NSW Returning bond to tenants

Discussion in 'Property Management' started by giraffez, 26th Jun, 2020.

Join Australia's most dynamic and respected property investment community
Tags:
  1. Mel Morgan

    Mel Morgan Sydney Property Manager Business Member

    Joined:
    6th Jun, 2017
    Posts:
    1,455
    Location:
    Sydney
    The last day is calculated. The only instance in my software where I don't include the last day is if I have a tenant moving in on the same day.

    I wouldn't hold back on the tenant's bond due to a disagreement with the PM. They will have provided the tenant their rent to vacate amount and the tenant shouldn't be waiting on their bond because of this.
     
    Perp and giraffez like this.
  2. Tom Rivera

    Tom Rivera Property Manager Business Member

    Joined:
    1st Jul, 2015
    Posts:
    2,718
    Location:
    South East Queensland
    Is it really fair of us to be blaming the owner for holding up the tenants bond over one days rent when it appears to be the agent at fault here?

    As a compromise, you could agree to release all of the bond except an amount equal to the last day of rent? Or you could tell the agent to refund the bond, but if the tenants DO owe one last day- you'll be expecting the agent to pay it after the bond is gone, ha!
     
    giraffez, Scott No Mates and wylie like this.
  3. housechopper2

    housechopper2 Well-Known Member

    Joined:
    5th Oct, 2016
    Posts:
    493
    Location:
    Melbourne
    Yes it seems fair to blame the owner. He is the one not releasing the bond which impacts the tenants.

    If the owner is not happy with the agencies answers he should escalate the enquiry immediately to get an answer he is satisfied with so not to disadvantage the tenants.
     
    Perp, Rugrat, Mat and 1 other person like this.
  4. wylie

    wylie Moderator Staff Member

    Joined:
    18th Jun, 2015
    Posts:
    14,019
    Location:
    Brisbane
    This sounds good. Agent might get his/her act together and work out the correct rent amount, but the tenant shouldn't be waiting while the agent and landlord work this out.
     
    giraffez likes this.
  5. thatbum

    thatbum Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    5,850
    Location:
    Perth, WA
    You can't charge for move in day and move out day at the same time. Pick one.
     
  6. wylie

    wylie Moderator Staff Member

    Joined:
    18th Jun, 2015
    Posts:
    14,019
    Location:
    Brisbane
    Do you mean for the same tenant. Move in Saturday (that's the first day's rent to be charged).

    Move out Friday means they pay until midnight that night and that day also is changed. At least when we had to try to get someone out we were told we had no legal right to enter until midnight on their move out day, until then the house was "theirs".

    Having said that, I'd not be quibbling about this and the tenants need to get their bond returned. Anything to be sorted is between the agent and the landlord. The tenant's bond should not be held up over this.
     
  7. thatbum

    thatbum Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    5,850
    Location:
    Perth, WA
    Yes for the same tenant. A lessor can't really charge full rent for two partial days of tenancy - at best it would be one of them. Generally by my reckoning its move-in day that is free, but it doesn't really matter which one it is tbh.

    I guess its analogous to a hotel stay scenario.
     
  8. Mel Morgan

    Mel Morgan Sydney Property Manager Business Member

    Joined:
    6th Jun, 2017
    Posts:
    1,455
    Location:
    Sydney
    giraffez likes this.
  9. thatbum

    thatbum Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    5,850
    Location:
    Perth, WA
    Yes which is why I say the move in day is free.
     
  10. wylie

    wylie Moderator Staff Member

    Joined:
    18th Jun, 2015
    Posts:
    14,019
    Location:
    Brisbane
    @thatbum if you rent a place from Saturday, do you not charge for Saturday?

    I'm pretty fair and flexible, but a lease start date is a lease start date. Same with the end date. I've never had anyone question this.
     
  11. Mat

    Mat Well-Known Member

    Joined:
    23rd Jun, 2016
    Posts:
    152
    Location:
    QLD
    I think what he's suggesting is that leases are from midnight to midnight, but you generally don't get the keys at midnight (if you do, that agent deserves a raise for going above and beyond!)

    I can see why he'd say that one of the days would be "free", though really it's more saying two of the days are half days.
     
  12. thatbum

    thatbum Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    5,850
    Location:
    Perth, WA
    I only charge for one of the moving days yeah, usually the move in day I count as 'free'. I actually haven't dealt with the issue professionally as I assumed everyone did it the same.

