Tenant Has Trashed The Property, What Are My Options?

webtonmoy on 21/05/2022 - 11:21
Last edited 21/05/2022 - 11:23

I had the misfortune of renting to a couple who has caused a lot of trouble. Here are the issues

1. Unpaid rent: About 11 weeks of unpaid rent. I was a bit lenient as they said they just had a baby. They made excuses for months with occasional payments and accumulated 6 weeks of rent. At that point they refused to pay. Husband said he is not living there anymore, so he won't pay. Wife said she has given money to the husband and she can't pay anymore as she is not working. I gave 2 weeks notice to vacate the property, they took another 2 weeks making excuses before handing over the keys. They released the bond that covered 4 weeks of rent, so 7 weeks of unpaid rent now.

2. Things left behind: They have not taken everything out of the property. Lots of small items + a mattress, dressing table, a large trailer, 2 large tables, chairs, bbq machine, lots of construction items, and many other items. I proposed to dispose the items, they denied. I gave 2 weeks of notice as per the law required. They scheduled times to pick up the items, and so far did not came (made more excuses).

3. Damages: They installed a laundry machine, which leaked. Instead of fixing it or letting me know, they kept as it is. Wife's excuse is that the husband promised to fix it. Now it has caused moulds in all the walls and skirting of the laundry place and its door. I don't know how much it will cost to repair this.

They removed the carpet in the large storage shed without asking me. The carpet was not in the best shape, but now it has been kept outside for god knows how long, so it is unusable now.

They had a cat without permission. And chickens in the backyard (without permission). They left chicken poops all over the backyard deck.

4. Unkept premise: They never cut the grass in the backyard and part of the front yard. It is about my waist high and I am cutting it for the past two days.

My Options:

Insurance: I have landlord insurance for damage, but not for rental loss. The excess amount is 3000$, so not worth it, I guess.

VCAT: It probably will take few thousands of dollars to bring the property to a liveable state. I plan to take them to VCAT to recover my loss. I don't know how much I can recover, so I am planning to do the works myself as much as possible. This is causing a lot of stress to me. Can I claim my own hours of work and seek compensation in VCAT?

This is a new situation to me. Can anyone please share their opinion or experience is related matters? Do you think VCAT really is helpful in such situation? What happens if the tenant refuse/unable to pay in VCAT?

This is a house I used to live and renovated it, only moved out due to change of job location. What makes me sad is that for me this is my house, where they took it as a temporary shelter and moved on, and took advantages of my good gestures.

Home & Garden

Comments

  • newbiesh on 21/05/2022 - 23:43
    +1

    hey i had similar issue take them to court then magisc court then get debt collector on them they WILL pay

    • JimB on 23/05/2022 - 08:44

      Will pay?

      May pay is more likely.

      Most tenants who trash a property like this and don’t pay know that the a debt collector can’t get blood from a stone. They know the system

      • newbiesh on 23/05/2022 - 09:38

        mine did but i made them fed up with it.

        • JimB on 23/05/2022 - 09:39

          That's because they have assets.

          I'll let my insurer deal with the hassles.

          • newbiesh on 23/05/2022 - 09:41

            @JimB: insurer didnt cover mine, to OP take them to court multiple times and use multiple debt collector (they dont charge until tenant pays)

            • JimB on 23/05/2022 - 10:02

              @newbiesh: Why didn't your insurer cover it?

              • newbiesh on 23/05/2022 - 10:08

                @JimB: issue was blocked pipe, tenant lived there there for 2 years and when we had a plumper he found tampons which tenant said wasn't theirs etc. insurer said because the pipe was outside of the house some random excuse…

  • niknah on 22/05/2022 - 00:37

    Sounds like they may not have much money, you could be in the queue with whomever else they owe money to.
    I had a similar thing happen too, but the insurance paid for most of it(Terri Scheer). Fortunately, I only have a small place. Cleaned most of it myself. Put up an ad on airtasker and someone came over to pick up the trash on the same day.

  • redslert on 22/05/2022 - 03:10
    +2

    They are not going to show up for the VCAT hearing.

  • DiscoJango on 22/05/2022 - 07:48
    +1

    And these two degenerates of society have decided to reproduce.

