Greetings all,
We have a rental property and we got the following message from the tenant. My question is – what would you do? We don't want to be out of pocket but don't want to force a tenenat to stay in our property since we all know what that can lead to.The agent received a call from the tenant rather distressed because her electricity bill
as been over $1,000 because she is using the split system heater.
She has been in touch with the electricity department because she thought there
could be a problem with the heater. They have explained to her that it is 1.5 star
energy rating which means that it uses a lot of power.
Her lease expires on 18th December 09 and she cannot afford to keep paying
the electricity bill.
Note there is the coonarra heater which she can use to reduce her bill,
but she said that it does not pump out enough heat to stay warm.
Her question is would you release her from her lease without penalty so she can
find other accommodation that has better heating facilities.Any/all comments appreciated!
Thanks! JenGet the property manager & tenant to find an alternative tenant & whether you get the current tenant to pay the costs of replacing her then becomes an easier decision.
Has the tenant stopped/reduced using the heater? Otherwise her bill will be higher again.
Maybe you need a more efficient heater to use in conjunction with the Coonarra heater
I used a
NoBo heater when I lived in a house with limited heating for my two new born daughters.
See http://www.productreview.com.au/mpl/1106/2524/Nobo_Electric_Heaters
Or something of similiar design as there as other makers of similar heaters on the market.
here is a price list to get an idea of there cost
http://www.getprice.com.au/buy-best-nobo-panel-heaters.htmIf you have gas a central gas heater may be an option or a combined central gas heater and evaporative cooler system cost about $6000 – $8000 depends on installation requirements.
Your replacement tenants may also find an expensive electric bill to be annoying and you could face the same problem.
Alot depends on the current rental market,
I know of friends who going back a couple of years ago loved it when tennants wanted to break a lease – it was perfect time to up the lease. One such occassion original tennant paid up until Wednesday but final inspection done one the Monday and keys returned. The new tennant moved in on the Tuesday (number of days house empty minus 2) rent increased $80 and 6 months rent paid in advance.
Now this sort of thing is not going to happen in current climate – but put it back to them if they can secure a new tennant then break the agreement.
I think it also highlights the value of paying higher prices for household appliances – even when they are rentals. with a 1.5 star heater you could be having new tennants every year with a 5 star your tennants may stay on 3-5 years. How many weeks of vacancy would it take to equal the price difference?
No-one is going to be happy paying a utility bill that high.
Is the coonarra heater wood? Wood can be equally as expensive depending on the location of the property? Can you appease the current tenant by turning the wood heater into a gas heater?
sounds like a lame excuse to me. But if you can find another tenant at the same or higher rent it is 'no skin off your nose'
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
I don't think that you have any legal obligation to allow the tenant to break the lease without penalty. However, I expect that the tenant will be able to take you to the Residential Tenancies Tribunal and be allowed to break the lease on "financial hardship" grounds.
Is the rental market tight in your area? Would it be easy to secure another tenant?
I have trouble with Gibbo's comment about upping the rent on lease breaks. To the best of my knowledge, if a tenant breaks their lease and is liable to continue paying rent until a new tenant is found, the landlord cannot up the rent until the original lease would have expired. If a landlord wants to up the rent then the lease must be terminated by agreement, which means that the tenant's financial obligations come to an end. They don't have to pay rent, advertising etc to find a new tenant.
Gibbo's friends may have terminated the leases by agreement and upped the rent. This would be a good thing to do if your property is currently rented under market value. You can then up the rent.
As a moral aside, I would do something about the heater. I think a $3000 electricity bill is unreasonable. All it will do is put tenants offside. I am a bit believer in keeping tenants happy. I once had a property where the hot water service was not able to be put on a cheaper tariff, so the power bill was astronomical. Rather than upset the tenants, I put a timer on the service. I also notified all tenants of the need to utilise the timer to avoid high bills. If I was in your shoes, at a very minimum I would tell tenants that the heater is expensive to run. I would probably even put it in the rental agreement. Otherwise you run the risk of further tenants taking you to the Residential Tenancies Tribunal, which is very pro-tenant.
Just my two cents' worth.
Cheers
K
Linar,
Yes the leases had been terminated. This was in the days in Perth where 1 small advert in the paper was enough to get 10 people through a home open.
I agree with Linar regarding keeping the tennants happy. Small investments in quality appliances can save headaches down the track
Linar very sensible. Some council a little perhaps with just one phone call and you could install a timer both for now or if the tenant goes and for future tenants. Also most electrical companies have hardship programs and payment systems and also a $500 once a year Energy Releaf Grant for anyone on Health Care Card or Centrelink.
I'm in process of tenants negotiating out of the lease, i've three people go through today and more inquiries then selected what i think seems like a better tenant. My tenants completely moved out of the building and was still paying up one month in advance.
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