Tenants refusing to renew lease (Sydney)

Discussion in 'Property Management' started by chylld, 15th Jun, 2016.

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  1. SeafordSunshine

    SeafordSunshine Well-Known Member

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    Just some thoughts
    It's all about knowing the market.
    Its all 'OK' to keep 'upping the rent' but knowing the seasonality of things, for example
    1.Current vacancies,
    2.how much does it cost to move,
    3.will the kiddies have to change schools,
    4. local jobs, ( eg. have they closed down the largest employer in the district?)
    5.Do we know why the OP's tenants don't want to renew? Could it be something thats easy to negotiate?
    6.Have the benefits and certainty of a fixed rent for the lease duration been explained to them?
     
    Last edited: 20th Jun, 2016
  2. twobobsworth

    twobobsworth Well-Known Member

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    WattleIdo likes this.
  3. SeafordSunshine

    SeafordSunshine Well-Known Member

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    Unless things have changed, without me noticing,
    NSW ( Fair Trading ) current lease says 30 days notice to vacate during the last 30 days of the lease. ( Notice should be given in writing with an extra 4 days for postage) ?
     
  4. bunkai

    bunkai Well-Known Member

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    Office of fair trading told you that NCAT would do this? I suspect not.

    But if you wanted to have a go, as a tenant, I'd let you ...

    This is a pointless exercise as any tenant who wanted to avoid this could easily cost you more than the risk you are trying to mitigate. The power trip is not worth it.

    Those that do sign up for another fixed term on request = awesome.
     
  5. Befuddled

    Befuddled Well-Known Member

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    What if you give these options to the tenant at the end of a fixed lease?

    Option A: Roll over onto periodic with rent = X
    Option B: Re-sign a fixed lease with rent = X - Y where X > Y obviously

    Basically provide an incentive to sign a fixed lease but leave the option of periodic on the table...at a premium
     
    Last edited: 21st Jun, 2016
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  6. MyPropertyPro

    MyPropertyPro REBAA Buyer's Agents Sutherland Shire & Surrounds Business Member

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    I'm not sure why you'd 'suspect not' - the OFT routinely given guidance on how they believe a tribunal would a view a situation. They didn't use the words 'thrown out' though!

    What do you mean they could cost you more than the risk you are trying to mitigate? If you're talking about time at the tribunal and/or application costs then the small chance a tenant would challenge this is a decision for the landlord and whether it offsets the possible vacancy risk. I've been doing this for years across multiple properties and it has never come up as a challenge. In the off chance it does, I would say an hour at the tribunal and some application costs will have been more than offset by the weeks upon weeks of vacancy I've reduced over the years.

    Granted, it is far easier to manage a periodic lease and the associated disadvantages on one or two properties so it's probably not as much of an issue for those who don't mind. Having multiple properties go vacant around Christmas (or at the same time at any time) because the tenants were all on periodic leases and gave minimum notice isn't something any landlord wants to deal with. Some people may not wish to deal with even one but each to their own.
     
  7. MyPropertyPro

    MyPropertyPro REBAA Buyer's Agents Sutherland Shire & Surrounds Business Member

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    @Befuddled That would work provided you abide by the appropriate notices for the rent increase in the first instance. Obviously you're saying that X > than the the current rental amount on their fixed term lease?
     
    Last edited: 21st Jun, 2016
  8. Befuddled

    Befuddled Well-Known Member

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    Yes. If I was renting I'd probably be more open to this than a notice to renew/vacate combo that's been pitched here. Wondering if others have tried this approach
     
  9. Nick Valsamis

    Nick Valsamis Well-Known Member

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    Yes, it can work in some situations and usually does if the tenant likes and wants to stay at the property. In that case they would rather take the new lease instead of a rental increase if you mentioned it.

    It should only be done where you can still increase the rent within market rates because if the tenant didn't sign on for another term and you do actually increase the rent, some tenants may then decide to move due to that.

    It's always best to ask the tenants what their plans are prior to the end of the lease term to gauge if they are going to stay on and react accordingly.
     
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  10. bunkai

    bunkai Well-Known Member

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    If you read my post - you'll see I am agreeing with you. Definitely negotiate to achieve another fixed term.

