True Story - Even Good Tenants Can Go Bad

I read your lengthy post and was wondering when exactly the bad part was coming.

I'm still waiting.

If you've been in the game for 25 years (how many properties, I wonder? One?) then congratulations on this being your biggest problem thus far, but if you really are a reader of Property Chat then you would know that your experience is hardly what most would call "bad" and there is absolutely no need to resort to put downs and condescension.

 

Wait no longer. Bad is a relative thing. For me, to lose $100 is bad; for others, they can lose thousands and they are OK with it. Woolworths, BHP, etc lose billions and people seem OK with that. Yep, it is relative.

If I didn't know better, I could have taken that paragraph was a put down and condescending. I am sure you didn't mean it that way. I trust you can be just as gracious about my posts.

Please don't take the above paragragh as a put down or condescending.

 

Here is an @kierank intro, if people care to read.

My First Post Here - Hello

What started with a simple post to sharing simple info, end up so much drama....

Personally, I don't think I would acted any different to kierank's instructions to his PM in his initial post. He shared his side of story, some people reacted 'is this a first world problem'?

Looking at where kierank's properties are located, he may experienced less tenant issues for him in his last 20+ years owning the properties , and this one tops it for him and want's to share

 

Wondering about your level of experience given your opinion on what constitutes a bad tenant is not condescending.

These, on the other hand, are:

Anyway. Good luck to you, may you get the tenant you deserve

 

If I didn't know better, I could take that post as not very gracious.

 

@RetireRich101 thanks for posting that, I haven't read that before. Great intro, kierank is clearly not new at this, and kudos for doing so well.

 

I believe people should be sceptical of what they read on PC. I started this thread as a genuine attempt to share my real world experience. It is a pity that some took it off topic.

I am glad you read my intro. I was open, honest and trying to make a real contribution to this community. I attempt to do this with all my post. I put a lot of weight on personal integrity; hopefully that comes through my posts.

I can see from your post above that you can be gracious. I thank you for that.

 

Let's get this thread back on track

My PM would have most likely done something similar, but added words to the effect of, "let me speak to landlord", mainly to help calm the tenant down.

I would then formulate a plan with the PM to allow them to break the lease, which would include the tenant:
1. Making the place as presentable as possible (cut grass, clean house, etc)
2. Allow as much access as possible and help the tenant understand that the sooner we can get a new tenant in, the quicker they move out / minimise their breakcosts.

This has worked well for me over the last few years. PM usually pulls this off quite well if and when it does occur.

I had a tenant who was staying on month to month who gave me notice to move out during the Xmas period. I wasn't happy about it (due to it being the quiet xmas period), but they were nice about giving access (more than what's expected - pretty much daily at any time where required). Anyway, their new landlord stuffed them around and rescinded on the lease 2 days before they were due to move in and they asked if they could stay, it was a win / win so i said yes.

My request to them was that if they stayed, I would like them stay until spring (i say would because there's no way I can actually enforce that without a lease), i didn't t even make them sign a new lease as i knew they wanted to move to a place that was more convenient for childcare drop off. For me if someone wants to go, why stop them, it only hurts everyone involved. Tenant held up their side and gave ample notice in Sept - result, i had 1 week gap in rent.

Even if the tenant had signed up on a 12 month lease, my actions would have been the same. Life can be good, but it can also throw some messed up curved balls and sometimes people just need a lifeline or to know that they aren't alone and others understand their situation and are willing to lend a helping hand - that sometimes is enough to change their tone and create a win/win situation for all.

 

With my recent experience, I like the idea of getting an official ruling from the tribunal, even if they have agreed to, and are sticking to, a repayment plan.

But what sort of out-of-pocket are you expecting/realising with this? Is it the lease-break fees?

Cheers,
Inertia.

 

Surely as a Landlord we cannot possibly know these things? There could be all sorts of issues going on, and if that is the case, then we should trust the tribunal to evaluate the information we do not have access to and make a decision?

I would have thought the best scenario would be to negotiate a result with a tenant (in whatever scenario), and either take that to the tribunal to get ratified, or if you cannot come to an agreement, both sides present your situation and have the tribunal evaluate them on their merits.

Is this unreasonable?