    I wonder how that kid will turn out…

    • webtonmoy on 22/05/2022 - 21:03

      I wish the kid will be safe.

  • MontyMacaw on 22/05/2022 - 08:13
    +1

    There is a reason property managers are hated. They are better at it than owners - with some exceptions.

  • [Deactivated] on 22/05/2022 - 08:19
    +1

    Seems to me the repairs costs more than 3000, so insurance claim for me. The rubbish itself would have been 3000 it sounds like.

    Are you sure rental loss not covered? Strange…

    I don't think the next premium will increase, it's not car insurance.

  • rowenaduncan on 22/05/2022 - 08:52

    I don't understand why people are saying "rental loss cover". My landlords insurance only covers rental loss if the house is uninhabitable (IE. fire, flood, damage). Is there such a thing as cover for rental loss from unpaid rent by shitty tenants?

    • Quantumcat on 22/05/2022 - 11:51
      +1

      Yeah, my insurance covers that. It makes sense to offer it as the insurance company can later go after the renters to get themselves paid back

      • rowenaduncan on 22/05/2022 - 12:25
        +1

        Is it called anything in particular? I don't think my insurance offers it. Maybe it is something I have to specify by name? Might call them Monday…

        • JimB on 23/05/2022 - 08:48

          Rent loss or default cover.

          Each insurer may have their own name but the above is sufficient.

          Some insurers stopped offering it during the Covid pandemic.

          Some insurers require you to have a property manager appointed in order to claim.

      • leiiv on 22/05/2022 - 19:56
        +1

        If many people here said that there is zero chance for OP to get the owed rent back, what the insurance can do that OP can't?

        • Quantumcat on 22/05/2022 - 20:23
          +1

          They can get a court order to garnish wages. And they would have lawyers on staff

        • JimB on 23/05/2022 - 08:51

          They will pay the landlord first.

          Whether the insurer can claim from the tenant is not the landlord’s problem.

        • john_conner on 23/05/2022 - 20:43

          Insurance pools risk as a primary function, not act as a debt collector.
          E.g. when a life insurance policy is paid out, the insurance doesn’t “get the money” out of somebody. It takes a portion of the premiums paid by a pool of policy holders and uses that to pay out the policy that claims.

          • leiiv on 24/05/2022 - 00:00
            +1

            @john_conner: I was specifically responding to this statement:

            the insurance company can later go after the renters to get themselves paid back

            Sure, the life insurance works like what you said, but there are other types of insurance that do act as a debt collector. For example, the car insurance will definitely chase after the person at fault.
            What I can't understand is that why insurance company has a greater power in debt collection, legally and non legally, than normal people, such as OP.

            • john_conner on 24/05/2022 - 10:20

              @leiiv: Ahh I see.
              Likely just that they have in house lawyers and relationships with debt collectors so are more organised in these matters!

    • cimrak on 22/05/2022 - 12:47
      +1

      Yes. Source: I have it as part of my landlord insurance.

  • saltypete on 22/05/2022 - 09:15
    +7

    Welcome to the part of investing that is called risk.
    I read it and thought that you must have got some of our tenants from a few years ago.
    Short story - you will have to pay to get your property functional and insurance will wriggle out of most of it.
    Take them to VCAT to give them a record of being bad tenants and to at least get your bond back.
    Make sure you take lots of pictures, keep invoices etc. Claim the losses.

    Don’t get bitter, just get on with life.

    • Vote for Pedro on 22/05/2022 - 10:07
      +9

      This is exactly it. An investment property is just like any business. With running a business comes both positive and negative. Kind of like shrinkage in retail.

      The issue I see most often on OzBargain is for some reason property investors take it personally as if society has wronged them.

      It’s a business. Treat it like one. Bad tenants are just like bad debts for other businesses. Have insurance and factor this cost before you get into property investment.

      • Yola on 24/05/2022 - 17:01

        It's a little different as the OP lived in the house, renovated it, and plans to return. It would be difficult in those circumstances.

        • Vote for Pedro on 24/05/2022 - 17:06

          Why? Use the funds you have allocated for this type of eventuality to restore the property.

          If you haven’t put funds aside for this expected cost of business, then you only have yourself to blame.