    Have you had a tenant not play ball and taken them to the tribunal?
     
  11. MyPropertyPro

    MyPropertyPro REBAA Buyer's Agents Sutherland Shire & Surrounds Business Member

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    Yep, cheers. I was more interested in your cost/benefit and whether that related to tribunal costs etc.

    Not really sure what you mean but taking a tenant to a tribunal - do you mean over not signing a fixed term lease? It can't done anyway as the lease either rolls over or it doesn't based on whatever action is taken prior to lease expiry. I've never had to worry about whether or not the tenant signs the lease or not because if they don't, I retract the lease offer at -30 days to lease expiry, the Notice to Leave stands and I commence advertising for a new tenant. If the tenant subsequently signs the lease agreement and returns it I then have to make the choice whether I execute it and accept the wasted money on advertising or proceed with the Notice to Leave. The former is probably the smartest option as even though you've essentially wasted money on advertising (if the agent charges, which for standard advertising they shouldn't), you've achieved the outcome of no vacancy and you won't have to pay a letting fee either.

    I've had some PMs say you can't retract a lease offer once it's been issued which is also incorrect. As per standard contract law, if a document isn't signed by both parties it's not an executed document and therefore means nothing. There are certain rules around holding deposits with regard to letting to the same tenant but like a sales contract, if one party signs and the other doesn't there is no contract (lease) and standard contract provisions apply.
     
  12. ashish1137

    ashish1137 Well-Known Member

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    Hmmm,

    Informative thread. A question though in relation to NSW; let's say my lease has expired in May. This means I am currently on a periodic lease?

    The agent and the landlord wants a rent hike of 20 dollars (currently paying 530) which might be in line with other properties.
    However, I have following issues (already asked but need a professional opinion).

    My lease started nov 2015. Deposit accepted at 510, 2 days after that agent realised they made a mistake and started asking for 550 or return deposit. We mutually agreed at 530 as I dint wanted to leave the property.

    Exactly after 6 months, they demanded another 20 dollar hike. On retaliation, they gave me an extension of 2 more months with a notice of 60 days (in line with the process).

    Can I go to tribunal? On the notice it said u have only 30 days to go to tribunal but that period has ended.

    Even if I pay the increased rent, can I ask them to remain on a periodic lease. I think it gives me more lexibility and 26 weeks to vacate.:)

    Am I right in thinking that?

    Regards
     
  13. WattleIdo

    WattleIdo midas touch

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    No I don't think so, not quite.
    In NSW the landlord has to give 90 days for no reason. Also, they are entitled to raise the rent.
    If you are being forced to sign a fixed term lease or leave, that's a different matter. That's what the thread is about.
     
    Last edited: 22nd Jun, 2016
  14. Nick Valsamis

    Nick Valsamis Well-Known Member

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    Yes you have left it too late to challenge the increase. Now outside of your fixed term lease you will need to give 21 days notice.

    You can remain on a periodic lease but it seems like they have either under priced the property or are increasing it to force you to leave if the increase puts it above current market rates.

    Also note that they are not allowed to ask for a higher rent after you have paid the deposit. If this happens, you should lodge a complaint with Fair Trading who will contact the agent to resolve the issue.
     
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  15. Judi

    Judi Well-Known Member

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    Whether a tenant is staying is all to do with THEIR SITUATION, they will have a different mindset & don't think they always leave after certain time is your property's fault.
    It is important to know your rental market too. & don't be afraid to increase rent, if the market allows it, do it.

    I had a tenant left after four months with a signed 12 months lease, IP was rented out the second day,& with increased $30 per week rent. & it's not just accident or luck, because I still get many calls & messages from the rental ads.
    So don't be afraid that they want to leave, It's a hassle sometimes. But. More rent maybe.
     
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  16. chylld

    chylld Well-Known Member

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    Sorry to bring up an old thread, but have a friend as tenant on a periodic lease. They requested some repairs and the landlord replied with a 90-day eviction notice. Could this be considered retaliatory at tribunal?

    Could the landlord simply get around this by doing the repairs and then re-issuing the eviction notice?