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Tenant did not complete or submit bond loan application to Dept of Health and Human Services Vic?

Discussion in 'Property Management' started by warek, 15th Aug, 2016.

  1. warek

    warek Member

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    Hi there

    I am trying to management our first investment property in Inverloch, Victoria. The town is a popular coastal town with average demand for rental properties. Our property is one of the worst avaiIable, it is a 50 + years old, unrenovated 2 bedroom cottage about 60 sqm in size. But is also priced accordingly and is one of the cheapest in the town, and it is in a desirable location. The house, fencing, run down steel garage is valued at 48000 on council rate notice. The valuer for the loan application valued it a 115000.

    Our long term plan is probably to demolish the house and build on the site. However we would not like it to be damaged in case we decide to not develop the site and sell the house in 3-4 years.

    We bought it in May and there was an existing tenant in place on a 6 month lease that had expired and became a periodic lease. The tenant, in her mid twenties, is a single mother, looking for work, and has been in place since 2014. The previous owner used a local PM and the tenant had a bond loan through the Dept of Housing which was refunded in full when the property was sold.

    The tenant wished to continue renting the property.The tenant has signed a 12 month lease with us, 220 a week with agreement to pay a bond of 955. We provided the form for the new bond loan application,with our section completed and gave it to the tenant to complete and submit.

    Two months later there is no bond loan. I rang the Dept and they said they have not received any application. I ran the tenant mobile phone who did not answer, I left a message saying bond application had not been received, and if she had a reference could she follow it up. I also offered to get a new form if she had lost it. She did not return my call. It is now another 3 weeks and nothing has changed. I have contacted the tenant before on her mobile, left messages and she has returned my previous calls, so I am certain she received the message.

    I believe I would be able to find a new tenant without any trouble. My thought with the existng tenant is that she is up to date with her rent payments, except the bond, is not damaging the property, and I am helping a single mother.

    What should I do now?

    Thanks for any suggestion.

    warek
     
  2. thatbum

    thatbum Well-Known Member

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    I guess your options are:

    1. Do nothing about it and let the tenancy continue;

    2. Prod the tenant along to try and get a bond of some sort lodged; or

    3. Move to breach and evict the tenant.

    I'd probably try number 2 for a while before going to number 3.
     
    Terry_w likes this.
  3. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    I'd do number 2, but sit down with her and fill out the form together. The procrastination is the mortal enemy of paperwork, don't give it a reason to occur.
     
  4. legallyblonde

    legallyblonde Well-Known Member

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    P.s. in tassie it is illegal for bond to be more than four weeks rent. Not sure about other states!
     
  5. Scott No Mates

    Scott No Mates Well-Known Member

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    That's pretty much the case in most states AFAIK (but I only work in NSW so can't comment on other states). Is this the reason that they haven't paid the bond - it exceeds the legally required amount? The lessor should be lodging this with the bond board not the tenant.

    In Qld, you can increase the bond when you sign a new lease.
     
    legallyblonde likes this.
  6. warek

    warek Member

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    Thanks for the replies, when it was managed by the PM the bond was 955, and the weekly rent was 220, so I just made it the same.

    I got in touch with the tenant at last, who said she was surprised the application had not been lodged, she left it with her mother to post. She was going to follow it up and get back to me, so I will wait and see what happens

    Have a good day

    warek
     
  7. Scott No Mates

    Scott No Mates Well-Known Member

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    Just confirmed on consumer Victoria website - for rents <$350/wk bond is one month ie $953 approx
     
  8. Lil Skater

    Lil Skater Well-Known Member Business Member

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    $220 per week is actually $956 per calendar month (220/7x365/12)

    Anyway, why was the bond refunded anyway?! That's what is confusing!! Hopefully it was just an accident and will be sorted out quickly for you.
     
    legallyblonde likes this.
  9. Scott No Mates

    Scott No Mates Well-Known Member

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    I must've used a Gregorian calendar ;)
     
  10. warek

    warek Member

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    I believe it is policy that when a lease has a bond loan it has to be repaid from the bond authority back to the Dept of Housing. The tenant then has to apply for a new loan loan for the next lease.

    At this point the the tenant has told me her mother did mail the new bond loan application and does not know what has happened. She is going in to talk to them on Friday.
    We are slowly making progress, she seems to be trying to do the right thing.
     
  11. Lil Skater

    Lil Skater Well-Known Member Business Member

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    That's not the case at all, I'm afraid. The bond stays in place regardless how long the tenant is in the property - I have never refunded a DHS bond mid tenancy because the tenancy is the entire length of their stay, not the lease period.

    Sounds like the tenant is being reasonable though, so hopefully works out all okay.