Claiming a Bond from Tenants Who Have Damaged Property We Just Purchased

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  tomsco on 27/07/2016 - 16:44

  +4

  Don't take this as fact (hopefully someone can correct me), but I'd say with the timing you are quite unlucky.

  I doubt you would be able to claim the bond as you are not officially the landlord.

  I would say you would be pursuing the vendor saying the carpet was not in that condition when you purchased.

  Hopefully the vendor will do the right thing and dispute the bond and pass the funds to you in settlement, otherwise you will have a lot of stress come settlement.

  • 

    Sex on 27/07/2016 - 17:00

    Ok, I was afraid this may have been the case. I thought because we purchased it as 'subject to existing tenancy' as opposed to 'vacant possession', it meant that at the time of purchase, the tenants were ours.

• 

  John on 27/07/2016 - 16:46

  +2

  Did they use a property manager? There should be a condition report that detailed the condition of the property before the tenant moves in.. and also a contract to go along with it that covers tenant responsibility if the condition is not the same due to failure to maintain care of duty. If there is one then they are fully responsible to cover all cost to repair/clean.

  If not.. then you're out of luck.

  • 

    Sex on 27/07/2016 - 17:04

    Yes, as far as I know there was a rental contract (hence the bond). I'm just confused whether we are the ones who get to claim.

    • 

      trongy on 27/07/2016 - 22:37

      +2

      You don't own the place yet so they were not your tenants and you have no claim against them. The current owners may have a claim against their tenants, but legally that's no concern of yours.

      Your dispute is with the seller - if the property has been damaged since you signed the contract then it all depends on the wording of the contract. Normally the contract is an agreement to purchase the property in the condition it was at the time of signing the contract. This is why you have a final inspection before settlement - to ensure the condition hasn't changed substantially during the settlement period. I suggest you have your lawyer to check the contract and negotiate on your behalf.

      In my case a pipe leaked and caused water damage during the settlement period, which the seller had repaired before the settlement date.

      In your case time is tight so a better outcome might be to get a quote for the value of the damage and have the settlement price reduced by the cost of repair. You need to move fast - before settlement you have leverage to negotiate i.e.you may have legal grounds to back out of the contract and the seller will really want the sale to go through. Think about it from the seller's perspective, if you were to back out of the contract, they would have to have the place fixed up and put it back on the market again which will cost them more money and time. You can be sure their estate agent wants their commission ASAP and will advise them to give you what you want to ensure the sale goes through smoothly.

      However once you have settled it's probably next to impossible to get your money back. This is definitely a case where you want a real lawyer not internet lawyers advising you.

• 

  cst on 27/07/2016 - 16:48

  +2

  I think it may depend on what State you live in. I am in Victoria where the tenant has to give written permission to give over their bond to the owner, or you take them to VCAT.

  • 

    Sex on 27/07/2016 - 17:01

    +2

    The property is in Sydney, so I'll research what the equivalent body is. Thanks!

• 

  voiletmay on 27/07/2016 - 16:49

  +1

  Good grief, that is just awful. I'm so sorry.

  Not sure if your home insurance can help, I guess would depend on if the insurance the moment you took possession. We recently got new carpets from our house insurance because my husband dragged a new sofa across the floor and it ripped a 1 metre hole in the carpet. So insurance is another avenue you can try if the bond doesn't work out.

  • 

    Sex on 27/07/2016 - 17:02

    Thanks Voiletmay. I haven't purchased contents insurance yet (it is a unit), but intend to do so. However, since this is an existing problem I doubt it'll be covered unfortunately.

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  whooah1979 on 27/07/2016 - 18:46

  +2

  The tenants burned strong incense in the bedroom and there is a big burn stain (about 70cm squared) in the carpet.

  did this happen after both parties signed the contract?

  On top of this, the entire apartment reeks strongly of this incense.

  did you not notice this at the time of the open house or any of the inspections before signing the contract?

• 

  ms_caz on 27/07/2016 - 19:40

  +2

  In my experience with tenancy matters, it will just be noted as fair wear and tear and you will be unlikely to be eligible for any portion of the bond, regardless of whether it is you or the vendor who is eligible to apply for it. In order for bond monies to be awarded by VCAT (or the relevant body in your state) damages must be deemed to be malicious - as in deliberate, intended to cause disrepair.

  We had urine soaked and flea ridden carpets from tenants allowing their dog inside (and not letting it outside to pee) - considered fair wear and tear not malicious damage, regardless of the fact that the house was uninhabitable and we needed to replace the whole lot. Many other factors we considered damage were also dismissed as fair wear and tear, eg walls drawn all over with crayons, chewing gum mashed into the carpets, curtains and blinds ripped from their rods and tracks, and a door swinging on one hinge. All done under a tenancy agreement, with a bond, all ending up as our out of pocket expenses.

  In my opinion, I would probably approach the vendor about the property not being in the condition you thought it was in and possibly try to negotiate some compensation on the purchase price to cover the cost of the carpet. I doubt that will be successful if the tenants came with the property as part of the deal. I would still approach the agent about taking them to VCAT (or your CAT) and keep your fingers crossed that your sitting member agrees that it is in fact malicious damage, but do be ready to put your hands in your pocket in order to pay for a repair for the carpet section (or just a rug to put over it, in the short term!) In terms of the incense - I think you will have to get a professional cleaner to have all the soft furnishings eg curtains and carpets cleaned, and a good thorough cleaning of walls and other services eg sugar soap etc. That and a bit of airing and your preferred fragrances would be the only solution.

  Good luck with it. Thank your lucky stars that the tenants have not gone to town on the joint - and that they actually move out when required to do so, with minimum fuss. Really a carpet burn and incense are nothing in terms of what COULD happen.

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  ozbargainoid on 27/07/2016 - 20:37

  -1

  Check your contract of sale.
  A lot of vendors put in a clause 'as is where is' on the day of settlement (I do) so there are no unresolved issues.
  If this is the case for you….sorry, but tough luck, your stuck.

• 

  Euphemistic on 27/07/2016 - 20:39

  +2

  It comes down to the final inspection. If it isn't in the same condition as when you signed the contract then surely it is up to the vendor to rectify, or compensate you. In that case it would be up to them to take that money rpfrom the bond for the repairs, probably then hand it over to you. The vendor was the landlord. You will settle as vacant possession as the tenants have already left.

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  fruit on 27/07/2016 - 21:29

  +1

  The tenants burned strong incense in the bedroom and there is a big burn stain (about 70cm squared) in the carpet.

  I wonder if they are related?