Tenant signed contract then decided not move in

That's unfortunate, is it time to look at a better landlord insurer like EBM or TSI?

If they've signed a lease there's an agreement in place, loss of rent/compensation of rent should be claimable. If getting a bond is a requirement of the LL policy, and it takes longer than the bond period to re-let the property, the insurer should still pay out on the period of compensation of rent owing >bond period covered (eg. 4 weeks), so from 4 weeks onwards till it's re-let etc.

 

Depending on the state there are specific requirements for treatment of holding deposits. In QLD for example, on signing of the lease a holding deposit is transferred towards the bond. So technically you do have one weeks bond. If you are pursuing this I would lodge that as a bond with the RTA. If you are going down the insurance route you are then only short 3 weeks.

Without knowing all the specifics it is hard to make an assessment. Re: tribunal, worth noting there is no requirement to collect a bond at all. Most insurance companies in their PDS require it and base claims on the assumption one was collected, however the tribunal should (**I say should as we know it can be unpredictable**) look at your losses. In most cases any bond will be considered and applied as appropriate, but again there is no requirement to have one.

- Luke

 

If Monday was the 15th, then by Tuesday you had lost 1 days rent assuming the lease started on the Monday? I don't think any insurance will pay you in advance as at this stage it appears as though it is only potential lost rent?
What if you find somebody to move in this weekend?
Focus on getting new tenants for a start to minimise your loss in case the previous tenants don't pay, the insurance doesn't pay and the RE agent doesn't pay. Look after yourself first.
Talk about cart and horse getting mixed up.

 

Lots of people get into an entitlement or vengeance cycle rather than just doing whats best for everyone involved.

 

OP clearly stated they started advertising again. I didn't sense any malice or vengeance, just someone considering their options in an unfortunate situation, and considering those options proactively. Sounds sensible to me, particularly considering that actions they take now or in the very near future could have a material effect on the outcome of any subsequent claim further down the track.

- Luke

 

A lot of people seem to forget that rent of $250 -$500 per week works out to add up to a lot for every week of vacancy.

Any amounts of an insurance claim can easily be eclipsed by vacancy periods or delays

 

As many said, clearly your PM stuffed up and owes you for their muck up. If you are determined to stay with them despite this, id be asking for them to waive the fees they take off you for signing a new tenant- ie the first weeks rent that they take (from memory).

After all, if your insurance wont pay, and you cant chase the tenants then you’ll be out of pocket because of the poor practices of you PM.

 

There is no interpretation of malice or vengeance from my end either Luke.
Sensible to be proactive - Yes agree wholeheartedly

2 days down and already thinking that it may be 4 weeks - This is a stretch as the house would be ready to move straight in.
First action - Get somebody else in there then worry about chasing the RE agent (if they aren't already cracked off) or insurance.

 

4 weeks? Ouch... It's too early to tell though so keep your chin up.

Keep tabs on the time it takes for a new tenant (I'm sure you are already) another thing to strengthen your case when you chase for compensation due to incompetence of your PM.

[Edit] you can easily argue the fact that if the tenant that did the runner paid bond + two weeks they would be living in that house and more than likely not ran off.

 

I believe reading between the lines that the four weeks the OP is referring to is from lease signing (or commitment) in mid June to lease commencement 15 July.

As has been pointed out by other posters, the loss did not commence until the start of the lease on July 15 (more accurately July 22 as one weeks deposit was paid and presumably kept).

- Luke

 

Apologies for delay - newborns makes everything a blurr.
To wrap this up
- 1. we advertrised quickly and was able to find a tenant to move in within 2 weeks.
- 2. We also wrote to the prior tenants again to advise of their luck [passive-aggressive] (instead of paying until we find another tenant, able to reduce it down to 2 weeks. They paid up surprisingly -else we'd contest it at the tribunal.

We had already lost 3 weeks by giving the tenants a deferred start date. I do think next time, a bond is payable upfront including the contract signing to secure- else no deal especially for deferring start date.

 

Its my understanding this proposed legislation hasnt actually been implemented in NSW yet.

 

Get new tenants and move on with life. Should be able to get new tenants very quick, unless your house is a dump, therefore you probably charge too much and are in need of repairs.

Its not worth your time to punish these tenants for breaking the lease, and that's what you are doing, punishing them..

Also they hadn't payed the bond, so the house wasn't really locked in. You are never going to get them to pay advertising fees and rent until you find someone else. You could take them to court but even then the Magistrate isn't just going to take your side, the magistrate will first see if they can afford to pay you, if it was to cause them hard-ship they will never force them to pay.

New tenants! Move on! Why waste more money punishing tenants! make sure you have money put away for a rainy day. ONLY REASON YOU WONT GET NEW TENANTS QUICKLY is simply because you are charging too much rent, and you charging too much rent is not the lease breakers fault, you do understand this right?

 

Experienced real estate investors keep telling you your PM sux.
Unless they they say they made a mistake and fix the issue, it's mea culpa after that.

It's called "the law" and sometimes we have them in this country.

It's a signed contract. Go back to school if you don't know what it means.
Granted the so called "law" accounts for snowflake histeria and stupidity these days.

Or find a lawyer that will chase them for a fee, which gets added on the bill.
Or just move on. The OPs decision.

Sure, if the magistrate wants to make his/her own law.

If it's too much, look elsewhere, don't make enquiries and don't sign a contract.
You don't understand what a signed contract is. Yes it is their fault. They signed a contract.

 

I believe you are replying to an old thread w/o reading the outcome. OP had already found new tenant within 2 weeks, and the former paid up two weeks rent.

 

Like I said, Get new tenants and move on.

Reading near the end of this post I see she did indeed get new tenants fast. So what's the problem? She is not out of pocket waiting months and months for tenants, and it seems the tenants that didn't move in are doing the right thing. Typically when a rental is advertised you have a back log of at least 20 people applying for the same property, they could of simply contacted them, going through the list seeing if they were still interested as the tenants fell through.

I don't think I need to go back to school, its basic.. Do you always call authorities when you see a small rule being Brocken?? So every time you see someone walking their dog off lead you call the councils?

Seems more a peeing contest to me. Trying to punish someone to me.

All worked out in the end and I'm pretty sure there is many rules and laws rental providers breach when it comes to maintenance requests, imagine if all the tenants turned around and went to consumer affairs or xcat, but by what you say, they should. Simplest thing like cleaning the gutters is a big one rental providers breach constantly, weird I guess that is not needed for their insurance.. Oh well they only damage their own property.