We have been blessed with a tenant who has walked away at the end of her tenancy with a house and yard full of junk, damaged most areas of the house including ripping out electrics, defacing the walls, removing doors, and has left carpets that can only be described described as 'pitch black'. I would estimate the repair bill will reach $3,000, and that is with me doing much of the work such as cleaning and painting and rubbish removal. This is 4.5 times her bond.
I am trying to get clear on my legal avenues here. It seems as a landlord I have few (if any) but I really dont just want to cop this on the chin and walk away – and let her get away with such terrible behaviour and most likely do it to another landlord. Clearly tenants such as her believe there is no consequence for such behaviour. Well, I want to send the message that this is unacceptable and punishable.
I'm looking into the following. Can anyone tell me whether these are options?
- File a police report for wilful damage?
- Take her to court? Does a judgment against her or her no-show lead to a strike against her credit/finance record (this is what happens in the UK, meaning no loans, bank accounts or credit cards ever again for the person, a nice incentive for them to comply with the legal action)
- Alert all agents in the vicinity?
- Can I alert any tenancy databases?
Many thanks everyone.
hi chelley sorry to hear about this mess.
tell me are you self managing? i recognise this can happen to anyone even if professionally managed.do you have landlord insurance? hopefully yes and it will assist you.
its a pity these types of tenants cannot be named here but i understand why that is not possible.
there is a database that agents can access but this will not help in your situation.was there any hint this tenancy was going to end like this?
regards
Thanks for your reply. I have had mediocre experiences with PM's. I have a few rental properties (6) and self manage 4 of them with agents managing 2. To be honest, I spend as much time on the agent-managed properties chasing up the PM's – plus the few times the PM managed units have come up for rent they have been vacant for around a month – my own managed units have never had vacant periods!! So I personally dont see a PM as part of a solution, I am only using them because I am not near these properties. This property is partly owned with my parents who live near by so we didnt see the need for a PM.
Of course the tenant was lovely when she moved in 3 years ago, The damage was spread over the tenancy (alot of it hidden under furniture etc) but she always assured me she would repair on moving out. I have several messages from her from the over past 3 weeks where she assures me she has allowed a full week to clean and make repairs – I confirmed this with her again on Monday! Then yesterday my parents went to double check, as agreed, and found a dump with her nowhere to be seen. One thing I can be thankful for is that she has paid her rent up to date (which was another reason why I trusted her as I assumed if she was going to play the system she would have started by not paying rent!)
I dont have LL insurance. I've been told it is so tricky to get anything out of the policy in the event of a scenario like this that it is not worth pursuing. Is this correct?
What you can do it to take her to court. Sue her for damage to your property. You will win and get a judgment against her for a sum of money. You then need to enforce the judgment. You can go back to court and get further orders to garnish her wages, sell her property, garnish bank accounts etc – but to do this you will need to find her.It is all relatively cheap to do. But it is probably not worth doing if she has no assets or you will not be able to collect. But she will have the judgment on her credit report and it will hurt her chances of getting finance for the next 5 years.
Finally if she doesn't pay up and the judgment debt is over a certain amount – around $2700 – then you can bankrupt her.
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
Don't know where the property is located. Tenancy laws vary between states of Australia and the recourse options will vary accordingly.
Self management is a gamble, moreso at a distance.
Contact the database TICA based in Concord, NSW, ask options. Used it extensively myself . Very good people. They had to fall into line with the recently tightened privacy laws which still favoured tenants. My understanding is that to list a default tenant on the database, you must be a subscriber to TICA as a landlord or PM, and have provided ample warning about your subscription to a prospective tenant prior to agreeing to rent them a property, so the tenant is deemed to be adequately warned about the database consequences of a default. It's still so one-sided that it's easy to feel like you're the only one on the see-saw.Usually too hard getting money back from a fled tenant, especially a damaging one, you're obviously not in their league, you're too nice. Rarely do they have any assets anyway.
