Renting to potentially terminally ill tenant?

Discussion in 'Property Management' started by aussieB, 27th Feb, 2020.

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  1. aussieB

    aussieB Well-Known Member

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    What do investors here think about letting their property to tenants with (possibly) terminal illnesses such as cancer ? Tenants could be young/old, single or with partner.

    When I look at it from a purely business perspective, it makes no difference to me - the tenant signs a lease -- pays rent on time - looks after the property - pays bills on time - all maintenance requests tended to - both parties honor their contracts - all good.

    However, if there is a lapse in payments, then all the business perspective aside, I would feel hesitant to go after a tenant who is not well (even if the payments are partners responsibility etc). If there is even an organic delay in tending to repairs and if such repairs cause even more trouble to a dying person, it would weigh very heavily on me. If the tenant renews lease, just knowing the cost of terminal illnesses, I would be hesitant to increase rents. If tenant passes away or commits suicide, it could potentially mean a negative stigma ? Although I think someone passing away is a more acceptable turn of events.
     
  2. qak

    qak Well-Known Member

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    How would you know?
     
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  3. PandS

    PandS Well-Known Member

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    sometimes life is more than just money?
    write it off as a good cause if they missed some payment and never increase rent
     
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  4. Lil Skater

    Lil Skater Well-Known Member Business Member

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    You can’t predict the future, someone could have all this happening without you being aware.

    This is where it can be good to have some separation between yourself and your tenants.

    It’s bloody hard though. I had a suicide over Christmas, he was a really great guy and it did weigh on me. The owner was happy to worry about the finances after and just let me do my thing with the family. Financially the owner was out of pocket less than $300 and we got a new tenant without advertising, and the owner got a discount on their letting fee. New tenant was disclosed the history and they were okay with it.

    I’ve also had plenty of tenants with cancer, in my experience many prefer business as usual. A good friend has just finished up treatment for cancer that she was diagnosed with only weeks after her marriage broke down and she moved with her daughter into their own rental. She was keen to keep things as normal as possible and start her life her way.

    I say business as usual where reasonable and on a case by case basis.
     
  5. skater

    skater Well-Known Member

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    We've got long term tenants who are now both terminal. She's got cancer & he's got motor nuerone disease.
     
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  6. Marg4000

    Marg4000 Well-Known Member

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    Why would you discriminate against someone with cancer?
    Isn’t their life difficult enough already?
     
  7. balwoges

    balwoges Well-Known Member

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    The only problem is payment of rent when a tenant passes, rent cannot be taken out of deceased estate until probate is granted. The landlord can be out of pocket for a couple of months, sometimes longer.
     
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  8. Lil Skater

    Lil Skater Well-Known Member Business Member

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    In Vic once notified the lease is terminated (if sole tenancy) with 28 days’ notice - but can be reduced by agreement.

    Bond can also be released without probate depending on circumstances. Best case scenario they have a family that is willing to help, worst case you follow the removal of goods etc. there is still the possibility of being out of pocket without insurance of course.

    There’s this risk with any tenancy, you’re dealing with human beings and even someone otherwise healthy could be hit by a car tomorrow. In the 10+ years I’ve been doing this I’ve never had someone apply to a property and point out they have some kind of disease, but I expect there have been a number that have in that time.
     
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  9. balwoges

    balwoges Well-Known Member

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    Who would sign the Bond release?The bond automatically becomes part of the Estate.
     
  10. Phar Lap

    Phar Lap Well-Known Member

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    Depending on circumstances. Could be a default condition.
     
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  11. Lil Skater

    Lil Skater Well-Known Member Business Member

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    This is why I said it depends on circumstance, such as if there’s no assets. It can be the next of kin or legal representative.

    The tenancy itself can be wrapped up fairly quickly and this will limit out of pocket expenses to the owner. If you can wrap up the tenancy quickly and you have a cooperative family, then the lost income should be minimal if there is lengthy delays.
     
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  12. balwoges

    balwoges Well-Known Member

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    Being in the unfortunate position of being next of kin & Executor of my late son's will, when my sons landlord asked to be paid, I checked with my son's solicitors Turner,Freeman to ask if I could pay him and was told only funeral expenses can be paid out of his estate until probate was granted.
    This is true, however, the income is not lost, its just paid when probate is granted.
     
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  13. Michael Mitchell

    Michael Mitchell Property Manager Business Member

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    In Qld, when one party lodges a bond claim, the other parties have 14 days to dispute otherwise it gets processed.........

    upload_2020-2-28_17-45-22.png
     
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  14. balwoges

    balwoges Well-Known Member

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    Too bad if the other party is dead ... :rolleyes:
    The agent would have been notified of the death and would have no authority to disburse the bond.
     
    Last edited: 28th Feb, 2020
  15. Lil Skater

    Lil Skater Well-Known Member Business Member

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    True, but if there’s no assets beyond the bond then there’s no further income to claim. No denying it could all take months, but the situation and how/who it’s paid to and when varies depending on whether there’s a will, assets, next of kin etc.

    I don’t like being in the asking position in these situations, but I’d much prefer that than to be in the position you were :(

    This will be the case in Victoria by July as well, however in all states I can’t imagine that you can just refund the bond without some agreement from the next of kin or executor of the will? The bond is always an asset to the tenant and therefore their estate.
     
  16. balwoges

    balwoges Well-Known Member

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    I give up ... :D Netflix is more entertaining than this thread ATM ... :)
     
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  17. Michael Mitchell

    Michael Mitchell Property Manager Business Member

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    The Lessor/Agent isn't disbursing the bond. The RTA("Government") holds the bond in trust for the Tenant. The Lessor/Agent makes a claim, under the legislation the Tenant or their representative duly appointed/estate etc/*whatever* has 14 days to dispute the claim otherwise it gets processed as claimed. Providing false/misleading information to the RTA is an offence, in that regard, this isn't a free-for-all for the deceased Tenants bond, the Lessor/Agent best have evidence to substantiate any claim lest the RTA were to investigate the claim, and provided the tenancy was ended properly in accordance with the RTRA Act, it may 'suck', but if the Lessor/Agent has done their bit right, the process runs as normal according to the time frames.
     
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