Property Damaged by Tenants - What Are Our Options if They Don't Fix It When They Leave?

Ljolee3 on 13/04/2022 - 13:42

We have a property in NSW which has been rented out for almost 3 years to the same tenants. We will not be renewing the lease, and will be giving 30 days notice to vacate.

At the latest inspection, there appears to be at least a few thousand dollars worth of repairs which will need to be done. This includes things like missing curtains, missing inbuilt wardrobe doors, broken glass sliding doors, holes in walls, etc. Prior inspections all indicated that the property was in a reasonable condition but messy, but there were always marks/drawings on the walls (which were painted just before they moved in).

They are currently 2 weeks behind in rent, and we are hopeful but not confident that it will be paid, as well as the rent for the next 30 days. We will be advising the items which need to be repaired/replaced before vacating, but again, we are hopeful but not confident. The bond may cover the rental arrears, but will definitely not cover cleaning, repairs, repainting. Our REA has said we can get the tribunal involved if the tenants refuse to leave, but she doesn't think that will be the case. She hasn't suggested going to the tribunal for the damage, and has told us basically we will be out of pocket replacing/repairing.

So my question is, can we go to the tribunal to try to get the tenants to pay for the damage? If they have already moved out, will there be any point? Should we claim landlord insurance, or will this affect our future premiums too much? Or is our only option just to suck it up as an investment loss and repair at our cost?

Home & Garden

Comments

  • rektrading on 13/04/2022 - 13:44
    +60

    Use your landlord insurance.

    • blwnhr on 14/04/2022 - 08:33
      +1

      Landlord insurance covers stuff-all when it comes to tenant damage.

      • rektrading on 14/04/2022 - 08:36
        +16

        Why are landlords paying for a service that doesn't work?

        • payless69 on 16/04/2022 - 07:58

          Because landlords generally vote for a working government. An old fashioned idea that socialism could be slowed.

      • Bigboomboom on 14/04/2022 - 12:07
        +11

        Last time I had to use LL insurance which was like 5 years ago with Comminsure, they covered all damages and also unpaid rent (Had to evict them because they refused to leave with 2 months in arrear by that point).

        • Hurg on 14/04/2022 - 17:20
          +6

          Must be luck of the draw. I had AAMI and they refused to cover anything because they said it wasn't 'malicious' and that they wouldn't even consider it unless I took the tenants to court.

          (profanity) ripoff.

          • Bigboomboom on 14/04/2022 - 18:11
            +1

            @Hurg: In my case they did not pay rent for 2 months, I had to go through tribunal to get eviction order. They failed to leave and we had to get the Sheriff office to evict them. The damage was around $1,500 repair but I got paid all the rent that they owed up until we evicted them (around 2.5-3 months by then I think).

          • imurgod on 14/04/2022 - 18:27

            @Hurg: Out of curiosity, if it was malicious damage (which is a criminal act), why didn't you just file a police report?
            There's no condition under the policy that it needs to go to court.

            • Hurg on 14/04/2022 - 19:30
              +5

              @imurgod: Too much hassle. Plus I told them if they were out by the said date then I wasn't going to take them to court. Got a fair chunk of it back in the bond, and the next tenants were so keen to move in that they told me not to worry about it and they'd clean up themselves… They've been good tenants, must be going on five years now - I don't raise the rent for them.

              • imurgod on 14/04/2022 - 19:35
                +1

                @Hurg: Fair enough mate. Glad it worked out.

                If I may make a suggestion, go through a steadfast broker and get one of their accidental damage landlord policies.

                No landlord policies anywhere come close and the pricing and claims are excellent.

              • ColtNoir on 14/04/2022 - 21:02
                +2

                @Hurg: Can I just thank you for being a reasonable LL. Seeing the give and take in the relationship.
                I’ve had a mix and when you get a good one it’s refreshing (currently have a good one so far).

                Edit: removed unnecessary @

                • Hurg on 15/04/2022 - 10:41
                  +3

                  @ColtNoir: Cheers. I much prefer having good tenants who always pay rent on time and look after the house like it's their own over squeezing every dollar out I can.

