new lease same tenant

Wondering if I can clarify if this is standard procedure for an IP in Victoria. My tenant is happy to sign another year's lease with a $5 increase per week. He has been given 60 days notice so this won't take effect for another 2 months into the new lease. I thought the rent increase would be immediate effect given the previous one has expired. If the 60 day notice is standard should my property manager have organised notice and paperwork earlier so the increase can take effect immediately upon the previous one ending. Please enlighten me.

 

Hi @pinewood,

No, you still have to give 60 days notice of rental increase even though the formal lease has ended. Your tenant is now on what is known as a "periodical tenancy" which means they are bound by the conditions of the lease that expired, plus any rent hikes. The only difference is they can give 28 days notice of intent to vacate while on a periodical tenancy. If however they sign a new fixed term lease, they'll be bound by the terms of that lease, including notice periods etc.

 

Absolutely! This is the difference between proactive and reactive property management, thinking ahead and in the investor's best interests to maximise their cash flow. It's been said time and time again but generally saving a few extra dollars per week in management fees can cost you more elsewhere and this is a perfect example of that. For my portfolio, I want a PM who is proactive and thinks like an investor which is why it's so important to find the right product, not the cheapest price.

Give them a "written warning" and if anything happens again, I would be finding a new PM.

- Andrew

 

Just read the original post properly, yes, if your PM sent the rent hike notice at least 60 days before the end of the lease, the new rent would immediately have applied at the end of the original lease fixed term.

 

$42 lost. What's the big deal?

 

Thanks @JacM for your comment. It is a fixed term lease for another year.

 

Thanks Andrew, this what I suspected. My PM is not proactive, I have to be constantly on top of things myself and totally agree with your advice.

 

That's beside the point, $42 is a lot to some, it's the inefficiency I'm trying to ascertain. Would you be ok with this if the alternative was a better outcome?

 

If $42 is a lot perhaps you should stop investing and stick it in a pokie machine at the local RSL.

 

Thanks for confirming.

 

A PM should have a standard process that you don't need to chase. For instance, a standard process to alert them 90 days before the end of a lease, at which time they converse with the tenant to determine the tenant's interest in signing a new lease. At that time they should also be conversing with the landlord about whether the landlord wishes to offer a new lease, and if so, at same price or an increased price.

 

How is this helpful? Why don't you comment with some sense for a change, it won't make any difference to you but it would to the forum.

 

That's exactly what I had hoped would have happened. Anyway, I'm learning, thanks @JacM

 

Spot on. We have a procedure that triggers events at -90/-60/-30 days to lease expiry for this exact reason. PM is not about guess work and sporadic events, it's about having policies and procedures in place which should be implemented on a systemic level to ensure all PMs in an agency are on the same page and following due process.

Unfortunately, one of the downfalls of PM in general is that the service people receive (both landlords and tenants) is largely dependent on the individual. Whilst this is an important component, more focus should be on procedures such as above so investors can be confident they will receive the same service at an agency no matter what the experience or personality of the PM.

- Andrew

 

42 dollars is not a lot until you multiple this cost of the corse of there management. Personally I don't think the small amount of money is the issue here but more of a case if they are costing you money when you can see it, then what is it costing where you can't????

I would firstly question why they are now on a periodic lease (correct me if I am mistaken) as the cost of the tenant suddenly up and leaving at an inconvenient time would cost you a lot more than 42 dollars as MMP mentions

 

Good points! Thanks Ricky. The tenant is renewing for another fixed term.

 

I did the same for IP in nsw. you would hope they'll b proactive. my portfolio is not that large but i keep myself a reminder and tell them to get the ball rolling. my PM in nsw was relaxed but i kept pushing and just resigned the lease with same tenant....