Hi All,
We have had our IP for 3 years. Had a huge amount of problems with both tenants and PMs and after 2 appearances at VCAT and countless phone calls to Consumer Affairs (VIC) and EARS (Estate Agents Resolution Service) I am now at a loss regarding where to turn!!
We are now managed by our 4th Agent and if this doesn’t work then am willing to self manage.
First tenant came with no leasing history, we knew that but weren’t prepared for the house to be guttered after 4 months (just under $20 000 damage claim).
QUESTION 1 :
The agent failed to do the first inspection at 3mths and it was only after we did a ‘drive by’ that we noticed that things didn’t look ok there.
Insurance paid all but about $5000 damage but the tenant went bankrupt so we couldn’t enforce our VCAT order = LESSON No 1 !!!!
Can we pursue the Agent for the remaining debt because they failed to do the inspection. Had they done so, it may have saved us from a lot of the damage.QUESTION 2:
Second tenant came along and requested a 3 year lease, despite us only offering a 1 year lease. They said that they were concerned about unexpected rent increases…so we obliged.
They didn’t like living in the area as it turns out (too isolated…small surfing village) and repeatedly asked to break the lease from the 9 month mark. We kept saying no because they wanted us to waive the break lease fees.
Eventually they agreed to pay break fees so we let them out. 5 days later they had hightailed it, threw the keys at the agent and drove off. No forwarding address, numbers etc etc. They told the PM “you can have our bond”.
House was not cleaned, dog hair everywhere, poo smeared into the decking (new $25 000 decking!!), 6 holes to the deck where they had bolted their furniture etc and also a rotting benchtop where water was left to sit.
Have just been to VCAT and the tenant lied under oath…said that he had reported maintenance on the benchtop 12 months ago (which he didn’t) …so I was awarded no damages. Magistrate said that the PM was at fault……
So how can I get compensation out of a PM??????? So not fair!Cheers
KTSimple truth of the matter, you probably cannot get compensation from the property manager. Essentially, the decision to accept or reject a tenant lies with the owner, not the agent (they may recommend but not make the ultimate decision).
From the sounds of it, the tenants have caused some damage to the deck but not irrepairable – yes the deck cost alot but it is still useable at the end of the day – sure it needs to be cleaned and possibly have the holes patched or the few slats replaced however it is not unusual for a deck to be used or misused by tenants.
Where you could prove negligence on behalf of the agent, then you may have a chance (about the same as a snowball in hades). Do they have a record of the "water damage", was it noted on the interim inspection reports? Why did the PM not buck up about the lies/falacious report?
Do you have rental insurance? That is a VERY cheap option, usually less than one weeks rent. My rental insurance covers me for up to 12 months rent should the tenant cause more than $1,000 in 'deliberate' damage.
As for th REA/PM:
1. lodge a letter of demand for the damages caused with the REA/PM due to their failure to perform their obligations under the contract ie. a fundamental breach of contract that resulted in a specified amount of damage,
2. Lodge a claim thru the small claims tribunal (this will ensure that legal costs are not incurred) for the sum lost due to a breach of contract re failure to complete inspections as per the contract terms.
3. Lodge a complaint with the state RE organisation,
4. Lodger a similar complaint with the state Gov department that issues a licence for the REA/PM.Thanks guys, I did lodge a complaint with the Vic REA Service …this is handled by Consumer Affairs Vic who wrote to the Agent asking for an explanation.
The Agent FABRICATED a condition report and said that the damage ‘must have occurred after their last inspection’ which was completely untrue, it takes more than 4 weeks to get a rotten benchtop.
They may have done inspections over the 18month period but there are absolutely no written records of any of them. I have each maintenance request by the tenants in my posession and nothing was ever reported about the bench.
I think it is liar versus liar and we are just the suckers in the middle!Re the decking, agree – easy to fix but the kitchen bench will be very tricky.
We were told we couldn’t reject that tenant’s application (to rent) because the husband has Parkinson’s Disease and the wife was an anxiety suffering carer …so it would be ‘discrimination’ if we didn’t accept them.