          • Yola on 24/05/2022 - 17:11

            @Vote for Pedro: The OP renovated it for his use as he expected to live in the house and not rent it out.

            • Vote for Pedro on 24/05/2022 - 17:21
              +2

              @Yola: But OP did rent it out. You rent a property out to make money and potentially depreciate the renovations. So it is a business and you need to prepare for the cost of doing business.

              I must be missing your point.

              • Yola on 24/05/2022 - 17:27

                @Vote for Pedro: You are correct it is a business but difficult to detach emotions when it started as your own home. I think it is also difficult when it's just an investment property as someone has been extremely disrespectful to you. I am glad I only own properties in relatively poor condition so I do not get affected too much.

                • Vote for Pedro on 24/05/2022 - 19:11

                  @Yola:

                  someone has been extremely disrespectful to you.

                  Karens the world over are disrespectful to businesses. Boot the tenant (just like refusing to serve a disrespectful customer again). Get over it. Move on. It is a cost of doing business.

                  I am glad I only own properties in relatively poor condition so I do not get affected too much.

                  This is irrelevant - unless you run a slum.

    • MontyMacaw on 22/05/2022 - 14:05

      Nailed it

      • moneyhungry on 23/05/2022 - 17:37

        Only when this happens to you, your opinion will change. I see this as vandalism.

    • webtonmoy on 22/05/2022 - 21:08
      +1

      I am sorry that you came to a conclusion knowing nothing about me/why I rent this property. I used to live there and now renting in another place due to job change. I have plans to return to live there in future.

      Also, I have been a renter for many years before when I was a student (and during early career), I am actually grateful for being able to rent a place when I had no capacity to buy one.

  • rave75 on 22/05/2022 - 10:19

    How come you don't get the 4 weeks bond back?

    And no routine inspection?!

    • webtonmoy on 22/05/2022 - 21:08

      I did get the bond back. I had to ask them to live after only few months, hence no inspection before.

  • striker5950 on 22/05/2022 - 10:19
    +2

    do it yourself and move on, even going after them legally is a drain of energy and money with no promised results. its better for your health and mental state to do the work for 1 week of difficulties for your problem to disappear vs few months.

    let it be an expensive lesson to use a good property manager with routine checks and not rent it out yourself.

    • Grish on 22/05/2022 - 11:15

      Why can't the landlord also be a good property manager? In fact it's worth while learning to be one and ditching useless real estate agents.

      We also learnt the hard way being too lenient and giving everyone a "go" back in the day, had one property get half burnt to the ground, but that worked out fine in the end by getting it done ourselves courtesy of insurance payout which covered the job two fold ;)

      Tradies double or triple their quotes when they get a whiff of it being an insurance claim. That can work well for insurance cash settlements, you can then source your own "honest" repair quotes and pocket the change.

      • Quantumcat on 22/05/2022 - 11:54
        +1

        Why can't the landlord also be a good property manager?

        Property managers are across all the relevant laws and know at what point to take action and what action that should be. They have experience having dealt with dozens of tenants and properties before you. They will do a better job than you can unless you are making it your job to have lots of properties and manage them all, and find training about things you need to know.

        • striker5950 on 22/05/2022 - 17:05
          +1

          i meant someone to do regular inspections.
          to ad to my point, i once learned a smart successful real-estate mogul say he used to pay for the troublesome tenants to move out, yes he paid for the god damn movers to help them move out, imagine that. and sometimes he even used to tell em here is 500 cash you leave today. basically he is paying to get rid of them, less headache and faster solution..

  • BargainKen on 22/05/2022 - 10:55
    -2

    Option 5. Bikies.

  • HumbleCat on 22/05/2022 - 12:30
    +5

    You can do the following:

    1. Lodge an application with VCAT for compensation and rental arrears as soon as possible. Put both the husband and wifes name on the application. If they both were on the rental agreement, they will both be on the VCAT application. Else, if you only had a contract with the husband, you cant put the wife's name on the VCAT as you didnt have any agreement with her.

    2. Talk to your insurance provider and see exactly what they might cover. See if its appropriate for you.

    3. You cant get this tenant on the blacklist. After the pandemic, I remember the laws were changed that you couldnt put anyone on it.