Suggest you photograph the damage extensively, file it away, avoid slander or your property might change hands, cop the cost, fix up the property quickly, get a good PM who is tough on screening tenants, doing photo inspections, and uses a database like TICA. Insist on being in the loop to vet tenancy applications so you can see if the PM is screening them closely and which ones they favour. The type of property will attract the corresponding type of tenant, but tenant selection is critical, like position position position.
All the above is based on very little info from your post, just offered as suggestions up front to save time.
Good luck
cheers
thecrestthecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
Hi all
Yeah, my first ever tenant as a 25 year old was dodgy – enough to turn most people that age off property investing I would think! But (as my wife keeps telling me) this isn't about me….
Firstly, you have to make a decision for yourself if it's worth all the effort for this amount of money. Or if you think it's worth the effort purely to be punitive to the naughty tenant. Personally, I'd think it wasn't. You end up wasting a whole lot of your time and life energy pursuing this, for what is likely to be very little chance at a reasonably small reward. Chasing after a bad tenant just to get them back, bring them to justice, or save the next landlord all feel negative to me, and that negativity will undoubtedly bring you down. Only you can decide if it's worth $3000.
Recently, I had a judgement made against me by the OSR who deemed that some properties I bought were worth more than I said they were in a non-arm's-length transaction. (ie, my company bought them from me). The judgement was totally ludicrous, quite unjust, and bordering on corrupt. I fought it for a while, but in the end decided to just let it go. I realised that the cost to me of pursuing "justice" further was too great, and just paid the six grand. I decided instead to put that same energy into making more money, and made more than double that amount in a short period with far less effort, and with much more positivity attached. Am I sounding too much like a hippy here??
What you do need to take from the experience however, is the lesson. Or, in this case, lessons. At the risk of sounding like a pious know-it-all, I would suggest your lessons are as follows:
1 – Property management is a skill. If you are going to manage your own properties, then you do not ever put up with people damaging your property. Deal with it immediately. Damage to your property is like an ice berg. There's always more going on than is visible to the naked eye.
2 – Choosing a property manager is a skill as well. Unless you live in an area where there are only a couple of potential property managers, you're always going to be able to find a good one if you look hard – and you should look. I think of my properties as my children, and I don't just hand them over to anyone to be looked after. I always interview prospective PMs, and choose the best one from the pool that I interview. It should be like a job application, with you as the potential employer.
3 – Being under insured is always a bad idea. The problems with claims often come from the need to prove malicious damage. This is another reason to not put up with the gradual deterioration of your property just because someone has lived there for a few years.
Good luck!
Andrew
Hi everyone
Thanks for your various responses.
Firstly I think that most of thebad things that tend to happen in our society because the culprits know that the victims will 'rationalise' the decision to pursue them against time and economic factors and will generally decide its not worth their while. They know that even though they could get punished, its almost guaranteed they won't. And what does that lead to? A society where the bad people can do whatever the hell they want because the good people take the choice to stand back and let it go. So off they go and repeat the behaviour again and again, and raise kids who will do the same as they see their parent(s) get away with it. The problem will simply compound.
I accept that our management was lacking in some respects and we have learnt the lesson. However I still do not accept that PM add much value to the process, I simply cannot be convinced of this, and as I say I have dealt with 4 different agents in different parts of Perth over the past years and the experience is always mediocre to say the least. I cannot see how someone being paid a low salary to manage numerous properties of various strangers is going to have the time or personal interest to be proactively involved.
I will look into LL insurance. As I say I have been advised by a colleague who has the insurance that the only useful element is the liability, and that to make a successful claim for damages or lost rent is almost impossible. I'd be interested in anyone elses input to this?
Last time I spoke with an insurance company handling landlord insurance and tenant defaults, they required the landlord / PM to secure a Tribunal judgement and money order against the tenant. That is then handed over to the insurance company as a claim, the landlord doesn't have to do anything more, and the insurance company is in a position to pursue the debt through the courts if they deem it worthwhile.
" I cannot see how someone being paid a low salary to manage numerous properties of various strangers is going to have the time or personal interest to be proactively involved."
In business, particularly PM, professionalism is the missing ingredient of which you speak.