I am inexperienced in these things, but our current tenants who seemed awesome (even asked permission to lay new turf when they moved in???) failed to pay rent for a month, then didn't stick to the repayment play they had agreed to. If we had gone to tribunal with an agreed plan, we would have been in a stronger position for enforcement/insurance claim/action...

Cheers,
Inertia.

 

@kierank I understand where your coming from to some extent. This is kind of deja vu, just went through a somewhat similar situation, though not exactly the same not many months ago.

I had a tenant break a lease. There was 3 months remaining and they basically said that their 'life situation' has changed and they can't afford it anymore and need to move to a cheaper place, in 3 days time and requested me to give back their bond out of 'being a good human'. I'm thinking wtf.

I told them if they can at least let me find a new tenant before they move out, then I will let them break the lease and I will return the bond no problem. They refused AND said that they are going to go to the tribunal to get their bond back if I refuse to return it. I said in that case please go ahead (actually I used slightly more colourful language), I kept the complete bond, they moved out. I found new tenants.

Never heard from the tribunal though. I never thought it was worth the time and effort myself to take them to tribunal either.

I am all for being sympathetic to tenants and acting in a fair manner. All I ask is that tenants treat me with the same consideration.

Hope it works out for you mate.

 

Well said Leo.

 

A quick update on this:

1. Our PM organised someone to do the bond clean, tidy up the garden, remove the previous tenant's possession left behind, etc.
2. We have found new tenants and they moved in yesterday. So the property was only vacant for about 10 days.
3. We don't have all the break lease costs in as yet but it looks like the bond refund will be $100 to $150 short.
4. Our PM has updated the previous tenant with the above and suggested that the tenant assigns the bond refund to us and we claim the shortfall on our insurance.
5. The previous tenant didn't/wouldn't agree to this.
6. Our PM and I can only assume she really wants to go to QCAT to get a hardship ruling. She must be expecting QCAT to rule that she gets her bond back.
7. Either way we will be claiming the finalised shortfall on our insurance - so no out-of-pocket for us.

I will give a further update after the QCAT hearing on 29th March.

 

That's exactly how it should work. Lease break charges are not a punishment on the tenant, they are part of the property management process.

Property investing is a business not a charity. Banks don't consider your personal circumstances before applying charges they are entitled to.
Keep business as business.

 

You were within your rights to proceed the way you did, it wouldn't have been my choice though.

Yes property investing is a business, but there is also a human side. I sleep comfortably knowing that I treat other people the way I would like to be treated. If that means I make $100 less on my investments, so be it. I might never be rich, but I'm ok with that.

If it was an initial lease and the person changed their mind I would seek out of pocket expenses. But where someone had been a good tenant for a number of years and needed to break lease before it even started, i would wish them well and advertise ASAP.

 

I had a tenant leave at short notice mid last year about 2 months before the lease ended. The tenant had been a really good long term tenant and I didn't pursue further. There had been issues with showers needing retiling and they had put up with lots of disruption earlier in the year as a result. Sometimes it's give and take.

 

I know I am within my rights (I am not a criminal) but it is more than just about rights. It is about personal maturity/responsibility, it is about legal obligations, it is about business processes ...

I believe I have made the right decision; if you think different, I am OK with that.

So what if you make a $200 loss? What if you make a $2,000 loss? $20,000 loss? $200,000 loss ... Do you have a different process depending on the size of the loss? I don't - I have the same process.

I am not rich either. I leave that to Donald Trump, Clive Palmer, etc.

Well, I like to keep things simple. If a tenant breaks a lease (it doesn't matter whether it is the 1st lease or the 51st lease) and I am going to incur break lease costs (it doesn't matter whether it is $100 loss or a $10,000 loss), I follow the same process and I expect my PMs to do likewise. Otherwise, in my opinion, one ends up with confusion, misunderstandings, chaos, drama, high emotion, ...

Your processes are different to mine; I am OK with that.

 

We are all different. I prefer a case by case assessment.

Sometimes the cut losses approach eliminates that drama you have mentioned.

 

That is one of the many things I love about this world we live in.

There was no drama from my side. My PM and I are following a process which we both agreed to.

I just don't have time to follow a different process for each case. Makes the world too complicated IMHO.