Nightmare tenant - Absconded after drug sale at property

Hello All,

Myself and my wife purchased a highset Queenslander in Slacks Creek (Logan area) for 260k in May 2020. We spent about 5-6k to get it rentable. We are using Elders real estate for property management.

The tenants moved in early June 2020 and they were a couple with a kid & a dog. By Dec'2020, the property manager advised that the female tenant has reported domestic violence and she would be moving out. She moved out with the kid & the dog in Feb'2021. The male tenant lived alone at the house.

This week, our property manager inspected the property as part of routine inspection. There was blood at the house & holes in the walls, the air con units were damaged. There is no sign of the male tenant, but his belongings are still there. The PM immediately called police and was informed that there was an incident at the property. A visitor has involved in a fight with the tenant and eventually the tenant has absconded. The neighbours have informed the PM that there was drug sales happening after the female tenant left and many strangers visited the property.

The PM has been asking me to sell the property because we don't have landlord insurance. She advised I might have to spend a lot of money to clean up the property, fix the holes, install new A/C units and test for meth. If the meth results are positive, she says that might cost additional 10k to do a meth cleanup. The PM also said the future tenants might be at risk since there were drug dealings happening before.

From the sounds of the PM, I felt like the agency doesn't want to do any work to fix the property and they are pressuring me to sell the property. After asking for alternative options, they said we can goto QCAT.

Is there any way to make the tenant accountable and make them pay apart from claiming the bond amount? If any of you guys have an experience, please share and I want to look at the options, I would consider selling the property as a last option.

Regards,
Antony

 

You can get a judgment for damages caused, but do they have any money to pay you? Any assets?

 

The male tenant isn't returning the calls to the Property Manager. I will have to talk to the PM to call the female tenant probably.

 

A seriously lazy PM right there...

 

Good luck with that one mate, been in that situation. Sometimes we can be unlucky enough to get a scumbag tenant and you may have to cut your losses.

 

You need a judgment from tribunal then engage a debt collector. They will cost a fair percentage of whatever they collect but they are relentless and will chase the tenants for years. They may get orders to garnish bank accounts, garnish salaries, or negotiate a repayment plan. I have used them before twice and I wouldn’t want to be on the receiving end of these guys.

Next time you should get insurance.

 

@ChrisDim , does your formidable debt collector handle cases in Melbourne ? I'd require such service soon ..

 

I sn pretty sure they are a National company but I don’t want to publicise their name here, maybe do a Google search. If you are stuck let me know. The key is to get a tribunal order first. They won’t do anything without it.

 

My tenant owes me thousands of dollars in unpaid rent plus damages to my property. The bond isn't sufficient to cover. I'm currently awaiting vcat hearing to evict them. What type of tribunal order is required for the debt collector ? I have to specially request for this order from the tribunal member. Am I correct ?

 

The VCAT will issue the order. You don’t need to request it. Order is the judgment so to speak. Once the matter has been heard, you will receive the Otder on an email. This is what happens in NSW so I assume it’s similar in other states. Your PM should explain the process.

 

Will do. Thanks Chris.

 

I've been through this a few times,but we have always had Landlord insurance ,which did help..
Moving forward as you have only owned the property a very short time apart from the bond that's about all you will receive..

First ''CAB'' off the rank would be talk to your accountant ..
Then talk to a local handyman ,the AC units as long as they have not sold the heat pumps to a scrap metal dealer can be repaired,the walls can be reset,painted, if this house was used as a cook house then that will be the most costly..

I know this is going to sound hard,and I don't intend to sound this way,but you have to put this down to experience and never ever not have landlord insurance again..
Also find a new property manager because any property management company one of the first few questions they would ask apart from the payments for rates water maintenance,is who are you insured with..

Good luck--this is the price you pay to be a property investors--and at the start it can be very stressful just a pity no one even your accountant or bank advised you to have landlord insurance,I would sack the whole team as they are all useless.. imho..never give up..

 

Why did you decide not to buy landlords insurance?

 

That's a cost you can do without

If you can't afford risk mitigation can you afford the risk?

 

I would also change PMs. That agent is useless and of no support. As soon as the DV incident occurred the rent issue should have been up for review and eviction considered. And as far as suggesting you sell is illogical and their self interest is very evident. If selling, the damage would need to be fixed anyway and if renting it needs to be fixed. So that should be focus. When done accept the loss and get LL insurance.

Junkies likely dont have jobs and (legal) income other that centrelink or drug sales and its futile to chase a bum for money.

 

I've worked with a national debt collection agency (all done online) who assisted to follow up on a debt without a tribunal order, although they gave up after a few weeks, a bit few calls and emails might convince some people to pay up.

When there's no jobs or money in the bank account, its impossible to garnish any funds. Years ago I garnished wages but then the tenant just left the job, then we went for the bank account but as soon as their centerlink money arrived they would be at the ATM taking it all out. I would focus on getting the house fixed up and re-rented asap rather than chasing the junkie.

 

One strategy might be to get the judgement and then wait, lay low, hoping they get themselves back on track and then enforce it. You would have 6 to 12 years I think.

 

Do you realise you will have to pay for all this upfront and there's probably a very good chance you'll never recover any money from the tenant above the bond?

 

A lot of the debt collectors want a $100-$500 upfront 'setup' fee plus a good chunk of the collected monies. The one I ended up going through didn't charge anything as far as I can recall.