Consumer affairs have been auditing properties in Vic

Discussion in 'Property Market Economics' started by L3ha7, 23rd Nov, 2017.

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  1. L3ha7

    L3ha7 Well-Known Member

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    This is the first time I came across where consumer affair is auditing properties randomly.

    PM is managing my IP in Vic/Melb and as per the rules we informed the tenants on rent increase (formal notice) and provided 60 days before the increase can take effect.

    Lease has expired in Sep 2017 and we have also send the paperwork for signing a lease but tenant hasn't returned any phone call or mention anything in this regards.

    Yesterday my PM told me that the rent increase will not go ahead as per the letter they have received from consumer affair (CA)and according to CA rent is as per the market but I disagree because in the area some 3beders are getting more than our 4 beders.

    The last rental increase was sometimes in 0ct/nov 2016 (from my memory).

    Do you think tenant might have gone to CA? Or do CA randomly audit IP's?

    I am.asking above question because in the past when we have gave the option to vacate the property-tenant threaten to go to Vcat etc. and he will use his health condition (back problem waiting for compensastion) to remain in the property. Out PM suggested to let the lease roll over for another 6 months and this action will be looked at as compassionate - so we did and now the CA issue.

    Can anyone provide their feedback/opinions?
     
  2. Zoolander

    Zoolander Well-Known Member

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    I used to have an escort as a tenant, who also had back problems laying on her back (wut?).
    Health problems in an ideal world shouldn't call into question end of lease terminations, given the ample notice. However, my experience with tribunals is that the whole process can give tenants an extra 6 months simply from delay tactics (deferring mediation dates etc). Giving 6 months rollover could be an option, and give your tenant plenty of time to find a new place. No idea about CA though - sounds like the tenant brought them onboard instead of a random checkin.
     
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  3. Handyandy

    Handyandy Well-Known Member

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    Sounds to me like the tenant has taken the rent increase to the tribunal and succeeded in getting an adjudication against the increase.

    Out of interest what was the rent and what was the increase? Also what area is the property located in?

    What was the PM doing whilst the tenant was objecting to the increase?

    Just noticed that the property is in Vic but I looked up the NSW rules. No doubt you can find similar rules that apply in Vic.

    Rent_increases


    Challenging an increase

    If you think a rent increase is excessive you can apply to the NSW Civil and Administrative Tribunal. You must apply within 30 days of receiving the rent increase notice.
    The Tribunal will consider:

    • rents for similar premises in the same area or a similar area (ie. the ‘market rent’)
    • the landlord’s costs associated with the tenancy agreement
    • the value and nature of fittings, appliances and other goods, services and facilities provided with the premises
    • the state of repair of the property
    • the accommodation and amenities of the premises
    • any work you have done to the premises
    • when the last increase occurred
    • any other relevant matter, except your income or whether you can afford the increase.

      Rent_increases
     
  4. DaveM

    DaveM Well-Known Member

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    How does the rental increase per week compare against 3-4 weeks vacancy + letting fee? Sufficient to recoup in first 12 months?
     
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  5. L3ha7

    L3ha7 Well-Known Member

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    We haven't increased rent in approx 12 months and we have given a compassionate 6 months lease rollover due to tenants back issue eventhough we had advised him to vacate the property (8 months ago-timeline is a guess).

    The issue I face with PM is slow processing, I live in NSW and somehow I have noticed the way things get done in Vic is on slow pace (i say that with reapect). In NSW , I am used to working like an engine room hence I have to chase up everything and yesterday when I requested my PM about making few changes and sent her few quotes of split system and I decided to touch base by mentioning about upcoming rent increase and then she told me about all this and they have received letter from CA ( which they have received week ago)

    We did follow all the rules to put the rent increase.

    Property is in WV and in Vic rent is on prorata base so from $1564pm to $1630pm
     
    Last edited: 23rd Nov, 2017
  6. L3ha7

    L3ha7 Well-Known Member

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    I do get your point @DaveM and because of this we have been going along because , Interstate property and I am dependibg ipon my PM who is .....nice.
     
  7. qak

    qak Well-Known Member

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    So were you aware of the tribunal proceedings? Were you represented there?
     
  8. qak

    qak Well-Known Member

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    And having said that, if market rents have fallen in the area, we wouldn't put up the rent based on the time since the last increase or lease - it would just stay at the same rate.

    We do prefer to get tenants onto a new lease for certainty, and because we hate having vacancies over the Xmas/NY period which will end up being 6 weeks.
     
  9. L3ha7

    L3ha7 Well-Known Member

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    There were no tribunal proceedings.
     
  10. L3ha7

    L3ha7 Well-Known Member

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    Good point @qak and I have asked my PM the pros cons of having a lease in place and vice versa and she has mentioned this is the only thing if lease is not signed that tenant can give 28 days notice and vacate the property.

    Our current tenant is waiting for aompensastion so she highly doubt he will leave during this time and we decided to let it be month to month for the time being.
     
  11. S.T

    S.T Well-Known Member

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    Interesting, the tenant has probably requested a rent review from Consumer Affairs, after they receive the review they have 30 days to apply to VCAT to challenge the increase. So you should of got notice of VCAT. Perhaps the tenant has received the review in their favor and just sent it on to the PM without going to VCAT?