    But on general legal principles I would say its not really tenable for a lessor to claim rent for both days. As @Mat mentioned, pegging possession to who has possession at midnight is one way to do it.
     
  13. Mel Morgan

    Mel Morgan Sydney Property Manager Business Member

    Joined:
    6th Jun, 2017
    Posts:
    1,455
    Location:
    Sydney
    Actually move in date is also payable as per the date stated in the lease agreement in NSW, so its really unlike a hotel stay.
     
  14. thatbum

    thatbum Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    5,850
    Location:
    Perth, WA
    Where does it say that?
     
  15. Mat

    Mat Well-Known Member

    Joined:
    23rd Jun, 2016
    Posts:
    152
    Location:
    QLD
    It doesn't say that specifically, but it also doesn't not say that specifically.

    S49 of the Act states that the tenant must have vacant possession on the day that the tenant is entitled to occupy the premises (at midnight? Assuming "day" means "24 hour block of time", I've never encountered a single lease that has complied with this).

    Schedule 1 of the Regs (Standard Form Agreement) is equally ambiguous, only stating "this agreement is for (x) months/years, starting on x/x/x and ending on x/x/x". It doesn't specify whether it refers to from midnight to midnight, an arbitrary time on those dates, or what.

    If we literally made a tenancy agreement from 1/8/2020 to 2/8/2020 you would not be able to take possession until at least open of business on the 1st, and would have to return vacant possession by at the latest close of business on the 2nd. When you compress it down to the shortest possible time, it seems ridiculous and inequitable to expect the tenant to pay for two days when their effective occupancy is one day or a little over it. It seems to me that charging for the move-in and vacancy date is a bit of having your cake and eating it too (and given the Act is not specific enough about it, if a tenant were to challenge it the tribunal would likely fall back onto the principles of equity).
     
  16. wylie

    wylie Moderator Staff Member

    Joined:
    18th Jun, 2015
    Posts:
    14,019
    Location:
    Brisbane
    In over 40 years of being a landlord, I've never had a tenant not want to pay for the first day of the lease, when they move in, nor for the last day, when they move out.

    They are entitled to have the keys until midnight of that last day and an agent once told me they really are entitled to get the keys early on the day they move in, but he'd never had any tenant want the keys at 12.15am in the morning.

    It's not like I've had to even think about it either. I've never had it questioned.
     
    Tom Rivera likes this.
  17. thatbum

    thatbum Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    5,850
    Location:
    Perth, WA
    Same, but me the other way. I'm curious enough to try and look into it further when I get some free time. Obviously it rarely is a practical issue, but it might be here I guess.

    As a general principle of legal interpretation, a reference to a "day" is full clear day, which is why you have to add a day to some of the notice period requirements that most PMs and lessors are familiar with.
     
    Mat and Perp like this.
  18. Mel Morgan

    Mel Morgan Sydney Property Manager Business Member

    Joined:
    6th Jun, 2017
    Posts:
    1,455
    Location:
    Sydney
    upload_2020-7-7_16-12-8.png

    I'm just doing up this lease now - the date is when the rent is charged and although it doesn't have to be, its always been the first day of the lease.
     
    giraffez and wylie like this.
  19. Tom Rivera

    Tom Rivera Property Manager Business Member

    Joined:
    1st Jul, 2015
    Posts:
    2,718
    Location:
    South East Queensland
    I can't say I've ever across the argument before that tenants should get their first or last day free.
     
  20. Propagate

    Propagate Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,495
    Location:
    Melbourne
    But if it's midnight to midnight then doesn't that mean the tenant is technically able to take possession at 12:01am on the first and vacate by 11:59pm on the 2nd? Which is 2 minutes under 2 days full days?

    In the hotel scenario you have to be out by say 10am on the second day so they can re-let the room the second night, so the hotel gets 2 "days" (nights) pay but the landlord only gets one for the same period as they can't re-let the same day as the vacate like a hotel does.

    For the hotel, if you book the 1st to the 2nd you'd get a check in of 3pm to a check out of 10 am, you pay one night for night and have a window of stay of 19 hours.

    For the tenancy of the same dates 1st to 2nd, midnight to midnight, you have a technical occupation window of 2 minutes short of 48 hours (2 days).

    I can't say I've ever checked down to the day what any of our agents have reconciled a tenancy at, but I always assumed the paid days would be from the start date on the lease to the vacate date, as per the OP.