VCAT are a big toothless tiger anyway!Re rejecting/accepting any application…you are ALWAYS able to justify your decision torent to ANY person based on;
A. THeir ability to pay on time, every time, AND
B. THeir ability to properly maintain the property at an acceptable standard. If the person appears to not have that ability, for whatever reason, then you are withing your rights to reject them. This goes for an applicant that has a spotted employment history or little/no rental history.
You are NOT a charity nor are you a bank or a state based housing authority; you are a business. If the state housing authority wants to take them on, then let them tak ethe risk.
I do not think that the VCAT would be able to overturn your decision based on past DEMONSTRATED ability to pay and to maintain a property to a proper standard.
You would not be discriminating against their application based on their disorder, rather you are basing your business decision based on demonstrated ability and future potential to properly maintain your property and their ability to pay on time.I had a property where the tenants bolted and left the property in a terrible state. my new property managers insisted that the previous property managers had to organise and pay for the repairs to the property as they were negligent in their 'property managment' a term i use very loosely!!!! Although it did take some time. The previous PM did organise and pay for repairs. i was out of pocket for lost rent but not the repair costs.
Stick to your guns and show the PM that you mean what you say. i threatened to go to the office of fair trading, i don't know whether that played a role or not.
I did feel bad for the previous real estate as they were completely unaware of the poor job that their PM was doing until she left the firm and then they became aware of the numerous properties that were in rental arrears etc. As an aside they no longer manage property.
Look around for a good agent! Sometimes an agent a little out of area will do a better job than the locals, you said it was a small surfing town? Local agents may feel they don't have to fight for the work if it is isolated.
I am a little confused though, VCAT claim of $20,000? Max you can claim at VCAT is $10,000 anything more and it is a matter for small claims court.
If you can prove that the agent has been negligent then yes, you should receive some compensation from the agent. You obviously keep all letters and emails, is one sent after each inspection? Could you not talk to CAV about the time it would take for the damage to occur and compare that to the dates on your letters and emails? Have a trade attend and write up a report stating that it would take longer for that damage to occur than the time elapsed since the last inspection, forward that to your PM. See how you go from there
.First time i went to VCAT was only for $5400 (out of pocket after Insurers paid out the $20K) – it was easy as she didn’t even turn up.
Second time not so good.
CAV told me through all their correspondence that they effectively can’t ‘make’ a PM pay us any compensation….because they are saying that a rotten timber bench top is ‘wear & tear’ and we are obviously saying that it is neglect.
The tenants lied at VCAT and said that the kitchen tap was leaking and that is how the rot got there. That is why they got out of paying me any comp.
The kitchen tap was never leaking and there was never any report of that to the PM either.
Here lies our biggest problem!Are you able to find any direct cause for the rot? The PM should have got a plumber out there to do a written report on the cause and taken that to VCAT with them.
Unfortunately it is a heavy loss but also know from now on that you can refuse ANY application. As an owner in VIC you don't have to provide any reason for rejecting the application and if you provide no reason you can't be charged with descrimination.
You have you solution looking you right in the face. If the tap was leaking, the tenent is under a legal and contractual obligation to immediately report any and all repair needs, especially ones that cause damage (rotting benches). They would also be required to point the leaks out to the agent at the 3 monthly inspections at the very least.
Still go after the agent via:
1. lodge a letter of demand for the damages caused with the REA/PM due to their failure to perform their obligations under the contract ie. a fundamental breach of contract that resulted in a specified amount of damage, (NOTE: if the REA is a company you can seek to have them declared 'trading while insolvent' under the Corporations Act should they fail to pay a letter of demand for a debt).
2. Lodge a claim thru the small claims tribunal (this will ensure that legal costs are not incurred) for the sum lost due to a breach of contract re failure to complete inspections as per the contract terms.
3. Lodge a complaint with the state RE organisation,
4. Lodger a similar complaint with the state Gov department that issues a licence for the REA/PM.Have a go at the REA, nothing to lose, might get lucky. At least it brings the REA to the notice of the authorities.
You never know what else they might find.Last time in tribunal, I defended my tenant daughter against a totally unscrupulous landlord and a worse REA.
Didn’t get a fair shake in Tribunal but reduced their claim from $3K to about $400.
Can’t win ’em all but it feels good to make ’em sweat for it.Good luck
Cheers
thecrestthecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
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