Hi All,
Was wondering if anyone could shed any light and advise…
Having purchased a warehouse property in Sydney about 3 months ago, I ran into some legal issues, to simpify:
1. Electrical wiring was old, tenant wanted to put in new electrical fittings (e.g. floodligts within the premise and 3 phase). Did not notify either my property manager or my husband about it and went ahead with it. Had it installed and tenant appointed electrician realised the whole place needed re-wiring. They did only 10% (parts where he put in new stuff) and did not touch the rest. We were only notified of it about 5-7 days after they did the works….we brought in our own electrician who did the remaining electrical safety works.
2. Whilst my electrician and my husband were at the warehouse premise, they bumped into his electrician. The tenant's electrician then started to point out safety faults to found etc. to my husband and our electrician. At no stage did we solicit the tenant's electrician's services. As my electrician was relatively busy at the time, his electrician offered a quote – however, this was never provided to me nor my PM nor electrician nor did we verbally approve anything on site or via any contracts.
3. The licenced electrician my tenant used was his brother in law who we did *not* approve of or consent to commence any wiring works. About a month later, we receive a bill (it had the client's name and address on it) who forwarded it to my PM to demand us to pay. This was obviously followed by a letter of demand about 1 week later.
4. The invoice was rather ludicrous asking for a sum worth about 1 months work totally $35K. A lot of the work was actually stuff that the tenant had installed or requested him to install. This included the introduction of 3 phase power, extra power points, flood lighting, ceiling lights, lights on the roof, cat6 cabling as well as 2 x very expensive security systems. All of this was stated clearly in the lease, as owners will not contribute to any renovation and improvement costs.
5. We got our lawyer in and wrote back denying all responsibilities of debt simply because we had no contract or proceeded with the works nor engaged or solicited any of their electrical services.
6. About 2 months lapsed and my lawyer heard nothing from the (tenant appointed electrician's lawyer) but he said to sit on it and wait until he hears a response. Last Friday, we were informed via our PM that the liquidators have contacted him and also the tenant as the original invoices had their names on it.
The question is, where do we go from here and honestly do they as liquidators have any ground against my husband and I?
Thanks.Sorry for being so long winded.
Has your pm served notice of breach of lease for unapproved work? Why not?
The unauthorized works ie Fitout, 3 phase, additional lighting etc have any of these works been approved or could the tenant have assumed approval due to you/your pm not telling the tenant to cease? Did the tenant have to install a 3 phase meter & board? Were these discussed at the leasing stage?
Who has appointed the debt collectors? Is the work covered under the security of payments legislation? (ie has the correct notice been served to the party on the invoice? & the act followed?)
Send me a pm to discuss offline.
Who are the liquidators?
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Do you mean debt collectors?
If so, then the electrician could have sold or assigned his debt. The new assignee would have the same rights to be paid as the original electrician – which is in dispute. It would be his arguments and evidence against yours still.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Terryw wrote:Do you mean debt collectors? If so, then the electrician could have sold or assigned his debt. The new assignee would have the same rights to be paid as the original electrician – which is in dispute. It would be his arguments and evidence against yours still.At the moment, no. I believe it was the liquidators who wrote to my PM as an "outstanding debt".
That must mean your tenant is under administration? What has happened for that to occur?
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Scott No Mates wrote:Has your pm served notice of breach of lease for unapproved work? Why not? The unauthorized works ie Fitout, 3 phase, additional lighting etc have any of these works been approved or could the tenant have assumed approval due to you/your pm not telling the tenant to cease? Did the tenant have to install a 3 phase meter & board? Were these discussed at the leasing stage? Who has appointed the debt collectors? Is the work covered under the security of payments legislation? (ie has the correct notice been served to the party on the invoice? & the act followed?) Send me a pm to discuss offline.
Hi Scott,When we entered into the leasing agreement, they verbally notified our PM who in turn notified us about the proposed fitout works.
In our contract, they did not issue in writing proposed works but they were allowed to do so if required. However, it does clearlt state us owners clearly will *not* contribute anything to proposed fitout works.
I don't think the debt collectors are involved yet at this stage in time, only liquidators of his brother in law.
All the invoice details is it is covered by the security of payments legislation on the last line.
Commprop.
Terryw wrote:That must mean your tenant is under administration? What has happened for that to occur?No, the electrician (his brother in law) is under administration, not the tenant.
His electrician brother in law is currently insolvent.
I see. In that case then the administrators can continue with the litigation. How much are they suing you for? usually they wouldn't bother as their fees would be more than the get back – good way to get paid though!
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Terryw wrote:I see. In that case then the administrators can continue with the litigation. How much are they suing you for? usually they wouldn't bother as their fees would be more than the get back – good way to get paid though!$35K.
Thing is though, I never contracted them, it was my tenant who did…so he should cough up.
Must be distressing.
That is something you will have to argue about. Whats your lawyer saying? You might have to bring the tenant in as a party to any court case.
On the other hand legal expenses are likely to be high and hte risk of having to pay costs to the otherside if you lose. It may be worth considering just to pay it and claim the deductions to help offset the costs. It would have improved your building too and added value. Maybe you could talk the tenant into paying part of it.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Terryw wrote:Must be distressing.That is something you will have to argue about. Whats your lawyer saying? You might have to bring the tenant in as a party to any court case.
On the other hand legal expenses are likely to be high and hte risk of having to pay costs to the otherside if you lose. It may be worth considering just to pay it and claim the deductions to help offset the costs. It would have improved your building too and added value. Maybe you could talk the tenant into paying part of it.
My lawyer states there is really no case to answer….as there is 1) no contract 2) i/husband/pm did not contract his electrician.
Paying for it is not an option.
They will no doubt be arguing a verbal contract
Good luck with it and pls let us know what happens
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Opportunistic? Ambit claim?
You/your agent aren’t even on the invoice, how do they expect to tie liability to you?
Gets you off to a really good start with the tenant.
Scott No Mates wrote:Opportunistic? Ambit claim? You/your agent aren't even on the invoice, how do they expect to tie liability to you? Gets you off to a really good start with the tenant.To even confuse things even more, I received TWO invoices (along with my demand letter):
Original Invoice had tenant's name on it.
Subsquent Invoice had my PM's name on it and his post details (they didnt get hold of mine).Both above invoices have the same reference to the same job, site address etc. same amount but different descriptions.
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