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Bond Claim: How do you mitigate losses in a trashed house

Discussion in 'Property Management' started by legallyblonde, 24th Jul, 2016.

  1. legallyblonde

    legallyblonde Well-Known Member

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    A scenario a family friend is having at the moment (FYI don't buy in rural Tasmania). Tenants abandoned the property without notice and the landlords are out of pocket 11 weeks rent and 20k for repairs. They Bond Authority people are requesting evidence of mitigation of losses.. The house was re-advertised for rent almost immediately, but the main issue is they are waiting on the insurance claim so they can fix the place up. The property is perhaps liveable but there is obviously very little interest due to all of the damage. This seems to be an incredibly awkward situation.

    I was also pretty unimpressed that the Bond people said in their correspondence that they cannot claim owed rent for periods where repairs were being conducted, which is ridiculous because the tenants caused the damage in the first place!

    Does anyone have any experience with this kind of situation. The family friend is going to dispute it, but they are well aware they will probably be unsuccessful and will have to rely on insurance.
     
  2. thatbum

    thatbum Well-Known Member

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    Who are the Bond Authority exactly? Are they the equivalent of a tenancy tribunal over there, or are they something else?
     
  3. legallyblonde

    legallyblonde Well-Known Member

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    Rental Deposit Authority is the word I was looking for. The body that holds the bond =)
     
  4. Ricky Adelaide

    Ricky Adelaide PM in Adelaide -Elizabeth Salisbury Modbury Business Member

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    Hey legallyblonde,

    I feel for your friend. Being that its a rural property would only make it all the harder to re-let.

    Did the tenant leave and break lease - or did they fall off the radar and their agent find the property emptied and already a fair bit behind in rent by that stage?

    You have mentioned that the property was still in a good enough quality to rent - though not idea and was advertised immediately for the same rent I assume. I would be suggesting that steps like reducing the rent if the response to the add was not appropriate (include steps taken for communicating this to the previous tenants- even if attempts failed) , numbers of opens conducted, if they had cleaning and yard work done to maintain the property etc should be recorded. I would also be inclined to present the steps taken along with RP data showing the average vacancy periods in the area to demonstrate that will reasonable step have been taken to minimize any loses in finding a new tenant.

    Normally as far as damage goes I have yet to be asked by a SA tribunal member(I am a PM/Investor in Adelaide) to show how I minimized loses for repairs required unless the claim was stupidly high for a small issue (like your patch and paint invoice states painting the whole wall- they will eat you alive if your trades person was silly enough to invoice you like that lol)

    They may argue that the repairs were required to expect the same rent and has affected the outcome. Personally if the area is normally renting in 1-2 weeks average I see them having a case but I would refer t the local data that supports your argument of what is a realistic time in that local area to secure a tenant and is that cost likely equal to or more than the bond.

    Get them to speak to their insurance company first and find out if they need an amount above the bond awarded and how it may affect their claim. Then move forward from there- if all they need is the bond claimed in full and the insurance company will cover the rest it will make their life a lot easier ..... but check first.
     
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  5. legallyblonde

    legallyblonde Well-Known Member

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    @Ricky Adelaide Thank you for your amazing thoughts!

    They selfmanage like many rural people in Tassie. I believe they were chasing up arears when they were tipped off that they were moving. (Context... the family friend and her partner are longtime posties so they know everyone)

    Reduced rent is a great idea!

    Without looking long vacancies would be the norm... it is over an hour from Hobart.
     
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  6. legallyblonde

    legallyblonde Well-Known Member

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    Update: My friend was successful in getting the full bond refunded! Thank you @Ricky Adelaide ! She is thrilled!