Lease is coming to an end... what next? (Qld)

Hi everyone

My tenant's 12 month lease will expire in about two weeks. Just seeking some advice as to what to do as I'm a newbie.

We have offered the tenant a new lease however the tenant has not signed this yet. I've been advised by the property manager that the tenant has indicated they will probably sign.

The tenant initially wanted to go periodic or have the lease around February. I counter-offered a shorter lease to January.

What happens if the tenant continues to say that they will sign but still don't sign and let the lease expire?

From researching the internet my understanding is that the lease will go periodic. As a periodic lease may not be favourable to me (my tenant has previously been very slow at making payments, but has been good more recently), I'm just a bit concerned and don't know what to do.

My property manager began the process of offering a new lease about a month ago. I've followed up quite a few times, but still waiting for the tenant to sign the lease.

Or perhaps I'm overthinking this.

Thanks for reading this in advance.

 

I wouldn't worry about it now as they have said they will sign. I have two tenants who usually signs on the last week of tenure or a week after without issues.

 

Periodic lease = say good bye to loss of rent cover in your landlords insurance policy basically, that's pretty much the main difference from a risk minimisation stand point. They can of course vacate with only 2 weeks notice as well. You may like to ask your PM doesn't leave renewals to the last minute and instead starts asking the question 3-4 months out, especially if the Tenants are notoriously slow in 'making decisions', this way they have ample time.

 

The fact they stated they wanted to go periodic and are now drawing out the process is not a good sign. Issue them a notice to leave but advise it will be withdrawn if signed by xx date, otherwise you will start advertising.

The problem is you are now in a position that it will go periodic even if you issue the notice to leave now as you have to give 2 month's notice. Your agent should be starting this process a lot further out as @Michael Mitchell said.

- Luke

 

Hi Wylie, thanks for your response. For some reason I thought this may not be legal in Queensland?

I'm a newbie but did a few google searches before I posted as I was a bit frustrated.

 

Definitely legal

 

Thanks for your response. Can I just clarify - would I still be able to receive some rent cover through my landlords insurance policy if the lease reverts to a periodic lease (for example, tenant keeps delaying)?

Eg if they don't pay rent for 4 weeks, am I still able to claim the rent of 4 weeks through the landlord insurance?

Regarding my property manager, I was a bit disappointed as I've followed up quite a few times. Each time the action they've taken is to try to contact the tenant and have advised me that they'll let me know when the tenant has signed or if they've heard back. Incremental progress over the last few weeks.

Thanks.

 

Ask them ask them to serve a notice to vacate if they won’t sign the lease and readvertise. And get a new PM if you’re not happy.

 

Thanks Luke - appreciate your comments! I'm quite concerned too.

 

Try not to be, this is part and parcel of being an investor. Way worse things happen!

 

Not all insurers will wipe rent cover on landlords insurance with a periodic lease (fewer and fewer recently).
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Also, although it's common practice, we're really not supposed to send two months notice to leave to tenants who haven't re-signed leases in time.... it's just not policed the same way as it is in VIC and NSW.
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@Sheldrick, I wouldn't be stressing too much at this stage- you'll get grey hairs early if you stress about every potential problem. Start stressing if it goes periodic and the tenant gives notice to leave for December!

The agent should have started the lease renewal process sooner, but it still seems like every indication is that they'll re-sign. If they have a feeling the tenants are playing games though, you might want to send the 2 months notice 'just in case'.

 

Noticed the same @Tom Rivera . I believe TS has gone to a blanket set amount for loss of rent regardless of fixed or periodic.

Interesting. On what basis? (Genuine question to hear your views on the topic - not trying to pick a fight

- Luke

 

None of the main LL insurers do. The bank or supermarket owned ones might but you shouldny be with them anyway.

There's lots of reasons you shouldnt be using periodic leases. Insurance isnt one of them.

 

As far as I'm aware it's exactly the same as NSW- you're not supposed to effectively blackmail a tenant into signing a fixed term tenancy by threatening to make them leave if they dont. Even though it says 'without grounds', it's pretty obvious when it's sent with a lease and an email that says "sign or leave" what the grounds are. Stupidly, Landlords don't technically have the right to enforce that tenants stay on fixed term leases.

 

It’s not blackmail. There’s a choice - stay or leave. Not “I have video of you doing x criminal thing so sign the lease.”

Also tenants can come back and say “I’d like a lease for x months/x years”, doesn’t mean the landlord has to say yes but people want security to know where they’re going to live, landlords should get the same security knowing they’ll have money come in.

 

Interesting one from a moral perspective... Lessor's retain the right to only want fixed term tenancies in place and there a valid reasons to substantiate this, as such issuing a Notice to Leave or enter into a new fixed term agreement option to the tenant is fine in my book.

 

I believe Landlords should have the right to expect tenants to remain on a fixed term tenancy, and only 1% of my tenants are on periodic tenancies- I'm just stating the legal standpoint.

 

Is it though? What part of the Act are you basing that interpretation on? Which cases support that interpretation?

Whilst I may disagree, I can appreciate you may take a different position or interpretation. But that is all it is on both sides, an interpretation of the rules and we apply them accordingly. I can't find anything in the Act or regulations that preclude such an action, and I'm not aware of any cases where such an interpretation has been applied (that doesn't mean they don't exist of course, and more than happy to have them pointed out to me).

I think we have to be very careful though stating something as "the legal standpoint" without supporting evidence that confirms this to be the case.

- Luke