    4. You cant proceed to magistrates court without taking this in VCAT. They will refuse to hear your application. Once you win the VCAT case, you will have a number of options. Remember, VCAT rulings are non binding. You cant force them to pay after winning but you can take steps to recover your funds after you win.

    5. You ask a debt collection agency to collect on your behalf. Make sure to get all the stuff repaired and sorted out with the invoices before this step. Debt collectors are very good for amounts above $5000. Some large credit agencies like Equifax have their own collecting agencies. Try to see which debt collector is the best overall.

    6. And also lodge a case in the small claims court. This will allow you to force the tenants to appear and declare income. Their future income will be garnished if you can successfully win in this court.

    7. Get a rental agency to deal with future tenants. A really good one like Ray White etc. Tell them to make sure tenant has source of income etc.

    8. If you choose not to get a rental agency, make sure to get personal information from future tenants before signing contract. Ask them to show you proof of balance, visa (for internationals) and also source of income. You can run their name their credit check agencies for landlords.

    9. In the future, you dont need to tell the tenant the rent is late if its up to 14 days. Just tell them you will lodge notice to vacate at the 15 day mark regardless of circumstance. I remember they can pay and keep doing it up to 6 times a year max before they will have to vacate.

    10. Put into your contract that you will conduct quarterly inspections. Make sure to write that you will give written notice 24 hours ( better to do 2-3 days). You may need to check if the Victorian tenancy laws allow this or bi annual.

    11. Make sure to always take photos. Take photos of room when inspecting, of carpets etc.

    12. Take a deep breath and see this as a learning experience. I will still highly recommend a rental agency. And also see if you can get some form of cheap rental insurance for the future.

    • webtonmoy on 22/05/2022 - 21:11
      +1

      Many thanks for the suggestions, you are spot on.

  • geosta on 22/05/2022 - 13:01
    +3

    You probably need to accept that you're never going to get any more out of these people, so with that accepted, there's two options I think.

    1. Draw a line under this and accept that the money that you've lost is the price you have had to pay to get them out of your life so you can go on with living it without them in it.

    2. Enforce your rights. Take them to VCAT. Then take them the court when they inevitably don't pay. This will no doubt cost you more money, but it will no doubt cause them considerable stress. If you choose this option, know that the money you have lost (and the additional money you're spent) is essentially to teach them a lesson, rather than getting any satisfaction yourself, because you're not going to get any.

    If you have the emotional and financial bandwidth, choose 2. If you don't, choose 1.

    • Yola on 22/05/2022 - 16:32
      +1

      It will also take some time.

    • webtonmoy on 22/05/2022 - 21:12

      Option 2 it is :)

  • filmw on 22/05/2022 - 14:23
    +2

    I had similar headaches before and one thing I vaguely remember is that you can charge storage fee for all their crap left behind.

    Yes legally it's their property and you can not sell or dispose them (which is ridiculous) but I remember you can start charging them for storage and tell them their debt is still going to increase if they don't come and clean them up soon. That could be enough to scare them to come soon hopefully.

    • webtonmoy on 22/05/2022 - 21:13

      As per consumer affairs, I can dispose or sell off after 14 days of notice. If sell, I have to return the money to them though.

  • Zondor on 22/05/2022 - 17:37

    Yep, it's gona be a loss type situation with this one mate.

    My rents have a 2 bedroom place in cairns, there was supposed to be a family of 3 moving in. When they came for inspection the place was trashed and there were 12 beds in the house.

    All the blinds had to be replaced, walls re-painted, carpets replaced.
    Cant get money out of tenants that they don't have.

  • trapper on 22/05/2022 - 18:46
    +3

    Your time isn't tax deductible, I wouldn't do any of this work myself.

    Claim insurance and get it all fixed up professionally.

    Also going forward either get an agent, or start taking the management side of land-lording seriously.

  • trapper on 22/05/2022 - 18:53
    +1

    Sell all their junk. Just claim you had a verbal agreement for it to go towards the debts.

    This is a 'civil matter' and the police will not be interested :D

  • kzrocky on 22/05/2022 - 20:27
    +1

    Ill have the trailer, whats the address?