PMs who act in a professional manner always act in the best interests of the landlord, otherwise they're negligent and liable.Yes professionalism is hard to find and yes they certainly are underpaid considering the difficulty of the job which I like to describe as – being required to have the knowledge of a lawyer, builder, maintenance man, IT Techie, Real Estate Agent, Tribunal Member, Mediator, private investigator, while being stuck between 2 parties , landlord and tenant, neither of whom really want to pay you the money that's required for the rent or upkeep of the property.
With the amount of verbal abuse, illwill, tension and stress and conflict involved, including death threats, it's not a job for the faint hearted, nor for the poorly trained, uninformed or unprofessional. Yes I was a PM.
Pms need to fully understand every aspect of the job, know all the laws and have immediate answers, be able to say NO in a nanosecond and be authorative take charge control freak kinda people, and hold the line for the property owner against tenant pressures.Andrew is correct, PM's need to be scrutinised during their selection, and held accountable.
But I look at it this way, like attracts like, so the level of quality of a property attracts a similar tenant.
However, a good PM can weed out 99% of the bad tenants in the selection process.
A good PM can't handle a bad tenant, only remove them, because the laws overly protect tenants.
So assuming you have a good PM then it's like this – Bad tenant, bad behaviour, Good tenant, good behaviour.
Important vitals in brief – Nice property, good PM, tenant selection selection selection.Good luck
cheers
thecrestthecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
Chelley wrote:Hi everyoneThanks for your various responses.
Firstly I think that most of thebad things that tend to happen in our society because the culprits know that the victims will 'rationalise' the decision to pursue them against time and economic factors and will generally decide its not worth their while. They know that even though they could get punished, its almost guaranteed they won't. And what does that lead to? A society where the bad people can do whatever the hell they want because the good people take the choice to stand back and let it go. So off they go and repeat the behaviour again and again, and raise kids who will do the same as they see their parent(s) get away with it. The problem will simply compound.
I accept that our management was lacking in some respects and we have learnt the lesson. However I still do not accept that PM add much value to the process, I simply cannot be convinced of this, and as I say I have dealt with 4 different agents in different parts of Perth over the past years and the experience is always mediocre to say the least. I cannot see how someone being paid a low salary to manage numerous properties of various strangers is going to have the time or personal interest to be proactively involved.
I will look into LL insurance. As I say I have been advised by a colleague who has the insurance that the only useful element is the liability, and that to make a successful claim for damages or lost rent is almost impossible. I'd be interested in anyone elses input to this?
hi chellew, we have our properties professionally managed. it is a cost but worth it when things go wrong. despite careful selection and a well located lovely property things can still happen. we had a tenant who was a professional pilot but he absconded and rent was owing and collected via the processes followed by our agent. we were not out of pocket. insurance helped too.
why he did what he did is a matter for him as are the consequences.
it is a business from our point of view and we need to protect our interests.
therefore we do as we do. the fees are deductible.some insurance companies only deal with landlords who are represented by an agent. there are landlord assoc. in some states that may also advise you. i think some have access to relevant data bases too.
it is unfortunate you have had this experience. some tenants regardless of socioeconomic status etc can be less than clean in their living habits and care of property. proper inspections and photos are essential.
good luck.
Hi again
Gotta agree with thecrest about property selection.
We went looking at open houses on the weekend, and somehow we ended up at this little dump for $250 000 (and it was still overpriced!)
Anyway, the agent asked me what I thought of it, and I told her that "scummy houses attract scummy tenants". She didn't appear to appreciate my thougths. The whole "worst house in the best street" idea may be great for capital growth, but the worst house in the street will probably have the worst people in it.
Six years ago I bought a crappy house for myself to live in – I like to think I lived within my means, as opposed to being a crappy home owner.
. Anyhoo, when I found myself with more money, I bought a nicer house for myself, and rented out the crap-box I'd been living in without doing any work on it. Suffice to say, it was a mistake. I ended up on a first name basis with the kind of people I never thought I'd have to meet! Andrew
. Anyhoo, when I found myself with more money, I bought a nicer house for myself, and rented out the crap-box I'd been living in without doing any work on it. Suffice to say, it was a mistake. I ended up on a first name basis with the kind of people I never thought I'd have to meet! 
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