        • wozz on 14/04/2022 - 20:21
          +1

          I used comminsure for similar. Very easy to deal with. All damage covered, lost rent was covered too.
          It had gone to tribunal in my case but they left before sheriff evicted them

        • payless69 on 16/04/2022 - 08:00

          In the meantime CBA sold off their insurance to a HK based entity. Already during the sale they stopped payouts unless they lost in court.

      • imurgod on 14/04/2022 - 18:25
        +3

        Not true. Only the cheap and nasty policies like Terri Scheer, NRMA, AAMI, EBM, etc. don't cover anything.

        For not much more, you can get an Accidental Damage policy which covers just about everything.

        Don't get advice from the Real Estate agent as they have no idea about insurance but do clip the ticket for every policy they sell.

        Also, they have no idea how to get a claim paid. I often find claims that have been denied are actually payable under the PDS but nobody has provided the right advice.

        I review the history of clients that switch to us and go back and make the insurer pay for what a denied claim… ditto with Strata.

      • tonsta on 15/04/2022 - 12:34

        make sure you make a police report for malicious damage, self reporting online.

  • rektrading on 13/04/2022 - 13:46
    +9

    Or is our only option just to suck it up as an investment loss and repair at our cost?

    Bad tenants are one of the perks of being a landlord.

    • Ghost47 on 13/04/2022 - 15:28
      +3

      How did you follow up your first comment with this lmfao.

    • HeWhoKnows on 14/04/2022 - 08:42
      +5

      "They are currently 2 weeks behind in rent, and we are hopeful but not confident that it will be paid, as well as the rent for the next 30 days."

      Thats 6 weeks worth of rent to be paid and you only have 4 weeks bond

      The tenants know that and wont be paying any more rent.

      Are you managing directly or using an agent?

      Issue a notice to vacate IMMEDIATELY then……
      Take the matter to the Dept of Fair Trading ASAP as they are already 2 weeks in arrears

  • MS Paint on 13/04/2022 - 13:50

    What did Terri say when you called him?

    • iNeed2Pee on 13/04/2022 - 14:03
      +15

      They said "My property portfolio is protected by Terri Scheer, I wouldn't trust anyone else".

    • djkelly69 on 13/04/2022 - 14:05
      +4

      "I'm a she"??

    • djones145 on 13/04/2022 - 14:58
      +2

      looks like the advertising has work! i'll tell the marketing team

  • dtc on 13/04/2022 - 14:03
    +8

    Why do people take out insurance and then say 'I wont claim'. Claims dont affect your premiums that much (do some dummy quotes with 'no previous claims' vs '3 previous claims' and see what happens - yes, there is a slight increase but not much. Certainly not $1000s difference).

    • jolee3 on 13/04/2022 - 16:04

      To be clear - we are not against claiming. I am just hoping for advice from people who have had prior experience, as we have never claimed before. Like car insurance…if it's $100 damage then it's not worth claiming. We just aren't sure what the usual 'threshold' is on landlord insurance for it to be of value. Sounds like thousands is above the threshold, so this may be the path forward.

    • StonedWizard on 13/04/2022 - 16:22

      @dtc - I don't have experience with landlord insurance. For tenant damage, does the insurer pursue the tenant for the cost of the damage?

      Otherwise, I'm assuming there would still be an excess + the cost of increased premium over a certain period of time. If the tenants genuinely damaged the property and it's not wear and tear. I don't see why the landlord has to cover the cost of this. Insurance shouldn't be the first thing you rely on.

      If tenants continue to cause an increase in the number of claims. Insurers push the cost of premiums up, which means higher costs for the landlord and in turn higher rents required, to cover the cost of this. It's a 2 way street.

      As a collective, more needs to be done to weed out dodgy landlords and tenants.

      • blwnhr on 14/04/2022 - 08:34
        +2

        The OP is about to find out how useless landlord insurance really is. It won't cover 90% of the items listed.

