NSW Compensation for landlords?

Hi all

I’m a landlord of a property in north parramatta and I’d like some advice.

yesterday I’ve been notified by the tenant that they are terminating the lease with two weeks notice which was provided to the agency on Monday due to lack of responses and non resolution of issues they’ve raised for months.

I have contacted the agency with a please explain but they haven’t been able to come up with anything tangible to defend themselves.

do I have a basis of a compensation from this agency for -
1. Loss of 1 week of tenancy given the tenant believes they have a basis for a two week termination given their needs were not met by the agency
2. Loss of 1 week of tenancy given the tenant has provided notice on Monday but the agent hadn’t notified us to start seeking a new tenant
3. Any other compensation for the loss of a tenant due to poor service

I am livid as this is a well known brand in the local area. I will be leaving them to another agency and keen on any advice on that too.

thank you so much for your time on your valuable advice. Much appreciated in advance!

 

The legal fees would be more than the couple of weeks rent.
You want to do it for the honor? That's your call.
Best bet is probably try to change agencies (according to your agreement) and move on.

 

Read your management agreement - have they breached it? Is incompetence a breach of contract?

 

I was disillusioned with my PM many years ago. Move on.

 

Yeah. Him too.

 

Its a tough one because even though they've been incompetent, its hard to hold an agency financially accountable. I would contact the Licensee/Director/Head of PM with a summary of issues and request a refund of all management fees charged since the tenant first raised their issues. I feel it would be easier to get this back than anything else, especially if you leverage with leaving a negative review etc.

We manage 2 in North Parra and have had a terrible time with a large local agency regarding a neighbour's strata breaches. Its quite a high supply unit market there at the moment because there's no metro yet and a lot of more modern/convenient options in neighbouring suburbs.

We've had much better success using non-traditional advertising (social media etc) to differentiate the property in these areas.

 

Incompetent agents do cost landlords money. I had one years ago who wouldn’t advertise the property, kept making excuses. After 6 weeks I moved agencies and it was advertised the next day. I blamed myself as well though for accepting their excuses. It wasn’t even our first IP so I can’t even say that but I did learn not to accept incompetence after that. I think you just have to chalk this one up to experience as well.

 

thank you I’ll dig it up and check!

 

Thank you all so much for your thoughtful and insightful feedback. I had suspected it will be more trouble than it’s worth but the suggestion by Mel for a refund is a sound one I’ll try out!

If you’re in Sydney I wish you all good health during this lockdown. Really challenging times for sellers and landlords looking for tenants but I try to see the bright side that we’re fortunate to be safe.

 

Firstly, have you verified it's even real? Tenants try stuff all the time.

Have you got proof of the Tenant reporting issues to your PM, and your PM not making you aware of them? If the answer is yes, then yeah sounds like something's going on with your PM, with that said though, are the issues actually valid or reasonable to warrant ending a tenancy? If the answer is no, you/your PM should handle it like a break lease and take the Tenant to task re: compensation of rent until it's re-let and all the other associated costs.

Can you please tell us about the 'issues' for interests sake and whether you were aware of them or not?

 

hi Michael

I believe it’s real. The tenant has my number so has been texting me with issues to which I’ve asked them to contact the agency. I haven’t heard anything from the agency so I had assumed that the issues has been resolved or thought no more if it.

The tenant emailed me their emails to the agency and it does suggest non response for several months - the agency hadn’t been able to produce anything to dispute this claim.

re specific issues they are
- gutter clean
- mould (which I suspect is due to the gutter clean)
- leaking tap and toilet
- damaged laundry line

I’m also really disappointed that the tenant had notified them of their intention to vacate and they sat on this for a week with no response to the tenant or communication to myself until I called asking them what was going on. I was notified yesterday by the tenant through sms not by the agency.

Just feels absolutely negligent and disappointed when they have multiple rentals and sales advertised so they are obviously in business.

 

Hi Kimmy, unless the mould is super bad, none of those issues are reasonable grounds for the tenant to prematurely terminate their lease. You don't have to accept or allow them to just go (unless you want to get new tenants). You need to contact your PM on Monday, get a straight answer as to what is happening, make a decision whether to stay or get another PM, whichever PM then needs to fix it all and business continues.

 

Basically, anything and everything can be changed at the drop of a hat if there is mutual agreement, even after a tribunal order. In that regard, let's say the Tenants don't actually want to move, but are frustrated by lack of repairs, if Lessor/Agent acts immediately to resolve the matters and the Tenant is happy then life goes on. Most people can get past initial emotional/personal differences to see the bigger picture - the saying "goals not roles" comes to mind, some can't though, for those people life can be hard as most of the world operates in shades of grey.

 

Thank you!
I’ve emailed the agency and will call them on Monday.
I’ve already notified that we’re engaging in another agency but expect them to sort this mess out.

 

In this instance they are no longer in contract so they can leave with 3 weeks notice. They have provided 2 weeks so I’ll speak with the agency on whether they have grounds to give 2 weeks not 3.

They told me they’re moving out on 17/7 (next Saturday) so I assume the decision has been made ie new lease signed and removalists booked.

 

Even though you asked the tenants to contact the agency direct - you were still aware of the issues. Even though you have hired a PM to manage your property, that does not absolve you from your responsibilities.
Did you email your PM to tell them the tenant had messaged you?
Did you check your monthly statements to see what money had been spent rectifying these issues?
When you didn't hear from the PM after receiving the texts from the tenants did you follow up to see if these issues were fixed?
I am not saying their lack of management is in any way your fault - I am saying that property investing isn't a passive venture.

 

Thanks for the feedback - and it’s our learnings for next time.
The inconvenience of follow up is much less than the financial impact of a new lease and loss of income during vacancy. At the end of the day looks like the property manager cannot be held accountable.

A loss for all involved here except for the landlord of the property the tenants are moving too I suppose..