Tenant and Tenancy Problems
One of the major reasons why owners appoint us to act as their Property Manager is our ability to deal with a wide variety of tenant and general tenancy problems as well as our ability to mitigate any associated financial losses. Problem solving calls for a high level of ‘people’ or ‘relationship’ skills as well as an intimate knowledge of the Residential Tenancies Act and its associated procedures and notices.
The most common tenant problem is without a doubt the non payment of rent followed closely by ‘unfair’ wear and tear and damage to the premises. Noise and nuisance is also fairly common particularly from stereos and from dogs whilst lack of garden care, overcrowding and disputes with neighbours all have to be dealt with from time to time. On other occasions we may have to deal with the police following a burglary or an attempted break-in; the fire service following a fire; or neighbours who are upset about encroaching trees or fencing problems.
When such difficulties arise we have found that by taking prompt and positive action we can very often eliminate the problem or at least limit it and keep it from getting out of hand. In many cases however the solution requires a firm response that may not always be agreeable with the tenants. Breach of contract by a tenant is unacceptable even when personal problems have arisen and although we can sympathise with their situation, we will nevertheless pursue our legal remedies in accordance with the Residential Tenancies Act (RTA).
The Residential Tenancies Act (RTA) stipulates a number of situations where it is mandatory to issue appropriate notices and it also stipulates the content of such notices.
If problems should arise that are in breach of the Tenancy Agreement or the Residential Tenancies Act we issue what is called a ‘14 Day to Remedy Notice’ pursuant to section 56 of the Act. If a tenant has missed a rent payment for instance and has failed to respond to our ‘reminder’ phone call then a ‘14 Day’ notice will be served. Likewise we issue ’14 Day’ notices for repairs to damage to the premises, noise and nuisance, unkempt grounds, overcrowding, etc. If problems should persist then further application will be made to Tenancy Services for either a mediated solution or to the Tenancy Tribunal for a court order.
Other notices that we issue from time to time may include notice to inspect premises, notice to enter to do work, notice of intention to sell premises, notice to terminate tenancy, change of landlord notice, and notice to increase rent.
Should a breach of a Tenancy Agreement or the Residential Tenancies Act not be remedied by a tenant following the issue of a ‘14 Day to Remedy Notice’, we will as a matter of course make application to Tenancy Services to have the matter settled by mediation. An application for mediation costs just $20.44 and it takes only a few days to arrange a meeting. It is very often time and money well spent!
The meeting is usually held in the local Tenancy Services office or by a telephone ‘conference call’ with the tenant, ourselves (as landlord) and the Tenancy Mediator present. It is a fairly informal affair but the issues are thoroughly discussed and the various options for resolution considered. If a solution can be agreed (say for instance an agreement for the tenant to make extra payments on top of rent in order to catch up rent arrears) then the agreement is written up by the mediator as a Mediated Order and all parties sign the document.
It is our practice to ensure that wherever possible our mediated agreements contain a ‘consequential clause’ which means that should the tenant not stick to the mediated agreement then a consequence will be imposed. This is usually the termination of the tenancy within 48 hours! We also ask that all our mediated orders be ‘sealed’ by the Tenancy Tribunal which has the effect of turning the Mediated Order into a Court Order which in turn can be enforced by court bailiffs.
If we are unable to come to an agreement at mediation or the tenant does not show up to the meeting then we can ask that our application be automatically referred to the Tenancy Tribunal for a judgement hearing.
In the event that we are unable to come to an agreement with a tenant following a mediation meeting, or should the tenant not attend the mediation meeting or should the issue be of such a serious nature that mediation would be inappropriate, then we will automatically take the matter to the Tenancy Tribunal for resolution.
A Tenancy Tribunal hearing is held in a formal court setting with an official adjudicator presiding and with all proceedings being recorded. As we are generally the ‘applicant’ we are the first to put our case forward and it is vital that all the relevant evidence is properly presented and any relevant witnesses called. Evidence may be in the form of photos of the premises, rent records and tax invoices from tradesmen for repairs to damage, cleaning, rubbish removal etc. The other party can then respond and likewise present evidence and call witnesses. The adjudicator will then make a judgement based on what he has heard and this judgement is then written up as a Tenancy Tribunal Order. This order can subsequently be enforced as a Court Order by the bailiffs of the court.
Tribunal Orders may be issued for a variety of reasons including termination of the tenancy, the granting of possession of the premises to the landlord, ordering payment of rent arrears, making compensatory payments for landlord expenses, refunding part or the entire bond to either party, and the disposal of goods if tenants goods have been abandoned.
Our company is not in the business of debt collection but we do nevertheless undertake a number of measures on behalf of property owners to try and recover as much tenant debt as possible. We hold the view that we should pursue the erring tenant for the rest of their lives until their debt is settled.
Once a Tenancy Tribunal Order has been issued we try and make an immediate arrangement with the tenant to make debt repayments direct into our Trust Account. In most cases however the tenant debtor just ‘disappears’ and there would seem to be little hope of any debt recovery. In these cases we place the debt with Baycorp Advantage who has the facilities to find and compel debtors to honour their commitments. For this service they charge 20% (plus GST) of all moneys recovered.
It is our practice to maintain a separate debtor’s account into which debt repayments are credited and payments for extra Baycorp charges and fees are debited. Extra Baycorp charges may include $135.00 to obtain an Examination Order, $90.00 for an Attachment Order, Document Service fees are $33.75, Agents Fees are $78.75 and Field Calls are $22.50. All of these extra costs are of course added on to the tenant’s debt! We believe it to be well worthwhile paying these extra charges as it maximises the likelihood of getting a return for the owner. As repayment funds are received we firstly credit the debtors account with the sum of the extra charges and then we make payments to the owners personal account. Unfortunately it can often take several years to get all the debt repaid but we feel that any recovery is worth it!