PM no longer listing all tenants on lease!?!

Long time reader, first time thread creator. My apologies for the long post.

I have a property in the ACT currently occupied by 5 friends, all on the lease. I rang this morning regarding a different matter*, and it came up in conversation that this PM is no longer signing leases with groups - in this case, when one the tenant leaves, the group will all have to leave or have just one person on the lease (with the others staying, just not on the lease) ...

This property is best suited to groups - it has previously been rented for 5 years to a group - two people were there the whole time, while the other tenants changed every so often. The current group have been there for nearly 12 months.

I was then told that this will 'protect' me, but no further information provided. I am probably missing something, but I am concerned that at the very least this would impact LL insurance? And make it much harder to lease? (My thought being that why would one person choose to be responsible for the rent of 4 other parties?).

Any other potential issues I should be following up? (I suspect it's time to just change agencies!)

Thank you


Susan

*the other issue - the contractor doing insurance work on the property rang me last night because one tenant is not allowing a glazier access to replace a damaged window, the tenant has apparently installed a key lock on his door. Turns out agent knew about lock, because she had trouble/couldn't inspect that room (she couldn't remember which) - no mention of it on inspection report though!

 

susan, sounds like the real PM is pawning it off to a "second landlord" to sublease your property.
while they do deliver value because they are doing all the work the PM is meant to do however you just have to put your trust the second landlord knows what they are doing and do take photos / scans of IDs. If it's student accommodation each tenant can turnover every 3 months so the agent is probably sick of changing the lease, so for a 12 month period if there is 5 people... you can expect up to 20 changes to the lease?

but you can also look at it on the bright side, the PM must trust the head tenant (second landlord) enough to allow this to occur. The second landlord may live at the place and their rent is probably fully covered by the others. While the second landlord does deliver value but at the same time there is increased risk to you and your property, but this may be the only way as maybe the area it is in is just meant for groups. (The pm just doesn't have time to micro manage all of it and collect rent from each person.)

 

Adding lock to bedroom will always increase value for your house so that's a good thing. Just ask the agent or second landlord to make a copy of the key for you, shouldn't cost more than $5 at bunnings.

As soon as you have more than 2 groups in the house you pretty much need individual locks... You can't tell who will steal from who, it can get as bad as when one person goes for a shower someone else sneaks into their room and steal their rent money.

 

I would also be very carefully checking your insurance policy and product disclosure statements/documents. It should spell it out how and to what degree you are covered if unrelated parties occupy but aren't all on lease. Rent default would be the least of my concerns. Be careful you aren't tarnishing your building policy (as a rental investment property) for malicious damage or worse total loss if it burns to the ground.

@Susan, sorry if I missed it in your opening post, but do you actually still have an original head tenant on lease?

New PM might be on the cards for you too.

 

Thank you so much for your time & replies

@Player
Insurance is my biggest concern. Originally 4 tenants on lease, then one more added. Currently all five on the lease, so should be no problems with insurance until one wants to leave...

@fullylucky
Current tenants inspected and signed up as a group. PM was aware of history (and the very high likelihood of a group leasing) before I signed with them. Previous group turn-over was less than 1 per year (uni students, mostly stayed until degree finished ). I agree that agent is looking at 'pawning off' the management, can't see a benefit to me though ...
I would probably have agreed to a lock - so long as the PM was provided with a copy (didn't happen, and not followed up by the PM when PM discovered the lock).

@wylie
Hadn't thought of that particular situation , hence the post .

Have spoken to one potential new PM, left a message with another (I would rather change PM before one tenant decides to leave and PM tells others to leave!)

 

Hello Susan,
All your tenants should be 'jointly and severally liable'
Check with a legal type as to the correct wording , and spelling.
I am pretty sure this means ' get them all on the lease'!
I hope this helps,
cheers

 

Am I the only person that doesn't see much of a problem here? Legally and practically there can be advantages to not having everyone living there on a lease. I don't really get the whole "everyone must be on the lease" attitude that is often thrown around.

Off the top of my head, there's certainly some LL insurance policies where this isn't an issue, if that's the main concern.

So apart from the PM's opinion on this issue, what else are they doing that they deserve to be dumped?