NSW Lease renewal signed without landlord knowing?

Hi I was wondering if anyone can help. So my tenant signed an one year lease in 2021 which is due for renewal in 5 weeks. However, when I called the PM today to discuss how much rent to put up(as it's going bonkers atm) and he then advised me that they had offered the tenant a further 12 months term a month ago which my tenant had agreed. The rent offered in the renewal is way lower than the market price as of now, probably more than 150 a week which means if I bite the bullet, it will set me back for nearly 10k a year.

I was thinking, WTF? I did not know anything about this. How is that right? The worst thing is this PM is a friend and a client of mine.

Anyways, I do not know what my options are and if anyone can help. Obviously, re negotiating with the tenant would be the best way. What happens if the tenant says no? Can I terminate the contract at all? I am in Sydney. Cheers. Jon

 

Very few if any, the new lease would be valid if it's been signed by the tenant. Express your dissatisfaction to the agent, although they may not have exceeded their authority, their duties are listed in the management agreement and may include having to renew leases at market (possibly without reference to you) but good practice would require that they seek instructions prior to starting the renewal process.

If they've exceeded their authority you may seek to get compensation for the shortfall or letting fee or terminate their services.

 

How much was the rental increase in percentage?

 

Thanks. I had a look at the management agreement which says "



The thing is when we had a conversation back in Apr 22, I clearly told him that we would be chatting about rental increase in May. Becasue at the time we were anticipating the interest rate rise and wanted to offset that.

Does this mean the agent has breached the agreement by not letting me know?

 

I have no idea what the new figure is in the lease renewal and wanted to find out too..Should know today..

 

Have you looked at your monthly statement?

 

Yep, but it's still old rent, new rent won't kick in until after the current lease runs out mid Jul. What PM got tenant signed was a lease renewal from Mid Jul.

 

That's only $7,800 where's the other$2,200?

 

More than 150 is just a rough estimate. Will confirm after I find out about the actual rent.

It's currently leasing at 700 a week. I suspect PM only put up 30 bucks a week to 730.

The market rate atm is 900..

Let's just say the shortfall is 7,800. Still painful due to a failed job by PM. No?

 

Did the PM send you a copy of the new lease?

Sure, but sympathy won't help you. Talk to the PM, get it in writing that you have to confirm new leases from now on, ask for compensation if that's already in your agreement and they broke it, and don't use friends as your PM.

 

Lesson learned. No friends for business.

 

Maybe the tenant is a friend of his too? Sounds weird if you say you discussed it earlier. And why jump in to renew so early? Sounds sneaky to me. I'd be speaking to the head of the company. They should be compensating you if all details given are correct.

 

Dude is the head of a company and is my client...This sucks.

 

So what is he saying when you mention the signing without consulting you? And the low price?

 

He said he would check today and call me. I think he knew he stuffed up and is trying to come up with a solution.

 

This was my first thought.
The few times these scenarios happened for me there was always a connection between someone in the office and the tenant.
Of course it was soon after ex PM.

I'd say it's someone down the line doing a friend a favour.
What would he do as a client if you were ripping him off a few Ks?
If he's a happy client it could be good.

I think this is wrong.
I have plenty friends in business. It comes down to definition of "friends".

 

Market rate for a new tenancy might be 900, current tenant might only be able to afford 730 or whatever, the question is, what you rather, move current tenant on, sit vacant for weeks whilst finding new tenant, pay let fee, wear & tear on property from furniture moving in/out, uncertainty that new tenants might be **** where's current tenants might be good. So many factors, I wouldn't be surprised if your PM calculated all these into the equation when making the decision, something the lay person generally doesn't consider because they don't have the experience to know 'what a good deal is', considering...

 

I'd be pretty upset- and I think they have breached their duty to you. That's an enormous amount of lost income.

 

Overcharge him for your services - retaliatory pricing

 

While someone might renew at a lower rate than a new lease (avoids vacancies etc) that should be a discussion with the owner. Especially if the gap is that big.