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Brown & Brown e-Newsletter
by Garth Brown

Do you know who your tenants are?

I received this interesting email from one of my Clients outlining a very ugly experience he had with his rental property, it is a very good lesson for ALL Landlords.

Hi Garth,
A deposit has been taken on my property and a good sale price has been secured, Garth please proceed with the exchange of contracts and subsequent paperwork.

I wanted to give you an outline of my experience with tenants who flaunt the rules and in my opinion are protected from being liable for losses incurred by landlords. As you are aware I, for a number of years, had a good relationship with the original tenant for this property and I had kept the rent very much below market price in order to assist this tenant with the unfortunate circumstances he found himself in.

Here are the facts: A long term tenant was reluctant to re-new his lease after his wife was transferred to a nursing home and I decided to keep a month-by-month verbal agreement in place.
• WITHOUT my knowledge the tenants daughter and son-in-law moved in and taking advantage of the circumstances, made it untenable for the frail old man who then moved in with his sister.
• When I spoke to the daughter she proclaimed that Dad was sick and they couldnít look after him properly, so Dads sister had volunteered. She wanted to keep paying the rent in the hope her father would return to the property once his health improved.
• These unscrupulous people began to breed birds in the backyard, virtually turning the place into an aviary.
• Rubbish including empty bottles and beer cans was pilling-up making the property more like a rubbish tip than a suburban backyard.
• By the time I was made aware of the condition of the house, I had already received a notice from my supportive, friendly local council, to clean-up or face a fine.
• I rang council and explained the circumstances and requested them to re-direct the notice to the tenants who were responsible for the mess. This took almost three months and by this time, the rent was in arrears by $2,300.00.
• I applied to the tribunal, for an immediate eviction, the interior and exterior now looked like a dump
• My day at the tribunal finally arrives with me seeking damages and eviction of the current tenants, there was no lease in place with them or with the Father.
• The offending tenants did not show up and the tribunal officer was quick to grant the eviction but brushed aside damages with the attitude, well they probably have no money to make good the damages caused.
• To add insult to injury, the council sends me another notice to clean-up or face a fine, again! Amazing! The story ends with $15,000.00 and plenty of un-paid man hours needed to renovate the house and put in for sale, which to my delight, has been achieved.

Garth, the moral of the story, landlords beware! And know that you will ultimately pay heavily for having bad tenants who will be protected by all the relevant authorities because they are the protected species; Well you just keep losing. Good night and Good luck.
Regards, Ron

LANDLORDS BEWARE! Some very important issues Landlords need to be aware of:

When someone is renting your property you lose control as a Landlord; an old legal term: "possession is nine tenths of the Law". Renting a property is about:
a. Managing the risk of a bad tenant.
b. The Tenant paying the rent on time and looking after the property.
c. The Landlord keeping a check on their property within the guidelines set down in The Residential Tenancies Act 1987.

Here are some ways to help cover these bases and your investment.

LANDLORDS CHECKLIST:
1. LANDLORD INSURANCE: This is very important; it covers loss of rent and damage by the Tenant, beware of the excess and the limit of damage the insurer will pay for; it only takes one bad tenant out of ten good tenants to reach the stage of a Vendor saying, ëlet's sell the home and put the money into superannuationî
2. LANDLORD INSPECTIONS: it is very important to hold regular inspections of your tenanted property. The Residential Tenancies Act 1987 allows for four of inspections per year; and its important that you take full advantage of this opportunity to handle issues immediately.
3. ENSURE YOU KNOW WHO IS LIVING AT YOUR PROPERTY: Often more people are living in the residence than your lease allows; itís up to you and the Agent to keep a tight reign on who is there and enforce your rights earlier than later if you have evidence that the lease has been violated.
4. LEASE RENEWAL: itís generally a good idea to renew the LEASE with your existing tenants to ensure they are aware of their obligations and to keep them on the ball. Some Landlords I know are employing the practice with so much competition for rental properties to charge 3 months in advance, this can help to minimise the risk of a bad Tenant.
5. AGENT: If you have a Real Estate Agent handling your rental property keep in regular contact with them and get to know the Property Manager, show you are interested in your property and they will be more diligent in looking after it for you. Often Landlords give their property to an Agent to manage and they donít keep in touch and if problems arise it can be some time before any real action is taken.
6. LANDLORD MANAGEMENT: If a Landlord manages the tenancy without a Real Estate Agent they must be aware of The Residential Tenancies Act 1987 and all the legalities that go along with it. They must carry out their legal obligations in a formal manner e.g. Every three months the Landlord can inspect the property provided adequate notice is tendered to the Tenant; if the rent is more than two weeks behind an eviction notice can be tendered, Notices need to be hand delivered to the Tenant to be served properly according to The Residential Tenancies Act 1987 and advice from the Office of Fair Trading - renting services.
7. RENTAL BOND: Make sure your Real Estate Agent or yourself (if self-managed) charge the appropriate bond, usually 4 weeks rent.
8. RENT IS PAID IN ADVANCE.
9. RENT IS AUTOMATICALLY DEDUCTED FROM THE TENANTS BANK ACCOUNT VIA DIRECT DEBIT.

Thank you for all your referrals and keep them coming through!

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