    • webtonmoy on 22/05/2022 - 21:14

      Haha, I will put everything on the front to get collected by anyone who needs it after 12 days. Keep an eye on your facebook marketplace for a free trailer :P

  • ribze1 on 22/05/2022 - 21:19
    +1

    Shares > investment property.

  • Piranha2004 on 22/05/2022 - 22:06

    Looks like you skimped out on insurance and are now paying the price? ANy half deceent landlords insurance covers all these issues.

  • kiitos on 23/05/2022 - 09:00

    Do you have a new tenant lined up?

  • jakeau on 23/05/2022 - 09:27

    Poor baby being born to such rabble.

  • netsurfer on 23/05/2022 - 10:42

    They released the bond that covered 4 weeks of rent, so 7 weeks of unpaid rent now.

    You didn't go through an agent? An agent shouldn't release the bond, but normally, agent will take their cut out of the bond first because giving you the rest (if there is much left).

    I have landlord insurance for damage, but not for rental loss. The excess amount is 3000$, so not worth it, I guess.

    If $3000 excess is not worth it, that means you expect total amount for the repair to be close to $3000? If so, do you really want to go VCAT? This is your first and only rental property I am guessing. You might think your situation is really bad, but I can assure there are far worse situations (from personal and friends and relatives' experience). Honestly, if it were me, I would definitely try the insurance. It's good to find out whether the insurance is actually decent or just after your money (some insurance companies will try to come up with excuses (refuse to pay certain repairs and/or ask for multiple excesses (multiple claims)) and you can still decide whether to go through with the claim after finding out how much the insurance company is willing to pay). One of our 4 big banks' own insurance arm was so bad that I have forever blacklisted it (it came up with some really dodgy and unreasonable excuses not to pay, was on the news a few years ago).

    Instead of spending energy on trying to get money back from the previous tenant (which, even if you won the case, won't be easy, as they will come up with excuses to pay over a long period of time), spend time getting the property back into an attractive state to rent it out again. Repair expenses should be tax deductible (and since there was bond involved, assuming it was done formally, our government and ATO knows it is a rental property).

    • trapper on 23/05/2022 - 11:10

      It's still important to go to VCAT and take the other actions available, because the alternative is letting these terrible tenants walk away scot-free.

      It's OP's duty to the community. :)

      • netsurfer on 23/05/2022 - 12:38

        If you are a VCAT judge, you will rule heavily in OP's favour because:

        • OP is under-insured and not willing to pay the excess to use it.
        • Tenant got kicked out, but for some reason is filthy rich (or not in any financial hardship).
        • Tenant refused to pay rent, but for some reason, will be willing pay for everything.

        Also, OP's question:

        Can I claim my own hours of work and seek compensation in VCAT?

        Sorry, but it doesn't work that way (I wish the tenants will get punished). Life is unfair, especially for a landlord. Tenants know their rights well. OP could go to VCAT, but the priority is to get the rental property fixed and rent it out again. Have better tenant screening this time. Never rent to people you know.

        There are worse cases for landlords to go to VCAT, if OP intends to just get tenant to cough up 100% of the cost and thinks that's what VCAT is there for, he will be disappointed. Yes, we know the tenants were horrible, but whether we like it or not, OP agreed to rent the place out to the tenants. OP did receive some rent in the past, right? Also, if OP went VCAT and informed the judge that he has insurance but elected not to use it, do you really think the VCAT judge will be happy about that?

        This is far from the worst case I've heard of or personally experienced. Moral support from OZBers is useless. Expecting the tenants to pay is unrealistic. They are no longer living there so they have zero incentive to pay. Also, what can OP do if tenant still won't pay? Send debt collectors?

  • Darayus on 23/05/2022 - 11:54

    Mate, get TS as LL and bldg insurance for an investment property, no one can beat them not even NRMA. they are the best.
    I had many claims with them and they have handled all claims professionally without even blinking an eyelid.
    First you need investment property to be managed by REA so that your insurance company will be comfortable covering your property risk.
    Secondly, call the council for hard rubbish pickup and drop everything for them to pick up. This is the best and cheapest option.
    Engaged a cheap handyman on a daily basis and get all damaged items repaired and fixed,
    Engage some mates to give them a slab of beer and ask them to help you to move all unwanted items to throw out.
    Never again insure items with budget or aami they are hopeless.
    this advise is based on tenant thrashed my property over last 10 years in Sydney west,

    • netsurfer on 23/05/2022 - 13:18

      TS can be dodgy too, if you only use it for only LL insurance. TS's building is quite pricey. Got tricked by agent to get TS LL insurance. Pretty useless.