        • kiitos on 14/04/2022 - 12:16
          +1

          What is covered?

        • wozz on 14/04/2022 - 20:23

          From my experience with comminsure landlord insurance was very useful. Covered everything..

      • dtc on 14/04/2022 - 20:15

        Sure, the landlord can pursue the tenants. Same as you can pursue the guy without insurance who rear ended you. Up to you; if you want to spend the time and effort and probably not recover anything

  • jellykingdom on 13/04/2022 - 14:13
    +32

    Our REA has said we can get the tribunal involved if the tenants refuse to leave

    I absolutely despise property managers. They do next to nothing when things are good because there's no real need, and they do next to nothing when things are bad because its too difficult. I have rented and I have investment property, and i've yet to truly have a good REA.

    • Clear on 13/04/2022 - 14:29
      +1

      My last property manager was really good at getting broken stuff repaired that she'd never tell me and send me a bill. Like thousands of dollars worth of "repairs" done by her mates. In the end I got a lot of shit fixed for free ;)

      • Banana on 13/04/2022 - 14:30

        Where are you located? Can you please refer your PM?

        • Clear on 13/04/2022 - 14:34

          She's no longer in the industry. I can certainly put you in touch with the dodgy tradies. They'll bill you an 'excavator rental' for a small 1 foot deep hole.

          • MS Paint on 13/04/2022 - 15:01

            @Clear: I had to bury a pet rabbit in a small hole in the middle of summer. I was wishing I had an excavator.

            • AdosHouse on 13/04/2022 - 15:30

              @MS Paint: I buried my large breed dog in the yard outside my bedroom window, but I wanted it a decent depth, so I went about 1.5m down, with a lot of clay in there, machinery would have made that a hell of a lot easier.

              • WT on 14/04/2022 - 07:58

                @AdosHouse: I dug about 6x 2' deep holes in clay. I used one of those 2 man post hole diggers and it was still a ball breaker

                In hind sight I would have used a bob cat with auger or dug a couple of inches and fill it with a clay breaker and let it soak in

                • AdosHouse on 14/04/2022 - 13:13

                  @WT: God I wish I could have had machinery, but dog being put down wasn't exactly scheduled, and everything nearby was booked out for that day. I did end up going to Bunnings and getting one of those air chisel guns for my air compressor which helped a bit to break up the harder clay.

    • sjj89 on 13/04/2022 - 14:31
      +7

      REAs are unnecessary middlemen that inflate the value of property because they always need their cut

  • orangetrain on 13/04/2022 - 14:45

    So my question is, can we go to the tribunal to try to get the tenants to pay for the damage?

    Yes you can and/or use bond. Research what's involved and the costs first.

    If they have already moved out, will there be any point?

    Bond?

    Should we claim landlord insurance, or will this affect our future premiums too much?

    Did you compare claiming vs what happens if you don't claim? Get some quotes to compare.

    Or is our only option just to suck it up as an investment loss and repair at our cost?

    Do a cost benefit analysis.

  • pharkurnell on 13/04/2022 - 14:52

    You never looked into this before buying a rental, or renting it out?

    • jolee3 on 13/04/2022 - 15:59
      +5

      You don't have a rental and expect people to trash it. We haven't raised the rent the time they were there, we attend to repairs promptly, and we had hoped tenants would respect our property as we respect them. And FYI it was owner-occupied, and turned into a rental after we moved elsewhere so we didn't exactly buy a rental.

      We have landlord insurance to prepare for the worst, but on letting a rental you don't do a specific cost benefit analysis of a tenant causing $1k of damage. Or $2k of damage. Or $10k of damage. Where do you stop? We haven't claimed on the insurance before and I am unsure if it's designed for thousands, or if it's only worthwhile for tens of thousands, given the potential damage on the price of a house. Hence I am seeking advice from people who may have come across this before.

      • Alexander420 on 13/04/2022 - 16:11
        +4

        Get your property manager to do their work
        End of lease inspection checklist should shown any damage current tenant did then ask them to give you few quotes to get them fix, then if you think it is worthwhile you can lodge a claim with your landlord insurance.

