Just wanted to put this out there, as I wasn't aware of this "gotcha" We purchased an investment property (Victoria) 2 years ago, and decided to keep to current residents (child of the vendor) as tenants. Fast forward 18 months, and they are falling behind on their rent, so we decide to evict. With two months of rent owing we were hoping to get something back from our bond. No such luck. Apparently when you decide to keep the current tenant, there is no initial condition report, and no need for them to pay Bond. Well - you live and learn. Cheers
Normally there would be - we quite often take over managements from other agencies, or for new purchasers who have sitting tenant - and we check they have ingoing report and bond in place. If they don't , we get them sorted. Oh well, you know for next time i guess
Unless there was a formal lease in place (should have been on the sales contract), it would appear that you allowed the vendor’s child to remain in the property, thus starting a tenancy. It is up to you, or your PM, to do an entry condition report, and make sure the bond is paid, or, if already lodged, transferred into your name. Live and learn! Marg
I wasn't mentioned during the tenancy. And afterwards we were told it had been requested a few times. All good - we are very happy with our PM.
Bond and a proper lease should have been organised on day 1 by the PM. I wouldnt be happy with them not getting it sorted
This usually forms part of the sale process / tenant selection. The terms and conditions - usually you would advise that the property is sold with vacant possession - if they vendors were to sign a lease and form a tenancy, then it is a requirement that the bond and lease are all in order prior to settlement - otherwise the vendor risks settlement delays as they are not providing vacant possession / and there's no tenancy agreement. Once the tenancy agreement and bond are sorted (before settlement) then the agent needs to do what condition report they can with the people living there - it's hard, and it won't pick up most things as the house is full already, but it helps cover owners for the big things such as 'that hole wasn't there when I purchased the house...' You are not supposed to have a bond without a condition report in Vic, the two go hand in hand. Requesting a bond after settlement... why would they pay as there is nothing enforcing this and technically it can't be requested when there's no entry report anyway. So it looks like someone dropped the ball (Being a PM, usually I'd point the finger at the sales department, but the PM should have made you aware at least unless you didn't speak to them until after settlement? And potentially signed up with the sales agent for the management of the property?) It's a good thing to point out though as I don't know many investors that would turn down a ready made tenant, no vacancy or leasing costs on their new purchase.
Eh? No... if when your PM takes over the management they discover those things are not in the file, they must do them immediately.
Yeah.. someone has dropped the ball on this one. You cannot accept a bond in Victoria without an ingoing condition report, but it wouldn't be the first time I've done a condition report around a vendors belongings. The risk is that there's damages you cannot claim for (furniture in the way etc) but does at least mean you have something to get owed rent from.
PS. Where is property located? If in Victoria you probably aren't going to get anything from insurance (if you have any) as I think all require a bond on the property, however you can still evict them through VCAT and get an order for the amount owed, get said order certified and go through debt collection process.
Most insurers will with take the bond as an excess, or want to see that you've used it all up first on other items before paying any claims. So no bond, no insurance.
