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Tenant – capacity to pay rent and damages

Discussion in 'Property Management' started by Property Investment Cloud, 24th May, 2016.

  1. Property Investment Cloud

    Property Investment Cloud New Member

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    I need some advice. One of my tenants has left the property and stated to the property manager that he no longer can pay rent. I had expressed my concerns with property manager before if the tenant has capacity to pay but the property manager assured me everything is ok. The second issue is that the property has been damaged and dirty. The PM hasn’t advised for any issues during the regular inspections. What are my options here, the insurance will cover the rental payments but the bond is not big enough to fund the repairs…
     
  2. JacM

    JacM VIC Buyer's Agent Business Member

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    Hi @Property Investment Cloud

    Insurance will cover some damages, depending on your policy. If your PM has neglected to keep the appropriate records, you'll want to move agencies. You may also have a case against the PM at tribunal.
     
  3. Property Investment Cloud

    Property Investment Cloud New Member

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    Agree, Jacqui. In theory the landlord insurance should cover these but after reading my insurance policy I think they will argue that most damages are accidental and not a malicious ones. It looks like the policy only covers malicious damage. And I don’t know if I can successfully prove that the damages on are malicious. All the rooms have some kind of holes in the plaster. It is unusual how the property manager can miss this during the inspections. What documents the PM has to get during the application process to verify capacity to pay and maintain? It is a big agency so I assume they should have a process to follow before new tenancy contract is signed?

    What will be my chances to get compensation from the PM at the tribunal?
     
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  4. thatbum

    thatbum Well-Known Member

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    Only legal advice can give you a proper answer to this.

    Generally speaking though, such claims are difficult to prove for a variety of reasons.
     
  5. Moych

    Moych Well-Known Member

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    I've seen other people post on here about similar situations recommending that the repairs to damaged walls etc should be claimed from the bond, whereas the lost rent can be claimed from insurance. That same situation may be able to be applied to your situation?

    Some of the Property Managers on here would be better placed to confirm that though.
     
  6. Xenia

    Xenia Adelaide Property Manager Business Member

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    Do you know how much the cleaning costs exceed the bond?

    Usually you can just tweak it so that it all gets paid and claimed at minimal cost to the landlord.
     
  7. Lil Skater

    Lil Skater Well-Known Member Business Member

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    Where's the property located?

    I'd look into a new insurance policy once this one is done that covers accidental damage. Depending on the policy they may cover the holes in walls as malicious, but be careful as some want to charge you a separate excess for each hole.

    I'd also look for a new PM. Do you have the routine inspections with photos?
     
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  8. Property Investment Cloud

    Property Investment Cloud New Member

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    Yes, some of the holes will be covered by the insurance but the insurer will only pay for a few walls to be repaired and repainted. I haven’t received their official response yet. The house was freshly painted when they went in and now it has to be repainted again after the plaster is fixed. Based on my experience with previous interior painting quotes, this job will be at least 7-8K. Some of the built-in wardrobes will need to be repainted too. The carpet was brand new and I don’t think the multiple stains can be cleaned completely. The rent will need to be reduced if the stained carped is left in. New carpet will add another few thousands to the bill and I think it will be difficult to get something from the insurer for this. Cleaning will be probably close to 1K, there are some other damages to fittings and doors. The bond is only about 2.5K unfortunately. I received routine inspections reports with photos but none of these show the damages and PM’s comments don’t state any issues.
     
  9. thatbum

    thatbum Well-Known Member

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    Does the whole house really need to be repainted after patching a few holes? Presumably these holes aren't massive ones if they weren't noticed before?
     
  10. Property Investment Cloud

    Property Investment Cloud New Member

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    Has anyone managed to successfully prove a case against their PM in a court? I am seriously considering this. There should be lawyers that specialise in such property disputes?
     
  11. bob shovel

    bob shovel Well-Known Member

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    I had a tenant do similar stopped paying a few weeks prior to leaving. Later found out that centrelink paid the deposit or some type of assistance app they decided that would cover the last 4 weeks rent for them. ...but not the extra cleaning and damages. Went through tribunal and got some back plus tica . Pm did a great job
     
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  12. thatbum

    thatbum Well-Known Member

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    I've given legal advice on this issue quite a few times.

    Like I said earlier, the situations I advised on meant that my advice ranged from "no real prospects of success" to "I don't like your chances at all but if you have a crack if you want".
     
  13. Lil Skater

    Lil Skater Well-Known Member Business Member

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    $7-$8k painting and $1k cleaning?! That sounds excessive. Not something anyone could miss..

    As @thatbum has said, I don't like you're chances - but if you feel they have been negligent you can always give it a try.