        I work in the estate industry and have handled load of cases like this. Absolutely nothing to worry about if you have insurance.

      • Wantsmoreinfo on 15/04/2022 - 16:29
        +1

        to be fair, partly the property managers fault as well. its really hard to do that much damage in such a short amount of time. should have been sorted ages ago.

  • AustriaBargain on 13/04/2022 - 14:55
    -3

    You should have bought Afterpay shares instead of a house.

    • capslock on 13/04/2022 - 19:14
      +1

      afterpay shares no longer exist

      • AustriaBargain on 13/04/2022 - 19:18
        -2

        They were bought by Twitter/Square/Block/Whatever. You'd still have made bank though.

  • Quantumcat on 13/04/2022 - 14:59
    +9

    What is the point of having landlord insurance if you don't claim? Use it, you paid for it just for events like this.

  • naruto128 on 13/04/2022 - 15:02
    +4

    Hopefully these ppl will be blacklisted from renting anywhere. They then go cry poor to the press saying they are living in their cars with their 10 kids and dogs and need priority housing cos they cant get a rental. One wonders why.

    • AustriaBargain on 13/04/2022 - 15:27
      +4

      Kids shouldn't be sleeping in cars, it really doesn't matter if it was the parent's fault or not.

      • [Deactivated] on 13/04/2022 - 16:38
        +7

        if it's the story i'm thinking of, the 8 year old somehow trashed the house they were previously living in (government housing..) and while kids shouldn't go homeless, i sure as hell wouldn't rent my property to them if i was a landlord, no sane person would.

  • brendanm on 13/04/2022 - 15:47
    +12

    Property manager has obviously been doing a stellar job at inspections 😂

    • Vote for Pedro on 14/04/2022 - 22:17

      This is exactly it. So all this damage happened between the last and second last inspection

  • AndyC1 on 13/04/2022 - 16:55
    +2

    You will not get any of the bond back if you do not know and follow the rules in NSW as they will take you to the tribunal and possibly win, which is wrong but the law is the law and it sometimes stinks.

    Saying that get the REA to get them out and put a bond dispute in the day they move out. Get quotes to get the place fixed the second day they get out and then you will know how much of the bond you may get.

  • morse on 14/04/2022 - 02:55
    +1

    Yes, you can take them to the tribunal if there isn’t enough bond to cover damages and if they are in arrears. I think the first step would be to get quotes for any damage that is not reasonable wear and tear and ask them to pay anything not covered by the bond, then if they say no take it to tribunal. When you’re at that point you can call the tribunal and they will advise whether it’s a matter within their scope. Be aware though that the tribunal may not rule in your favour. You can also call your insurer to ask about the process, without putting in the claim. Really before all of this you need to give them a chance to do the right thing, they have right to clean the place up and repair it themselves prior to vacating - unfortunately it sounds unlikely.

  • Bob Svargis on 14/04/2022 - 08:27
    +1

    Bond and then insurance. So what if your premiums go up? That's what it's there for!

    Been in that situation before. Just claim. You could try to pursue them through courts but good luck with that, it's probably not worth it.

  • George Washington on 14/04/2022 - 09:04

    Get a handy man in get a few quotes on the repairs needed.
    If the sum is too large go with insurance if not pay it out of pocket and tax deduct it.

    From my experience never put curtains or blinds in a rental property. If tennant wish to install one they can do it themselves.

    Are these the sliding ones? missing inbuilt wardrobe doors,
    What is this? broken glass sliding doors,

    Easy to DIY patch yourself holes in walls

    • photonbuddy on 14/04/2022 - 16:15

      Easy to DIY patch yourself holes in walls

      Perhaps, but why do all this DIY stuff just to let the insurance company fatten their bottom line?

      I'd be going over with a fine eye and getting every little bit of damage fixed properly.

