What to Do When Landlord Loss More than 2 Months in Rent Because VCAT Hearing Take More than 2 Months

In the past when a tenant is 14 days in rent arrear landlord can send a notice to vacate and a few weeks after that you put the VCAT application and a few weeks after that you get a hearing and get either a payment plan or possess order. But earlier April I had an application and the hearing date is two months after my application plus one month rent owing before the application, so tenant owes three months rent before landlord get a hearing and bond can not be more than one month, and if a landlord is lucky to get possession order which is not guaranteed, landlord still will be more than two months rent out of pocket. All these time tenant is not paying anything.

I used to think landlord insurance is not necessary but now I think maybe I have to buy landlord insurance. Do you have any other advice.

Comments

  • +7 votes

    Like all investments it comes with risk. In this case you take out insurance as a landlord or you absorb it.

    •  

      Ten years ago hearing only take 2-3 weeks to get listed and now my risk has substantial increase without inform me. I am assess whether it is still worth to hold it
      Its fair enough government is heavily regulating the renting market but I dont think its fair that regulation put landlord in such a vulnerable position

      •  

        without inform me

        You expect VCAT to give you running updates of their timeframes?

        •  

          I am simply responding to the first post of investment risk. The investment risk is very different when I first invested in.

          • +8 votes

            @jowu15: As you are the investor, it's up to you to make sure you reassess the risks associated with your investment on a regular basis, including the value of landlord's insurance. As you mentioned elsewhere, you haven't assessed the value of this insurance for a decade, so this squarely falls into the "your fault and your responsibility" area.

        •  

          Sounds like you're not performing regular due diligence on your investment.

    • +1 vote

      Government mandated risk.

      •  

        I think a good system should works on its own merits not depends on insurance to make up loss, like property investment should not depend on negative gearing to make up loss in investment. Insurance should be last resort not default option.

  • +11 votes

    You rent out without landlord insurance? What if they completely trash or burn down the place?

    •  

      You sound like a novice. You can't just look at all down risk. What if nothing happens over 10 years and you own multiple properties? How much money have you saved by self-insuring?

      •  

        Over ten years? Maybe $3-4K. Landlord insurance isn’t too expensive.

        •  

          No your assumption is not right, I just went to Terri Scheer website and insurance amount varies $280-$758pa depends on the area, so for 10 years would be arrange from $2800—$7580 and thats not including excess, which could easily in excess of $1000(excess has three parts).

      •  

        @ihbh you sound like a fool. Let me guess, you don't have car insurance either?

        •  

          Nope, successful multi-investment property owner over 2+ decades.

          Have car insurance and obviously building insurance on all of them.

  • -3 votes

    No I do not have an landlord insurance but its an apartment so owner corporation has building and public liability insurance. I researched landlord insurance its has very limited liabilities. Yes its time to rethink of landlord insurance. I wonder how many landlord buys landlord insurance

    • +8 votes

      I bet you have no idea what building and public liability insurance covers.

      Hint - next to nothing inside the actual apartment.

      • -3 votes

        I have been in property management and development for 20 years. I know building and public liability insurance. I assess the landlord insurance more than 10 years ago and decided not to take it but I am reassess it now.

        • +1 vote

          I'm curious about what happens if someone trashes the interior of your rental. Does your building or public liability insurance cover that?

          •  

            @one man clan: Yes it has happened a few times before and we did handymen job ourself and only used electrician and plumber who we use regularly so they gave us a very reasonable price, thats why it works out better than if we pay for insurance on average on the long term, that is until now

            •  

              @jowu15: translation:

              "It's happened before so we went to Bunnings, bought the cheapest paint and did a botch job."

              "Anything electrical or plumbing we paid a mate cash to fix. CES not required."