    More info here
    Rent increases
     
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  12. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    The time of year can be a bit of an issue for increasing rents.

    Late November through December is a terrible time to try to lease a property in many locations. It seems a lot of people don't like to move in the lead up to Christmas. On the other hand late January through February is a great time to ask for a premium rent. This tends to be when demand is highest. This has been my general experience with properties in Melbourne and Brisbane.

    It means that you're asking for a rent increase at a bad time of the year, when other landlords are discounting their rents. It doesn't matter that the increase would become effective in a premium time of year. If you asked for the increase in January the market would likely look a lot different.
     
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  13. Lil Skater

    Lil Skater Well-Known Member

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    The tenant is the one that has requested it, $15pw seems a reasonable increase but if there's not a lot to compare to (as Pete said) and the tenant found a "nice" CA member this may be why it's been reduced.

    Challenging rental increases don't go to VCAT straight away, so there's normally no notification until the notice is received from CAV - in saying that though the PM should've notified you immediately.
     
    Last edited: 23rd Nov, 2017
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  14. Handyandy

    Handyandy Well-Known Member

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    Seems that you have been given the letter from CA and they should have tried to negotiate with your PM. Also looks like it's not enforceable unless it is taken to VCAT.

    I would be reassessing your ongoing relationship with the PM as I don't think they are acting in your best interest.

    I would also move the tenant on as soon as possible as this is just the start of a very bad habit.

    "If the rent assessment (CA) finds the rent increase is excessive, a tenant or resident can use the assessment report if they wish to seek a ruling on their rent at the Victorian Civil and Administrative Tribunal (VCAT). The tenant or resident has 30 days from receiving the rent assessment report to apply to VCAT for a hearing. VCAT may set a maximum rent, which usually stays in force for:

    • 12 months for tenancies"
    Rent increases
     
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  15. L3ha7

    L3ha7 Well-Known Member

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    Agreed, we have let it slide through as a compassionate/good will but I do not like bulling.

    I have asked the PM to put a proposal to put a new split air con and get the tenant sign the rental increase ( not lease atm).

    Any good pm's any one can mention in Melb.?
     
  16. Handyandy

    Handyandy Well-Known Member

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    "I am.asking above question because in the past when we have gave the option to vacate the property-tenant threaten to go to Vcat etc. and he will use his health condition (back problem waiting for compensastion) to remain in the property. Out PM suggested to let the lease roll over for another 6 months and this action will be looked at as compassionate - so we did and now the CA issue"

    You are being used and abused. Why would you contemplate giving the tenant further amenities without getting adequate compensation. I am putting in AC's with a $30 increase pays for the unit in the 1st year or just over. As far as threatening to go to Vcat it's not that painful but I suspect the PM is working against you on this front.

    Maybe you should speak to Lil Skater who is a PM in Melb.
     
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  17. L3ha7

    L3ha7 Well-Known Member

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  18. L3ha7

    L3ha7 Well-Known Member

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    @Handyandy - one of the main problem I am facing is not having proactive PM, now ai am not a SME in this domain but I can clearly see when I am getting used when not.

    I did make it very clear to my pm few months ago that -Yes, I am happy to help someone for the time being if it is genuine concern but I don't want to get bullied by tenant and I want to run the show not tenant. I am not in a stage where I invest money to do charity.

    As an example: few things needed some attention and my PM got me quote for some high amount (1200 I thunk, can't rem) and I was like it can't be that much so I arranged some quote and get everything done in $690. But Tenant started to tell that tradie guy that these new owner wants to put rent up (10$ rent increase motice sent in aug to take place in nov 2016)- I am going to take him to Vcat all that zazz...I informed my PM that we should run the show not let tenant dictate the terms because we are the owner but still we listen to PM that Vcat tend to take tenant side and he has back issues not working if we let it roll don't ask him to vacate it will be +1 for us so no problem.

    This time around asked my PM get the tenant to sign a new lease for 6 months with rent increase and stuck in this kafafal.

    We have ducted geating no air con or evap so my PM arranged quotes then I arranged independently guess what the , one quote I found was approx 1300$ cheaper than the one she arranged but I don't think I am going with that but the one we selected is nearly $1100 cheaper.

    @Peter_Tersteeg : we will be considering your tip, thanks for that.
     
  19. sash

    sash Well-Known Member

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    Get rid of this PM.....immediately...they are not doing their job!

    As for the rent increase....a $15 increase is about 4%.....that is perfectly reasonable...in the current market...so long as you can prove that there are other properties with similar bedrooms and bathrooms around the similar bedrooms.

    I think the real issue is the PM.

    For example...I have just put up my rent on one property from 395pw to 410pw.....the tenant has still not signed the lease...they have been given the 60 day notice. So the rent goes up..automatically in Jan. 2018.

     
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  20. L3ha7

    L3ha7 Well-Known Member

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    Thanks @sash

    My property is around Werribee/WV area any recommendation on PM and what is their fee structure.

    Initially, I was getting iffered 3 months free oroperty management and the 4.5% or 5% incl gst after that but I choose this PM because of the experience (as per rate my agent or choose REagent website - can't remember) and paying higher rate than above and still I am calling around, chasing things, getting quotes.
     

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