  • saltypete on 14/04/2022 - 13:22

    Similar happened to us. We had to fight to retain the bond. Thousands out of pocket.
    Insurance is useless.
    You are screwed.
    Welcome to the world of rich capitalist landlords, that are heartless users of the poor…..
    BTW, you may give correct notice etc, but be prepared for a fight to actually get them out of your property….

  • yotis on 14/04/2022 - 16:20
    +1

    Not an expert here but these questions should first be directed to your REA first. They are paid for to manage your property.

    If NSW is the same as QLD… you should have gotten a copy of the entry report and the regular inspection reports which you can use to assess and demonstrate what is true damage and what is wear and tear. Again your REA should be able to advise you of this and what steps to take. Your REA would also be the one to submit insurance claim and also provide evidence to support the same.

    Have a look at your REA fees and charges to check what they charge for attending tribunal, some charges per hour and some fixed fee.

    If your REA is unable to help in any of these things, then unfortunately you should really consider a different agent if you are planning to rent it out later.

  • Fysh on 14/04/2022 - 18:23
    +2

    I successfully had the real estate agent settle for a few $k because they failed to manage water usage in arrears. Failed to properly inspect property. If you can prove the damage wasn't done since the last inspection use your insurance and also go after a settlement for failing to complete appropriate inspections. I said as they were not correctly managing the property I wanted 36 months of management fees back.

  • ribze1 on 14/04/2022 - 22:47
    +5

    Why i prefer shares over property.

  • Elnato on 15/04/2022 - 03:21

    What are the chances of suing the real estate/property manager for negligence in these circumstances?

  • cms1 on 15/04/2022 - 11:56
    +2

    Is this your tenant… https://www.ozbargain.com.au/node/694604

  • twigman on 15/04/2022 - 17:14
    +1

    Hey mate,
    I am not a lawyer and this is not legal advise, but I have exposure to the insanity involved in civil legal matters and can help give you an idea of what you're in for.
    In saying that, further research any points you're interested in below to ensure you have accurate information.

    I work in missing persons and asset location and recovery. Once you go through with a tribunal hearing the tenant will probably not attend and a default judgement will be ruled in your favor against them for the amount. Then you will have to contend with actually getting the person(s) to pay the outstanding amount declared by the court, and due process is required in which case they will need to be located and served legal documents (typically an affidavit with their outstanding debt to you) in order for any further progress to be made.

    In your current circumstance I would put all your effort into getting what they may currently owe and the remaining rent until they vacate the premises, then ensuring you acquire the entirety of the bond. Once they have vacated your property, there's a good chance they will be very difficult to locate and be held accountable (from experience).

    Also regarding tribunal hearings, I have seen fine print for many real estate agencies that will bill you the value of 1 week rent for attending and representing you at NCAT, so ensure you're aware of any other/hidden fees if you want to push for them to represent you.

    I have seen mentioned on other threads regarding a tenant moving out; the moment the key is expected to be returned, file a dispute over the bond the moment it is, otherwise as i understand if they (the tenant) are first to file a release on their bond then the onus falls on you to prove damages and your case, whereas if you file for bond first then the onus is on them to contest and prove no damages or outstanding arrears.

    Also i believe by law (last i checked) the tenants have to be given 2 weeks notice to pay back the arrears in the event the bond does not cover the damages caused after vacating, after which case they are added to a tenant blacklist that [some] real estates agencies cross check applicants against, however last i checked the person had to be purged from the list after 3 years.

    It sounds like the real estate aren't interested in dealing with the issue. I am sure they [real estate] will throw 100 threats about blacklisting and consequences of arrears, but 99% of the time they are all bark and no bite.

    The blacklisting mechanism isn't a huge obstacle for the tenant either; they just move in with parents, live with a friend, have a partner apply for the rental, use a private rental, stay in caravan/holiday park accommodation, buy their own property, or use a property manger without access or don't check blacklist database, are these just some of the things they do to continue having a roof over their head.

    If you have landlords insurance, i would be using that, and chasing every last cent you can until they move out, and making sure you file for the bond the first moment you can. You will need to be on the real estates agencies case the moment the tenants hand the key back in for that bond.

