Hi all,
couple of monthes ago, the tenants in my IP complaint to the property manager about the driveway to the garage is faulty and damage his car every time he access to the garage. ( because the driveway is a steep slope and every time car touchs the driveway cause the car damage)
it's a old unit, most of the resident knew this steep drive way issue, hence most of residents didn't park their car to the garage.
the real estate agent didn't tell us the tenants face this issue seriousely and we don't know the problem well ( we only hear about it maybe once), until recently, the agent didn't send us some monthly statements and the rate payments. we chased up the property manager, but every time we left the message no one call us back. we got really frustrated because hardly get hold on to the property manager.
Hence we decided to change the property manager, then new property manager told us about this driveway and garage issue cause the tenant unhappy and seeking compensation ! we are really stock about it.
the new property manager will have initial takeover inspection the property and chat to the tenant about this issue.
Question,
should we go the initial takeover inspection with property manager and the tenants ?
what should we do if the tenant seeking huge compensation ( claim because of the driveway damage their car ) ?
I am also thinking to sell this IP after July this year, so what is the best way to approach this ?please help
So a tenant wants compensation because they damaged their own car on a drve way that you don't own?
Why are you trying to contact the previous agent?
Just tell the tenants you are not responsible and won't be providing compensation
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
The tenant needs to contact the Body Corp of the units. It's not your problem. Tell your agent to pass the body corp details to the tenant.
Tell the tenant to get themselves a car with more road clearance but seriously if the driveway is an issue then it is BC’s problem to fix not yours. Send the matter to the executive committee, get it on the agenda either for the regular exec meetings or for the AGM with a course of action to improve the situation for all owners.
Which state is the property located in? If it's in Victoria I can definitely offer some advice on this.
The tenants have rented the property in its current condition. Having said that, because the property was rented inclusive of a car space, access to the car space/garage/car port must be functional.
First of all, is the driveway common property (one driveway to the garages of all units)? If so, the owners corporation/body corporate should be made aware of the issue and a request made to seek a remedy and compensation may be able to be lodged with their building insurance under public liability. There may be a clause in which the tenant needs to take the owners corporation/body corporate to the relevant tribunal and an order made before a claim is lodged with the insurance company. This is dependent on the details in the policy.
If the driveway is not common property and they've been good tenants in terms of rental payments and keeping the property well maintained, I would definitely suggest negotiating an amount of compensation if they can provide 2 quotes for the repairs to the car. If the previous agent had reports from the tenant of this issue and did not forward them to you, then you will need to seriously consider full compensation to the tenants. You will need to rely heavily on your agent's negotiation skills by the sounds of it the tenants aren't happy.
Bottom line is – this issue with the driveway causing damage will need to be solved to prevent future claims for this tenant or another. A concrete repair company may be able to shave down the existing concrete to make the driveway more useable. It won't be a cheap exercise, but it may prove a good move in the long term.
This sounds like it could be an unfortunate example of a lack of communication on the agent's behalf, something that I hope will be weeded out of our industry as property owners become more educated and involved in ensuring their asset is well looked after.
thank you for the reply guys : )
becasue it is a old unit, most of the residents are the owners. they don't mind or don't want to spend lot of money on fix up the driveway. everyone knows and parks their cars on the street happily.
the tenant is seeking for compensation, but I don't know what kind of compensation they are after.
they may asking for rent reduction ? but even the area without garage are still charging the same rent as my unit. they are saying that the lease agreement was stated 2 bedrooms with "garage" so they are entitled for the garage.
i don't want to reduce the rent it's a fair market rent (even without garage), but tenant sees the garage is disfunctional becasue of the driveway access.
Hi Andy- you could always let the tenant know he can move out if he isnt happy with the driveway. It sounds like you could get another tenant easily, probably paying higher rent than the current tenant if units with no car spaces/garages are renting for the same as yours. Either way, there is no way I would be paying any compensation.
Seriously, if you hurt your head by banging it against a brick wall, most people stop banging their head against the brick wall. Why the hell has the tenant kept driving their car up the driveway if it is doing damage? Not your problem I say.
Luke.
A very interesting post I must say ….
I too recently had a situation whereby one of my IP had a faulty solar hot water system installed on the roof. The pressure release valve for the unit was broken causing a massive water leak over a period of 2-4 weeks (as this is not an easy fault to identify due to the fact that the unit is on the roof & water was gushing down a pipeline; hence no leak into the property)I had tried several times contacting the builder (as the IP was newly off the plan; approx 18 months old) who wouldn’t own up the issue but to cut the story short, I managed to get the installer of the hot water system to replace the valve & fix the leak issue. Next, my tenants faced a massive water bill (approx $1600) and we informed tenants to apply for water leak allowance that reduced the bill to $550.
As these tenants have been really good and managed to proof that their usage (over 2 years) has been extremely, I negotiated a 50-50 split of the bill with them. They were happy & I was lucky to have such tenants. However, if I had bad tenants who may have stuck to the point that the water leak is not their problem; what could have happened? Would I have to fork out the large bill?
Just wanted to get your expert advise in case I or anyone else falls into a similar situation down the future?
