New tenant behind on payment and not picking up phone

Hi All,

Thought I get some advice here.

Over the weekend I got a call from my PM who advised my tenant has not paid the rent that was due on the 13th of this month.

PM advised they have sent a text message as per the process and have tried calling them but the phone is switched off. PM to a 'formal letter and eviction process will begin within 14 days'. If still no response, a letter to vacate will be issued.

This is interesting as this is my first investment property and the first ever tenant. Wow!

Luckily I did sign up for EBM Rent Cover Ultra.

I called EBM to understand how does the rent cover works.

They advised I can submit a claim once the tenant has been evicted from the property. I cannot lodge a claim as currently, I don't have a definitive end date to this issue.

Is this how all insurers deal with claims? Have you had any other experience? or any other advice for me?

Thanks

 

Maybe ring the insurance again and ask for a claim no-that way you have a date to work from...

 

You won't be paid on a claim until you have suffered an actual loss. There is nothing at the moment to say that the tenant won't get up to date and pay all rent arrears.

Until the tenant leaves either voluntarily or is evicted, you won't know how much rent you have lost. Also, the bond may cover at least some of the unpaid rent.

No insurance will make a payment just because a tenant gets behind in the rent.
Marg

 

Gee, that's a bad start, Yash. Good that you seem to have a property manager who is on the ball. And great that you have insurance. As Marg said, you just have to wait to see how it all pans out.

 

Yes, i am hoping they just end up paying.

I wish i had clarified this while signing up with EBM. i am assuming all insurance companies are the same.

 

I actually got the insurance quote and had 30 days to pay for it and only ended up paying on the 28th day as I totally forgot about it. Glad that I did.

Its interesting as the reference check for this family was amazing and salary slips were good. Cant believe that they would just ignore all the sms and phone calls.

 

Hiya

Yes, let the PM go through the whole process first. EBM is the best insurer to work with, their claims are simple and quick.

EBM will pay rent for the time the current tenants didnt pay rent, the time spent doing cleanup and repairs, and the time spent finding a new tenant, locksmith cost, tribunal cost, etc. Bond will cover things like re-letting fee, cleaning, etc.

I wrote a bit about the process in this thread here: Property trashed "Today Tonight" style

Yep. Can do all the checks in the world but no one can guarantee a perfect tenant. You never know when a tenant might lose their job or relationship etc, and things spiral out of control from there.

 

It's probably grasping at straws, but there is always the possibility the family are overseas or something and overlooked the rent.

A few years ago I heard of someone who had a tenant who thought that seeing as how he was away on holiday and not using the property he shouldn't have to pay rent.

 

As others have said there the insurance companies will not pay until they know how much was lost.

The tenant might come back and pay all back up and as such no insurance was needed or maybe your PM didn't follow the correct eviction process which caused further delays which is not the insurance companies fault so they wont cover the whole amount. Without all the information (state laws/PM notifications) this is probably the hardest thing people don't understand but it would appear the PM are doing the correct thing.

Once there is an end date and a review of what happened along with the lease + insurance coverage then the claim can be processed otherwise to many variables and the tenant might pay tomorrow which voids the whole process.

This is one of the joys of being a LL and you need to make sure you have a buffer as the bank will still expect their money as their contract/mortgage is with you and not with the tenant.

 

Dear Yash,
what steps has the Property Manager taken, to retrieve arrears?
Have they checked they are at work?
Next of kin?
Didn't they complete all the relevant paperwork before they move in? Wasn't it verified by the agent?
Document every communication attempt!
Your insurers won't want to pay a ' Razoo' unless you( or you agent) have taken steps to mitigate your loss.
I hope this helps!

 

Good tenants can turn bad and bad tenants can go feral. They have only just got behind with their rent and hopefully it will be rectified quickly. Could just be a short term cashflow problem or someone may have lost their job. Not answering the phone is common delaying action.
Early days but follow up with pm to make sure paperwork is submitted promptly.

 

Just ensure that all breach/eviction notice are send on time according to your particular legislation, this will make the insurance claim process much more simplified.

 

Regardless of the insured product, in this case rent etc, no insurance company can be expected to give you money for an unconfirmed and unquantified loss that may or may not actually exist