Hi all
I current own a commercial property and I'm having a bit of issues with the tenant refusing to pay the full amount for the insurance which is part of the out going.
The amount for insurance is $1430, but the tenant argues that in the contract it states that out going of insurance is only $1000.
I had ask a few people and they said that because insurance go up each year the tenant should pay the full amount, so the agent sent the tenant an application to pay the full amount or we would take them to mediation ( i think that's what it's called).
Anyway they still refuse to pay so i guess we are going ahead with the hearing.
Can you guys give me your opinion who is at fault here and what i should do?
Sonny.
That’s a tough one. A contract is a contract. Did you put the rising cost on insurance in the contract or did you just state that insurance was $1000 for the duration of the contract.
You might have a good chance, but if the contract says $1,000 and does not allow for rising prices then you may have to wait until the contract is renewed.
Good luck.
Ryan McLean | On Property
http://onproperty.com.au
Email MeHi Sonny,
it will come down to what is in your lease (obviously, there are many variables there again). Is it a retail lease – if so, then there are remedies available for retail lessors/tenants including mediation. If it is a commercial/industrial lease, there is no such mandated process like mediation, your only remedy will be to take legal action and to rely on the proactivity of your property manager.
It is always important to read the entire lease. The lease schedule will indicate how much the tenant will pay in year one ($1,000) and lease clauses will indicate how these amounts may be adjusted (or if they can).
SNM
Thanks guys
Well the property is a retail shop, and I just had a quick look at the lease contract which also states that the tenant must pay 100% of all property out going so i guess that will help my part when it goes to mediation .
Sonny
It shouldn't even need to go to mediation if it is reasonably clear (esp in this case as a retail premises). Most real estate agents can't read a retail lease let alone interpret one correctly (according to the RLA) as there are few retail specialists in the field.
You must be logged in to reply to this topic. If you don't have an account, you can register here.