NM7
If the tenant reported the complaint to the original property manager, then the PM has a duty to attend to the problem somehow on your behalf.
Did the PM fail in their duty to do that ?
Did the original PM advise you of the problem ?
Did you fail to attend to the problem when the original PM reported it to you? (like referring it to the BC)Sorry about the pointed questions but tenants complaints must be resolved by a PM when reported or passed on to the correct person by the PM.
Cheers
thecrestthecrest | Tony Neale - Statewide Motel Brokers
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Email Me | Phone Meselling motels in NSW
Andy – your PM should be communicating clearly what the tenant is requesting and letting you know you options. Despite your unit being rented below market value, a rent reduction would be a reduction from the rented amount stated in the lease agreement due to loss of use of the garage.
In future you have two options – to push with the owners to get the driveway fixed, pointing out that being unable to use it will affect their property's value and saleability.thecrest – PMs won't attend to a large issue like this without consultation with the owner, if they had arranged a huge repair to the driveway and sent the owners the bill you can imagine the headaches it would cause. If it was reported, they have clearly not communicated correctly with the owners… which is terrible!
NM7 – that's a fantastic outcome and I applaud your ingenuity in tracking down the installer. If the tenants did not agree to pay half the water bill, you would have to calculate the tenant's average usage, have them pay their normal usage portion and cover the rest. Personally, I would try it on with the builder and the installer to get it paid – some may consider this a bit cheeky but if they're at fault they'll pay or you can take action against the builder (although this can be long-winded and expensive). Technically the tenants were not at all liable to pay the additional water as it was due to a required repair, so you did well.
Here is how these problems start. REA did not handle the tenant complaint problem either themselves, did not report it to the owners or to the BC. PM is poor communicator so is not professional.
It also appears the owner heard about the problem once, but they don’t say when or from whom. So they knew about it.Quote from Andy Donnelly :
. . . . “the real estate agent didn’t tell us the tenants face this issue seriousely and we don’t know the problem well ( we only hear about it maybe once), until recently, the agent didn’t send us some monthly statements and the rate payments. we chased up the property manager, but every time we left the message no one call us back. we got really frustrated because hardly get hold on to the property manager. . . . “.
You’re correct in saying that in showing the property to a prospective tenant, it is assumed that any feature of the property functions properly or the tenant be advised to the contrary.
If the tenant decides to take action, the REA will take the first hit, and since they represent the owner, the owner will take a hit too.
Everyone runs for cover at this point.Been there, did my time as a PM running a rent roll.
Cheers
thecrestthecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
"you will need to seriously consider full compensation to the tenants"
Am I missing something here? Wouldn't the tenant get his car repaired via his insurance and it is up to the insurance company to chase body corpprate insurance or REA or owner. And explain to their insurance company why they repeated continued to further damage their car?
I agree the access to the garage should be fixed as a priority – especially if you're considering selling the unit.Maree,
The tenant would then have to pay an excess and their premiums would be likely to go up. Whilst I agree it was downright silly of them to keep using the driveway even though it was damaging their car, tenancy tribunals will likely see it as follows – the use of the driveway damaged the car, the landlord didn't do anything about it, tenants eligible for compensation.
I'm not saying it's fair at all, but generally speaking tenancy tribunals are tenant focused… Although we all wish they weren't!
The idea here is to negotiate an amount of compensation with the tenants… not necessarily the full amount it would cost to repair the car. Because if the matter is elevated it is highly likely the tenants will be awarded full compensation and a small rent reduction until the driveway is useable.
Kristin Simondson PBRE wrote:Maree,The tenant would then have to pay an excess and their premiums would be likely to go up.
This is incorrect, an insurance company will not raise a premium, nor do you have to pay an excess if you are not at fault, as long as the responsible party is identified (in this case the owner). The premium may change only if, after investigation, the tenant was found to be at fault for the damage to his car and not the owner.
If my garage door did not open and I rammed my car through it, I would not only be at fault, I would be liable for damages. In this situation if the tenant used it, he is responsible for all damages to his car not the owner, had he parked his car on the street and the car was vandalised, damaged or stolen he may very well be able to point the finger at the owner as he could not get to the garage.
Also if he had parked on the street he may be able to claim for a reduction in rent costs as he could not use his garage – not so if he has been using it, and if he is a good tenant offering him $10-20 a week less is a fair amount if he cannot use the garage for his car, remind him however he can still use it for storage. If he wants more off as he cannot use the garage ($20-$50), tell him that you will gladly remove the garage from his use and reduce the rent (changing locks so he cannot get to it), however he will not be able to use it for storage or access, and perhaps you can rent out the garage to someone else who needs storage… you could probably rent the garage out for $50-200 depending on the location (outer suburb vs inner city).
At the end of the day it is a negotiation and both sides giving a little is the way it should go, if he is going to be firm about it take the garage away, if he is willing to negotiate, then try to come to some compromise, as a small rent reduction is not a lot of money and any loss can be offset on tax anyway so the loss is even less.
(It appears other owners do not want to fix the problem, if they do then great, but this is a solution for if repairs are not going to happen).
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