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Tenants Vacating Property and Owe Rent

Discussion in 'Property Management' started by cmack, 19th Jul, 2016.

  1. cmack

    cmack Member

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    Hi all,

    I'm calling out for some advice from the more knowledgable people of Property Chat (who I'm sure have gone through similar before).

    I have tenants in my IP who's lease is up November 2nd 2016. I was planning to not renew their lease due to them having three animals at the property I was unaware of and also late rent on a consistent basis, I was then going to renovate the property as the property needs some love and the unit next to mine (identical size/layout) is renovated and receiving $100 p/w extra in rent.

    Last week I was advised by another owner on the block if I was aware my tenants had been moving out over the weekend (which I wasn't). When I contacted my PM she advised that they are 14 days overdue on their rent and were not answering their phones/emails. Since then we received notification that they were planning to vacate (break lease) and then just today my property manager forwarded on the below from the tenant:

    "sorry for missing your calls have been busy at work. the date I am vacating is the 31st of July. you can expect the keys back then. also my half of the rent will be paid tomorrow Tuesday 19th and Gavin's will be paid Wednesday 20th. I am happy with the terms of finding a replacement tenant due to us breaking the lease, in saying that I am not prepared to pay rent while renovations are being done, since that's not actively trying to find new tenants and if I do have to pay rent till the lease has finished then I will give back the keys then."

    First of all I'm frustrated my PM has advised the tenent of my plan to renovate. Secondly what rights do I have in this situation and how would you handle it?

    Very stressful and messy, appreciate any advice that can be offered.

    Cmack
     
  2. thatbum

    thatbum Well-Known Member

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    What do you want to happen exactly?

    There's quite a few options depending on whether you want to renovate, recover rent, or some combination of both. There are obviously some limits in eating cake and keeping it though.

    EDIT: Also, I don't think its that messy, and you shouldn't be that stressed. It honestly sounds like a straightforward break lease situation so far, with some rent arrears perhaps.
     
  3. Marg4000

    Marg4000 Well-Known Member

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    If you wish to claim break lease rent from the previous tenants, you will have to be actively seeking tenants. This may mean delaying the renovations as getting a tenant for 4 months till November would be difficult.

    Had you advised the tenant you would not be renewing? This may alter things.

    Alternatively, why not bring forward the renovations?
    Marg
     
  4. Scott No Mates

    Scott No Mates Well-Known Member

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    Put off the teno to screw the tenants plans for an easy exit. You'd decided to reno in November so stick with that plan.
     
  5. cmack

    cmack Member

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    I would like to complete the renovations whilst minimising my lost. The reality is I had planned to undertake the renovations in November and was going to get ready to hit the ground running come that date. By the tenents breaking the lease it has put me in a position where I need to rush into things and also re lease the property which is 50m from the beach in the middle of winter rather then leading into summer.
     
  6. cmack

    cmack Member

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    We were two days out from advising them. Bringing forward the renovations is an option but I don't have all my ducks lined up to begin them in 2 weeks time.
     
  7. thatbum

    thatbum Well-Known Member

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    Well then that leaves the 'renovate later' option then. So proceed on that basis and treat it as a normal break lease situation - I don't see the big deal. Its annoying I suppose, but at least you effectively get 4 months notice.

    There's always risks in trying to time renovations with tenanted property. At least its not a situation where you have renovations lined up and the tenants refuse to end their tenancy.
     
  8. cmack

    cmack Member

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    Is there anything that prevents me from making some improvements to the property after the keys are returned whilst we are actively looking for replacement tenants? And would we be able to advertise at the current rent price for the remaining months until November only?
     
  9. thatbum

    thatbum Well-Known Member

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    Yes. The fact that when you show replacement tenants, its going to look like a construction site and not very appealing to prospective tenants. Could definitely be criticised for not taking reasonable steps to mitigate loss then.

    If you're willing to do renovations now, you *may* be able to 'suspend' the outgoing tenant's liability for rent for the period of the renovations, and then start the claim for vacant premises period again once the renovations are complete and the property available for rent.
     
    legallyblonde likes this.
  10. standtall

    standtall Well-Known Member

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    I would forget about recovering 'break lease' rent unless you are prepared to go to tribunal.

    Cut your losses, may be claim it on insurance and be sure to report the tenant to tenancy database. They will struggle finding another place with this sort of attitude anyways.
     
  11. Azazel

    Azazel Well-Known Member

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    It's possible, if you advertise at the same rent and find someone before you do the improvements, and they are happy to move in at a certain date you might be able to jump in and do some stuff. But I don't think you can increase the rent if the previous tenants are liable for rent in between.