  • Elnato on 23/05/2022 - 11:57

    Sorry this happened to you mate, can only echo what others have said and review your insurance, put in some hard work and fix what you can, and find other tenants that better respect the property

  • MiguelSanchez91 on 23/05/2022 - 11:59
    +1

    Say the line OzBargain User!

    I am underinsured to save money…

    YAYYYYYYYYYY!

  • dmcneice on 23/05/2022 - 13:31

    Go to VCAT, I've found they will side with the Landlord on most occassions, you have little to lose going to VCAT. At the very least they will have a mark on their names for the future.

    We were renting and took owners to VCAT after they wanted $800 of our bond to mow the lawn and mulch the garden (block was 500m2 total). We moved out 23rd December and REA didnt expect until the 8th of Jan (as they were closed). By then it had regrown somewhat. We lost all $800 despite our pictures.

    Moral of the story: you'll win easily.

  • OzHunterNSW on 23/05/2022 - 15:30
    -1

    You don't sound capable in maintaining the portfolio… why didn't you have a Real estate handle it?

    How could you allow 11 weeks in arrears?

    You need to itemise exactly what has occurred, show quotes of repairs etc, receipts unpaid rent, then take it all to Tribunal NOW!!!!!!

    You need to stop them accessing their Bond…

    Why are you talking to us?

    You should have known all this.

  • CheeryCheapskate on 23/05/2022 - 16:13

    Dang, it really sucks to hear stories like this.
    I recently had tenants out but it wasn't as bad however I do have some input.

    1. Agree that insurance should be taken if you can.
    2. VCAT is the other option and as much as it can be a headache, they should get back what you've lost.
    3. Watch the legal period to hold items. I believe it was 14 days (for certain items) when you can dump everything but 90 days for things personal documents and media (data). Once the dates are over however, feel free to dump.
    4. A lot of these headaches occur if you don't have a real estate agent (I don't know if you have one or not but if not, might be worth getting to avoid these situations again). If you did manage the property yourself then you will need/it will work in your favour if you have contracts and evidence if doing insurance and VCAT.

    Sorry to say but it is financially better to rid and fix everything even at some of your expense and move on to better tenants.

  • Hangryuman on 23/05/2022 - 18:50
    +1

    at least the unpaid rent should reduce your taxable income -

    then chalk it up to experience (the name we give to our mistakes)

    I am an expert (one who has made all the mistakes) after 40 years of being a DIY landlord.

    Lesson 1: pay close attention to rent, and do not accept excuses (regularly used by malingerers who have no intention of paying rent)

    the day after rent is late, issue a notice to quit due to rent default, so the process is in train and you can get a Sherrif to evict ASAP if they then fail to pay - this lets them know it's not a free ride.

    but basically as a DIY landlord I spent time interviewing prospective tenants, and in 40 years only had one lot who abandoned the place leaving the keys inside owing a couple weeks rent. Oh yeah and one guy with a high-flying international job who turned out to be an angry drug user who smashed a couple holes in the wall.

  • echelon6 on 24/05/2022 - 09:34

    How did you let it grow to 11w in arrears? you should learn from this. I book a Tribunal hearing every time any tenant falls in arrears. Good motivator.

  • michaelTito on 24/05/2022 - 14:32

    Am I the only one who's feeling bad for the new born baby's future? Wouldn't want to grow up in that family.

  • Phreakuency on 24/05/2022 - 15:27

    How did the property get in such a state?

    Surely you would have had routine inspections so nothing this major could pile up?

    It sucks. But best of luck.

    Hopefully they learn their lesson or never get approved for a property again.

    • Yola on 24/05/2022 - 17:03

      If you read this thread you will see that the OP has comprehensively and more than once answered this question.

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