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Tenancy Tip Thursday - Tenant has done a runner

Discussion in 'Property Management' started by D.T., 29th Oct, 2015.

  1. D.T.

    D.T. Adelaide Property Manager Business Member

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    Hiya's

    This week I wanted to talk about what happens when your tenant has done a runner.

    Lets say a tenant has vanished without a trace and no one knows where they've gone or how to contact them. The neighbors don't know and the contacts provided on the lease application don't know either. As I said in the entering the property tip, the owner or PM (take a 2nd person as a witness) is allowed to enter the property themselves if there's reasonable suspicion of abandonment. You must make an application to tribunal to request possession of the property (as otherwise the tenant still legally has possession til end of lease) and the bond. I discussed in the bond tip how much bond you should have available.

    Quite often this involves 4 items of note:
    1) Whether they've done damage to the property
    2) Whether they had outstanding rent owing
    3) Whether they've abandoned any belongings or goods
    4) Re-advertising and finding a new tenant

    1) What if they've done damage?
    This is where having a property manager who has experienced these types of situations is important. We have access to an online portal for the insurance company, say EBM, where signups and claims can be performed. You need to be thorough in your claim to ensure you present the information accurately, include all of it and be very specific.

    Using EBM as the example, coverage is available for up to $50K for malicious or accidental damage to buiding and same again to contents (fittings, fixtures, carpet etc). It's worth noting here that the excess here is $400 per claim, not per event, so you want to make sure you get as much on each claim as possible. I've found that claims under $25K are generally processed very quickly.

    2) What about rent outstanding?
    The bond held can help against outstanding rent but there's also a couple of options available in the insurance realm. Using EBM as an example again, they allow up to 6 weeks rent for "depart without notice" , but, they also cover up to 52 weeks lost rent due to damage. There's no excess payable on rent claims and it depends on how you present the info to them as to what your entitlement is. It's also your responsibility to mitigate your loss.

    3) What about the stuff they've left behind?
    Well, there's quite a bit of legislation on this. There's a few categories depending on what the stuff is:
    A) Pets. Unfortunately people leave pets behind, and they don't count as property. You can call the council or the RSPCA to collect them.
    B) Personal documents such as passport etc. Make reasonable attempts to contact tenant, then dispose of them after 28 days.
    C) Perishables - dispose straight away.
    D) All other stuff. You first need to estimate it's value and (reasonably attempt to) notify the tenant you have belongings
    • If its value is less than what it'd cost to remove and store the items then you may dispose of it after 2 days post possession (must keep it reasonably safe in the mean time).
    • However, if it's more valuable than that, then you need keep it safe for 28 days before disposing of it. You can also opt to sell the items instead of disposing, if you wish.
    Interestingly, against the bond, you can claim your personal time (at a rate of $22.50 per hour) plus trailer hire costs and storage costs, incurred.

    It's important to handle their items in accordance with the legislation because if the tenant reappears then tribunal can decide on matters accordingly such as compensation. There's also fines involved for not following the legislation.

    4) Re-advertising and finding a new tenant
    Woo. We finally got all those head aches sorted out. Lets rent out the property again. Probably need to get it cleaned, gardened and looking smart again. It might need updated photos and should be advertised prior to when its available so that you can line someone up ready to go as soon as the property is available.

    ----

    So, who here has gone through this process as either a tenant, owner or PM? Any stories to share? Additions or corrections are welcome too.
     
  2. Nemo

    Nemo Well-Known Member

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    I like your tips, very informative. Luckily I haven't had a tenant do a runner and hope never to need this info :)
     
  3. Observer

    Observer Well-Known Member

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    @D.T. What about the tenant? Surely he must be taught a lesson to not do this to the next landlord. Do you go to court/tribunal to find him?
     
  4. thatbum

    thatbum Well-Known Member

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    Your realistic options for 'teaching them a lesson' are to list them on a tenancy database, and obtain a judgement debt against them at court/tribunal.

    The court/tribunal isn't going to find them. Its not how the system works.

    Note you will have difficulty enforcing your judgement debt unless you are able to find them (and their assets/income).
     
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  5. jim1964

    jim1964 Well-Known Member Premium Member

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    I have, and i can honestly say
    1)Thumbs UP for EBM
    2) Thumbs DOWN for TS.
     
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  6. jim1964

    jim1964 Well-Known Member Premium Member

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    Yes, its a pain in the @rse,for one it was a 4 month process
     
  7. D.T.

    D.T. Adelaide Property Manager Business Member

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    Yep. Basically just list them on the database and give them a suitable reference if asked. Better to focus on the future than dwell on the past.

    I have heard of one occasion where the tenant returned to make amends because they were getting rejected for rentals due to the above
     
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  8. Observer

    Observer Well-Known Member

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    Interesting. Isn't enforcing the judgement debt a part of tribunal/court job? How hard can it be to trace and find a person? Just check the workplace, relatives, etc.

    I just can't imagine it being my job to find them.
     
    Last edited: 29th Oct, 2015
  9. Observer

    Observer Well-Known Member

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    True. However it is not so much dwelling on the past. It's also not about the money either (at least for me). It's just a lesson for the runner to prevent this kind of behaviour in future.
     
  10. Nemo

    Nemo Well-Known Member

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    Also why you should have insurance.
     
  11. thatbum

    thatbum Well-Known Member

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    Unfortunately my experience has been that the type of people that do a runner aren't the types to really learn any lessons from it either.
     
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