Condition Report after taking over a lease/bond

Discussion in 'Property Management' started by k-dos, 4th Oct, 2018.

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  1. k-dos

    k-dos New Member

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    Hi everyone,

    I recently purchased a IP (houses) in Sydney. It got existing tenant and being rented with the same guy for almost 20 years. I'm in the process of getting a new 6 months lease & I obtained a condition report from PM but it's dated 2005.

    That worry me about possible implications on landlord insurance claims or use it as evidence during dispute as it is fairly old and not current.

    Do I need to get a new condition report for this lease so I can be covered or the old one would be suffice to use for claims & NCAT evidence? The house is not in good condition.

    Many thanks!
     
  2. Michael Mitchell

    Michael Mitchell Well-Known Member

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    It's too late unfortunately. If you wanted to start fresh you need to go through the formal process of end of tenancy and all that entails, and then start a new tenancy and all that entails.

    At the end of the day you can only do what you can do, which is have landlord insurance cover, and make sure whatever documentation you do have (hopefully an entry report with date and time stamped photos, and routine inspections along the way) to assist you with any dispute and position you for success if you do have to try and make a claim on your insurance.

    To be extra-precautious, if it were me, I'd also be corresponding early on with my insurer via email, seen to be proactive in raising the question "hey insurer, just bought this IP, I'm concerned about the quality of these docs, will they be ok if a claim needs to be made or what would you suggest" etc..
     
  3. Scott No Mates

    Scott No Mates Well-Known Member

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    @k-dos I'd be more concerned that the bond lodged 20 years ago has been moved to your name but be aware that it probably wouldn't equate to one week's rent today and there's nothing you can do about that.
     
  4. Ricki barkham

    Ricki barkham Well-Known Member

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    Doesn't the pm do a condition report 6mthly or so?
     
  5. Michael Mitchell

    Michael Mitchell Well-Known Member

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    Entry condition report different to routine inspection reports.
     
  6. Ricki barkham

    Ricki barkham Well-Known Member

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    And you can't use a condition report from when there weren't damages per say?
     
  7. Michael Mitchell

    Michael Mitchell Well-Known Member

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    Hi Ricki,

    An entry condition report is to record the condition of the property at the time the tenant rents it, and is used at the end of the tenancy to assist with helping the tenant return the property in the same condition they rented it less fair wear and tear. The condition of the property at hand over should be agreed upon by both parties otherwise it's kind of like do not pass go because the whole tenancy will be problematic none so much as at the end.

    A routine inspection report is made by Property Managers to show their Landlords of how the property is being maintained mid tenancy. However it also has another function in that Landlord Insurers want to see proof that regular inspections have been carried out and any breaches have been acted on to minimize and reduce any risk that the Insurer may be called upon to pay out against.

    When you work back from the worst-case scenarios such as heading to your states' respective tribunals to enforce rights under a contract (such as a tenancy lease) or dealing with loss adjusters and insurers for claims against tenants, it is absolute paramount that your property manager has done their job right. The most critical factors are documents and record keeping – it must be perfect otherwise you risk losing money.

    There have been numerous cases where I've taken over the management of a property and the previous manager has not done or has done a poor job with the entry report and/or no photos even taken, and I say straight up to the Owner if the tenant doesn't do right by you at the end with regards to handing the property back in a suitable condition you have little recourse unfortunately because of the lack of evidence to support your case.
     
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  8. Marg4000

    Marg4000 Well-Known Member

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    After the tenant has been there for 20 years, I reckon wear and tear would just about cover everything.
    Marg
     
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  9. Ricki barkham

    Ricki barkham Well-Known Member

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    Ok good point.
    Was.just a idea just but your correct need the right paperwork to begin with
     
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  10. Ricki barkham

    Ricki barkham Well-Known Member

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    Wear and tear excludes wholes in walls smashed window, doors that been kicked in, rats running around, dog poo on the bedroom carpet, 5 years of dirt on the walls, mould growth on lounge room tiles and lot more.
     
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  11. Michael Mitchell

    Michael Mitchell Well-Known Member

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    That sucks Ricki, I hope you get it sorted. A start would be a routine inspection followed by breaches of their tenancy agreement (re: maintain the property) and go from there (if they're trashing the place and/or not paying rent, they have to go). But, Before you officially "know" anything, get your landlord insurance in place!
     
  12. Ricki barkham

    Ricki barkham Well-Known Member

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    I tried to get the pm for 11 months to get them to fix it. All they said they can live like that of they want as long as it's fixed when they leave. I said it was a Intentional breach and they said that's my opinion lol. I threatened VCAT and they said you dont pay us enough to deal with it and we will sort it out when they vacate at end of there lease.
    3 pm later in 11 Months nothing changed.
    They vacated leacing damagesa, i rang pm amd she rang the tennent and pm called me back saying tennent had to pay a bond on her new place amd had no money to pay for damages, i said can she co.e back ans weed the garden anad and remove her rubbosh amd pm said she has no time as she's unpacking at the new place.
    I called insurance lace andinsurance came. And payed out 15k in damages
     
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  13. Scott No Mates

    Scott No Mates Well-Known Member

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    Find a more professional/experienced PM rather than the cheapest. You pay for your PM to attend tribunal, so that's not an argument.
     
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  14. Ricki barkham

    Ricki barkham Well-Known Member

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    I went through Ray White, hartcorts and Barry plant. All fairly big names in Vic.
    Non didn't want to do anything cos they new when i signed up with them wasn't going resign Tennents and do renovation for a few months before renting out again. So they weren't making much money
     
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  15. Ricki barkham

    Ricki barkham Well-Known Member

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    They just didn't want to take it to tribunal when I quoted 18 breaches
     
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  16. dabbler

    dabbler Well-Known Member

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    They been there 20 years and your planning for a tribunal hearing ???

    Assuming you daw the place, then you know where your at.....or you should......should not have taken them on if you did not want them....
     
  17. marmot

    marmot Well-Known Member

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    After 20 years they probably would have paid of the previous owners entire mortgage.
     
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  18. Angel

    Angel Well-Known Member

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    I wouldn't think there is anything relevant about the original entry report. Just get a new "entry report" as per the commencement of this new lease. The tenant, PM and new owner can all agree to start fresh.

    Does rent and bond require updating? That would be open to fresh negotiations.
     
  19. Ricki barkham

    Ricki barkham Well-Known Member

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    But that wouldn't cover any damages with in last 20 years tho
     
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  20. Scott No Mates

    Scott No Mates Well-Known Member

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    Both totally incorrect in NSW.
     
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