    *had some issues posting this comment, hopefully this sticks.

  • Dabbler68 on 15/04/2022 - 18:30
    +1

    Most tenants who choose not to pay will know that the bond will be consumed long before they are forced out. So for some, this is just a way to save on their overall rental costs. If they know there is damage to be paid for as well, running out the bond is an easy tactic to avoid it. For the amounts involved most owners won't pursue them down the court path.

    Years ago I had a tenant who skipped, leaving a bit of damage and not enough bond. I took her to the tribunal and won but there was no realistic way to pursue that shortfall. There is (or was) a register that records the debt as a judgement, and this affects their credit rating. It may make life more difficult for the one who skipped, but it made no difference in getting my money.

  • amazonaddict on 15/04/2022 - 23:21

    I am looking from a landlord’s point of view. How can someone avoid this hassle with bad tenents? If it is an apartment will a ‘contents only’, landlord insurance cover these? Or bench tops and carpets are only covered under ‘building’ landlord insurance. How does someone claim this? Will Insurance company fix the damages with their repairers and chase the tennant for the cost? Can we claim the excess from bond?

  • payless69 on 16/04/2022 - 08:02

    Be happy to be in the last state not run by the red brigade.
    Victoria and SA require a meth test. Usual outcome: 60 - 120k meth removal work.
    Now go on and vote for the ozbargain prefered new fed government!

  • twinbag on 16/04/2022 - 15:50
    +1

    go through insurance, and read your pds so you know what you're covered for.

    In my experience with ANZ/OnePath they didn't care what was in the pds and tried to make me accept low ball offers and even got their lawyers involved to try and intimidate me into settling.

    I ended up going through the insurance ombudsman who were fantastic. Got my claim paid in full plus interest and an extra $1,000 for being given the runaround for 2 years.

  • jolee3 on 19/04/2022 - 16:16

    Looks like we will hope that they repair/replace some things at least, ask the REA to obtain quotes for the rest, then do cost-benefit analysis on claiming landlord insurance.Thanks everyone!

  • jolee3 on 30/07/2022 - 12:38
    +2

    Update for anyone still following - because I personally like to hear resolutions to questions asked…

    The total bill was somewhere in the vicinity of $6k to get it back to a rentable state, at which point the new tenants have found that the stove (warranty repair pending), dishwasher (we replaced) and air conditioner (pending repair) are not working too so those costs are still adding up. How you break everything in the house, I'll never know.

    The previous tenants actually paid the rent up to date and promptly lodged for their bond refund as soon as they moved out. Our REA went to tribunal and we got the full value of the bond without any issues.

    We made a claim with our landlord insurance, which we have insured for buildings only (not contents). Obviously any contents were not insured as expected, but the bulk of the building damage fell under two categories - "malicious damage" and "tenant neglect". As it turns out…there are A LOT of things classed as "tenant neglect" and they are not covered.

    In the end only the malicious damage components were covered, and that involves an additional excess of 4 x weeks rent, on top of the basic excess. Loss of rent was not covered because they considered the place to be "habitable"…….

    So after excess deduction we received a grant total payout of a whopping $400. Disappointing result, given you'd think being responsible and paying insurance year in year out is supposed to cover you. The lady we dealt with at the insurer was lovely but that's just how it is. We won't be renewing with them that's for sure, not that I can be sure that any others are any better.

    We can only write it off as an investment loss, but currently on a single income with everything going up it's unfortunate. We've thrown our limited savings into it but we are of course more fortunate than many people in that we have savings to throw at all. Can only hope to have better tenants going forward!

    • Yola on 30/07/2022 - 16:18
      +1

      Thanks for the update appreciate it and it helps all of us learn. This is why I do not have landlord insurance on one of my investment properties. Can you tell us the name of the company (or send me a PM) I want to make sure I do not insure my other property with them.

    • ColtNoir on 31/07/2022 - 09:08

      Thanks for the update. I think this shows why you really need to inspect the PDS when taking out insurance.
      Good luck with your future insurance needs.

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