 people were aloud in the house. The tenant was charging these asian fruit pickers upto $80 a week to stay in our house.
We went straight to the the agent and told them what was happening. They said they had no idea this was happening, but if this was the case we should get at least $300/week up from $230 and the bond should increase, simply just because of wear and tare on the house, they would get straight onto it.
Two weeks later we had to call P.J to find out what was happening. They said they had had a meeting with the tenant and they assured the agents that there was definately only 4 people in the house. We had to encourage the agent to take it furthure reminding her of all we had seen.
After 4 weeks, it was finally sorted out after we had to contact the RE a number of times. The agents called us and pleaded the case of the tenant, saying that she doesn’t make as much money from the house as first thought, admitting that she had lied originally about how many were staying in the house, but some days there was no one in the house and she still had to pay us the $230.
The RE actually rented another house to this tenant as well and after explaining that the tenant could not afford to pay much more rent then the $230, even though they were making possibly $800/w from our house P.J Strong said they would happely let us cancel the lease so they could find them another house and us another tenant. Even after the breach of contract and the lieing.
We informed them, that if the tenant leaves we will be leaving them because we thought they knew what was happing.The real estate was extremely rude to us over the phone and denied any wrong doing and hung up on us. We have now terminated our agents contract and the lease.
Sorry this is so long, but I just can’t believe that this happened. Has anyone had any similar experiences? Does anyone know any course of action we can take against them, if any? Or should we just leave it and get on with it?
Was the rent paid on time?
Apart from not formally informing you of the sublease, was there any other breach of contract on the lease?Not a nice situation I know, but you cannot legally stop someone subleasing a property. The legislation states that they must have permission from the landlord to sublease but even if they don’t as long as rent is paid and the property is not abused, the landlord can do nothing! The landlord cannot legally prevent someone from subleasing a property (under SA legislation anyway)
You can increase the rent to allow for wear and tear as the agent suggested, but apart from that the lease allows for subleasing!
Investors do this type of thing all the time, sublease student accomodations, sandwich lease options etc, these are all investing strategies based on subleasing that’s because it is legal!You cannot legally evict tenants just because they are making more money than you using your property unless there has been a breach of contract such as damage to the property or rent defualt!
The person holding the lease is responsible for all payments and damage to the propery. Was the property returned in a reasonable condition? If so, sorry but that’s just investing for you!!!!!
Investment Property Management
http://www.adprop.com.auJosh
Hate to disagree with DrX but i think you have clear remedy to have the tenants evicted.
The standard Tenancy Agreement in Qld certainly names the individuals permitted to reside in the property which unless modified are the named tenants. It also precludes the property being sublet and this should be sufficient in its own right to have a eviction.
Secondly talk with your Solicitor about commencing legal action against the Managing Agents. It would be appear quiet clear that they were negligent in their actions and might like to come to the party to avoid both costly legal action and the publicity.
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.Richard Taylor | Australia's leading private lender
This is a very interesting situation.
I am thinking of buying a property on a long settlement (because of subdivision) but renting the property of the owner with the permission to carry out improvements to the property. I then want to sublet the property to a normal tenant. I certainly would put this all in my offer, but according to Dr X I could sublet without this. Will check this with my solicitor early in the new year.
Richard is again right on the money as due to the scams several years ago in Qld their rules governing tenancy are a lot clearer and better defined than most.
Having recently done my sales registration course in brisbane, I can do nothing but agree with his assesment of this case. Get em out, claim the bond for wear and tear and find a new agent asap.
Its all good
DD
Buyers Agent (Dip Financial Services(FP)
Don’t sweat the small stuff,and it’s all small stuff!!In may 2006 we evicted two tenants, named in the lease document. They were actually lovely young men, but they had invited a third young chap in. He was not added to the lease. He caused lots of noise and the neighbours were pretty annoyed.
In Queensland the RTA says that having that third person living there but not on the lease is a breach of the lease. That is how we got them out. We actually would have been very happy to keep the two young fellows we originally approved (we self manage) but seeing that the police had been contacted we suggested they would be better off to start fresh.
The left the house as it was when they went in and there was no problem, but the third chap not on the lease was our “get out” card.
Obviously the laws in SA must be different.
Wylie
Sounds like you have just had a course in tenants………….
Typical real estate agents – siding with tenants and never looking after the owner. You should send this tory to Neil Jenman. He’s good at sorting this stuff out
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