              •  

                @zeggie: Yes I go to Bunnings often, for paint I look at what is on special and also tinted paint first, I am looking for value. I mostly buy good quality one, so I do not have to printed every time I change tenant. I always buy Lockwood lock.
                For plumbing and electrical jobs we go by the regulation and get all the paperwork its required.

            •  

              @jowu15: So in this case you took a risk and it hasn't paid off.

              What are you complaining about.

              Edit: I am a landlord too and have been screwed over by insurance companies some their fault, some my fault

              E.g. once i forgot to renew and had to do a claim, obviously not happy, but its my fault. Move on

        • +1 vote

          I assess the landlord insurance more than 10 years ago and decided not to take it but I am reassess it now

          10 years between assessing your business risks? I have no words.

        • +1 vote

          You've been in property management and development for 20 years but didn't know what landlords insurance covers!?!?!

          Oxymoron of 2019

  • +4 votes

    Thew new Uninsured car posts of OzBargain - now Uninsured Landlords posts. Rubbing my hands with glee.

  •  

    Most landlord's insurance will cover loss rent (or rent not paid) as long as the landlord or their agent did not cause undue delay. So if you/your agent issued a NOT after the rent not being paid and then applied to the Tribunal in reasonable time, you will have no issue getting your insurance to cover your entire lost rent (and costs with the tribunal and administrative process).

    •  

      You'll actually find this is usually an optional cover, with extra charge, from most insurers. It's what most people likely want from a policy but a lot don't even read what their policy actually covers.

      •  

        Thanks for the heads up re: loss of rent cover may not be included in some policies

        For the past 13 years I have only used Terri Scheer Insurance (they say they are australia's leading landlord insurer?) and their policies have it automatically included so guess I have been blind to the fact it may be optional for other insurers.

      •  

        Why anyone buy landlord insurance without cover of rent loss? Loss of rent and property damage are the main loss a landlord can suffer

        •  

          Because a lot of people don't read their policies nor the fine print and just buy the cheapest. Insurance companies love suckers.

          Irony is you don't have any insurance cover at all.

  •  

    OMG poor old landlord…..it's a pain but that's the risk you take. Sounds like you have more than one investment property as well….

    • -2 votes

      What are you trying to say? Just because someone have more than one investment property, you think they do not deserve a fair go!!!
      I pay a lot in tax: land tax, stamp duty, council rates, income tax, gst on and on and you know what I get next to nothing back, except government spending on public utilities. When I am retire, I will not get a pension, so reduce the burden on young people.

      • +1 vote

        Yes you do but you will have a great accountant and claim it all back…… and pay no tax……hmmm

  • +1 vote

    I have always said that ALL the RISKS and ALL the LOSSES sit with the landlord.
    NOT the tenant.
    The landlord has everything to lose.
    The tenant nothing really.

    Its about time the laws reflected this and started protecting the landlord.

    • -1 vote

      Yes quite often landlords are in a guaranteed situation to loss out. Given the law as it, sometimesI felt I am at the mercy of my tenants, hoping they are not damage the property and pay rent and be fair, but not many of them are. Even one get VCAT order for compensation from tenants, which I had orders from VCAT for compensation many times, but that is really not worth the paper its written on. Once Tenants moved they think that is the end of their responsibility.

      For law to reflect the landlord predicament, landlords have to work together, like Tenant Union, but landlords have to work hard to make up the shortful between rent and mortgage. Even REIV is a real estate agent association, not a landlord association.

  • +1 vote

    Ooof yep you'd be 2 months out of pocket (net of bond) by the hearing date, then even if all goes well and you get your possession order, tenant might pour a bag of cement down your toilets on their way out. It could always be worse. Houses are a shit investment - and this is coming from a guy who owns several. I'm not selling any but definitely not buying more. ETFs all the way from now on.

  •  

    Well it’s good that you’re reassessing the need for landlord insurance now… but I’m sure you’re aware, that even if you buy landlord insurance now, most likely you won’t be able to claim for an existing event, that is the rent owed by your current tenant.

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