Evicted Tenant - How to recover arrears?

Hi All,

Would like to get some advice on what possible actions I can take. After a year long of our tenant always being behind on rent, we’ve finally evicted her with a court order and $5k+ of arrears.

At this stage, I’m not sure what I can do to try recover some of my loss. When I applied for landlord insurance, at the time the tenant was 4 days in arrears which means the policy is not valid and they might not cover for 6 weeks rent.

26/9/2016 - Signed agreement sent to Property manager and requested her to take out building & landlord insurance.
5/10/2016 - Received what's app message from Property manager with a tenant application. Very poor screening process. Tenant has just been through court to get evicted from their last rental last property, I did not find this out till after the tenant has been signed on.
15/11/2016 - Received rental statement. Tenant already late in rent - no notice from PM advising of this until I emailed twice.
1/12/2016 - Received rental statement. Tenant already late in rent - no notice from PM advising of this until I emailed.
19/12/2016 - Same thing again as above..
16/1/2017 - Requested how much I was paying for insurance - No response.
18/1/2017 - Requested how much I was paying for insurance - No response.
18/1/2017 - Called PM, she said no insurance was taken out and to please do it myself.
I took out the insurance on 18/1/2017 with EBM. At this stage, tenant is 4 days in arrears.

I have since changed PM’s earlier this year. The tenant has been in constant arrears with fake promises and doesn’t follow any payment plans. She knew exactly what she was doing to prolong the eviction process and lived their till the very last day of the court order to evict.

Should I take her to court for the loss of rent? Is there a point to this if she has no money? If court is in my favour and puts her on a payment plan – is there anything to hold her to the plan?

Is there anything I can do to recover some funds from the old PM for their negligence? I got email proof requesting for insurance which they did not do and also their negligence in the screening process? They also advise me to take out insurance when the tenant is already in arrears - which means the policy was never valid in the first place.. Will fair trading help me in this case?

Any advice is appreciated.

Thanks

 

Does management agreement have a tick box for manager to take out insurance?

This is negligence. Landlords insurance should be taken out right at the beginning when first 2 weeks is obtained from tenant abs there are no arrears to void the policy. Any other time is risky. They should know this.

If this was my company I would be paying for everything because the fault is on the PM.

Also your other option is magistrates court against tenant and PM. I would not let this one go.

 

You can and should pursue the arrears (and I assume other costs as well- cleaning, damage, etc.) through the tribunal, you may not be compensated in full but with a good PM you're likely to get more than nothing.

You should ABSOLUTELY be making a complaint against the agency as well. You have a very clear cut case of negligence here with written evidence specifically tied to your complaint. The Office of Fair Trading may be able to assist you initially but you probably need to involve legal advice.

 

hahah, an agent taking financially responsible for a screw up!!

im still waiting for the tooth fairy for my tooth money

 

Separate question since the others have answered your main question - how come you didnt think of taking out insurance yourself when you first got the property?

 

That's why the legal advice is involved The idea is to make sure the agency doesn't have a choice in the matter.

 

Thanks for the advice so far.

@Xenia There was no box to tick for insurance on the management agreement, but when I emailed the agreement back - I did specifically requested for the insurance.

@Tom Rivera Thanks mate, I'll see if I can get some legal advice.

@D.T. Not too sure why I didn't. I guess, the PM said it's something they can do for me and I just thought it was done. At no stage did I think the insurance wasn't done - until I got no reply for them asking how much it costed.

 

The agency should be taking out insurance for you. We get a specific no instead of a specific yes for insurance. I still think agency is responsible and this is negligence. Damn property managers!!!

 

Suggestions for non-lawyer options: Enforcement of the debt against the tenant would be the issue - do you want to spend money chasing a judgement when the tenant probably regularly defaults on everything from phone contracts through to car loans? One thing I've learned over the years is that there's very little value in trying to chase someone legally if they're already borderline bankrupt.

With regards to the agency you could speak to the principal/management and complain that the omission of insurance has spoilt your otherwise good experience with them and that you would continue to do business with them if you can both agree on a figure for compensation for their mistake (assuming we're talking about a couple of grand here anyway). Most sensible business-people will see that it will save them a lot of time and preserve their reputation if they just give you what you're asking for with an agreement that you'll never mention it again -

 

Finding it difficult to get some legal advice and what steps to take..

@Ben Chifley I've already changed PM awhile ago. There was also no good experience with them to be honest. 3-4 months to update my bank account details with numerous follow ups. 3-4 weeks to request the council rates get paid and deducted from my rent..

 

I'm not convinced a PM has a duty of care to insure YOUR property risks and as insurance is a financial product requiring a license to sell it they arent qualified to advise on it in any event. How can a PM apply for insurance ? Its like blaming the Hyundai dealer when you crash your car and fail to take out car insurance. They will say they cant apply for comprehensive cover as only a owner can do that. And they arent a broker. If the PM acts as an agent for a third party insurer they may merely just be acting as a agent for the sale and nothing more.

If they offered insurance as an agent and you accepted this and then they failed to act to obtain the cover you need legal advice from a solicitor. You would need to prove you didnt contribute to that negligence. Insurance applications dont give cover - Only a policy gives cover and you didnt see one. When did you sign an application ? I dont think you did until it came to EBM months later. Where the premiums paid ? Did they issue you a policy ? etc...Your follow up may be critical to that argument and the OP seems to indicate you identified the concern before the risk was uninsurable as they seemed to have been in arrears from day dot. May be worthy of a Fair Trading claim against the licensee if you are out of pocket? Worth raising their negligence with the licensee now.

 

Yep. You'll find this is the approach of all PMs. Educate on the downfall of not having insurance, highly recommend its taken out, but ultimately insured's responsible to insure.