The Elephant in the Room

Hi PropertyChat Community,

I thought it was important to start this topic as it's something which I think gets overlooked and put aside as simply 'part of the game'. That is the effects of bad tenancy situations, the financial ramifications of rental arrears and property damage.

I posted this thread a little under 2 months back now, (yes time flies when you're having fun) which if interested will give you an insight into where I'm at.
Tenants behind on rent and damage

On the 12/04 it will have been 4 months since the existing tenants stopped paying, to where we are at now, which is a second tribunal hearing to start the ball rolling for compensation and damage repairs. I still refuse to accept how long it's been from start to finish, but facts are facts.

To get to the point, for any (almighty) landlord who has been in this predicament, I'm sure we can all agree that the situation consumes you more than we'd like it too. For months now I've tried to tell myself to 'put it to the back of your mind' or 'it'll be over soon', but we both know that's not the case.

The effects it has on your mental, physical and emotional health can't be ignored, and should really be discussed more (whether this is the right place or not) often. So my message to any landlords who are presently going through or have been through this dilemma is this, persevere.

There is light at the end of the tunnel, it's only the speed as to how long it will take you to get there which differs. I've learned a wealth of knowledge during this process and can't even begin to stress how important a good realtor/PM is to have in your corner.

Hope some of you found this useful, feel free to speak openly about your experience(s).

 

It can be really stressful, especially when the law seems to favour the tenant so dramatically.

Even getting rid of all their crap once they've moved out can be a nightmare. I agree, a good PM is worth their weight in gold.

I tell you what though - having a decent cash buffer makes the whole process MUCH easier to persist through. I can't imagine having a disastrous tenant AND financial difficulty.

 

I think is part isn't optional, if you're an investor you have to be very calculated with your funds and provide yourself with security at all times. Thankfully I'm in a position right now to keep my expenses low, going forward it's an objective to avoid this scenario at all costs!

 

Having been through this on one of my personal properties I completely emphasize with what you mean on the emotional and mental cost of the situation.

It highlights the importance of having a property manager - provides a 3rd party who is unattached to the situation and can systematically work through the procedures involved.

Thankfully it doesn't come up too often - majority of tenants do the right thing. Occasionally some will lose their job or relationship and then things spiral downwards in their lives from there.

Had one recently where the tenant stopped paying early on, was only 4-6 weeks into their lease. Had them evicted, the unit cleaned up and a new tenant moved in. The owner has referred me to more landlords since then - saying he obviously preferred to have not to have happened, but is glad that we were on the case to resolve it.

 

I read through your old thread, you have got possession order in Feb, but you are saying: "n the 12/04 it will have been 4 months since the existing tenants stopped paying, to where we are at now", you still have not evicated that tenant out?

 

12/12/17- Payments stop
31/01/- VCAT 1
12/02- Eviction date
05/03- Evicted
04/04- VCAT 2 (for compensation).

Really relying on insurance now because we're going to get $0 from the tenants.

Screen your tenants carefully people! Will be switching real estate ASAP.

 

Hi, you got eviction order on 12/02, but you evicted tenants out on 05/03, it took 3 weeks, why it took so long? Does VCAT order say 3 weeks?

From 05/03 to 04/04, you apply for VCAT 2, does your premise vacant? I know EBM cover vacancy period due to previous tenant damage which result in premise could not lease out, you may cross check that.

Sometimes for landlord, it is very hard to know who is tenants, application form could not show to landlord due to privacy act. my case is even worse, agent deceived me to sign this tenant and they did not do background check..When I asked for application and background check document, they pushed me back saying privacy act.

 

Police booking and weekend extension so they would pack their belongings..

Correct, vacant and yes I'm covered for the period, thus EBM want to process this claim ASAP and re-tenant.

The moral of the story here is to hire good Property Managers, do your research and check references.

 

Yes, good PM is very important. I am willing to pay more commision fee to good PM as long as they are competent.

 

What is the minimum amount of time between someone ceasing to pay rent, and getting them evicted? Also, do you keep their bond (or the part of it that's owing in rent)?

 

14 days results is immediate eviction, or at least a court date. You can only keep the bond for the owing if the judge awards it to you.

 

21 days. if they fall behind rent 21 days, there is high chance they can be evicted.

 

It varies per state and starts with a breach notice, eg WA can begin 1 day after rent due. About 2 weeks in some states , 15 days here in SA as per my tutorial to other property managers here

Breach notices here have 7 days to remedy and is 7-14 in most states.

If not remedied, can book a tribunal hearing. How long this takes will vary per state and how booked out they are, i think the average here is 3 weeks to get a hearing slot.

At the hearing a big variety of outcomes can occur. The Tribunal Member could offer a payment plan to help tenant catch up on rent (and process starts from scratch) or evict - have had 7 - 21 days notice before depending on the circumstances.

So add all that up for your answer

 

Thanks DT - As someone mentioned in an earlier post, if they fall behind but catch up eventually, although not ideal, it's still a better outcome than having to go through all that and lose a fair bit of income...

 

agree the process to get rid of tenants who are non paying or destructive or dirty or a combination of all 3 is time consuming and costly.
as a private landlord and not a charity, we cannot provide the care and supervision many of these people need to meet their responsibilities. we pay the price of their lifestyle choices until they can be removed.

 

Prevention is better than the cure. Have a well maintained appropriately priced property and the odds are in your favour.

I've seen the correlation when having a poorly maintained house or trying to ask top dollar. You see, good quality tenants can get accepted into properties easily, so its the lesser quality ones often leftover who have to settle for over priced or poorly maintained properties.