Longterm Tenants-Excuses over an acknowlged debt< $2k, how 2 recover & gv decent exit

[Anita]

How to start this....

This is not just one tenancy , 3 of our long term tenants ( out of 25 tenancies we manage) are having approx 2 - 4 grands ( for each tenancy) water arrears (minus fixed water chargers).

14 days letters have been sent and they are not hiding, they acknowledged to pay, got it in writing, say for an example, some accepted to pay $50 fortnight etc on top of current rent* however it doesn't happened.

They pay current water slow pace $10 -$15pw to water care direct and if any remainder Watercare deducts from our CC registered with them.


Water arrears is only one side of the story. The biggest lost is not just the unpaid water arrears


*Current rent they pay is at least $100 - $150pw (for each property) lower than the market rent.

True, we have been ignoring increasing rents (which we could have done, at least every 6 month by reasonable little chunks for past 4-5 years would have brought it to at least near market rent).

However we were increasing our portfolio plus as some of you too experience, we were busy with couple Property Managers who have been managing us rather tenants and this aspect of increasing rents with some of our long term tenants have been overlooked.

Thus, our immediate/current loss is $450pw for us every week, just from these 3 x tenants alone, by keeping them.

Mathematically I am better off
A) giving 90day notice or
B) bringing them to Tribunal as it continues to lapse the payments for water and having the house in our possession and
C) re letting to newbies easily over $150pw rent.
D) And recovering the water loss, from them is yet another matter and need dealt efficiently.

Any thing you suggest, how/what need done to move forward.

[PTILoveYou]

B + C + D

I would take to tribunal, get the money, terminate their tenancies immediately, then go find tenants that pay on time and pay market rent.

[BigDreamer]

Actually, I will do all A+B+C+D.

There is no harm giving 90 Days notice (A) now and filing for Tenancy Tribunal (B) while hoping TT will evict immediately to allow you to re-let (C) and sorting out a deal to recover money lost (D).

[Keys]

Don't forget "E"

Increase their rent NOW (notice etc needed)

[Anita]

True, Iagree with A B C D E, however , I am still wondering if it's a sensible thing to do, ie; to put through to TT by L/l, in this context.

Few instances in the past, I have rung to TT as a 'tenant' and what they asked me to do/ to file against landlord etc is so pathetic, the clues ideas suggestions are not those I even ever thought of.

So, wonder if TT might make it worse , may even possibly may turn it to a custard or completely waive or reduce the amount of water arrears that needs paying putting blame or L/l side which they normally do to show that they are smart same as these adjudicators have been doing, as they are normally partial to tenants in most of the cases in their behavior in the past - so just looking possible options...

Or if I duly handover the management to some skilled PM, then, it's a Third Party , say with all letters/paperworks in tact from L/l, duly passed through to the PM, s/he may possibly be able to deal the (new) issues, which has been agreed , a lot better - as tenants have admitted arrears twice with previous landlord /owner, as well as new PM too.

Also, this way it is easier/faster to move on no emotional side of things plus so as long PM got all paperworks, ie agreement reached between landlord and tenants for water arrears, previous 14 day letters / texts / emails of landlord dealt with tenants for the query, as an event log to convince the communication and actions... thus Tribunal actions too may be faster/less cumbersome and possibly will not be a direct attack to L/l but may look at in 'reasonable' eyes....

Await for your thoughts suggestions.

[donna]

Yes if I was you I'd engage a PM promptly - and for all properties too. Being lenient with your tenants should remain your past and not your future.

cheers,

Donna

[mrsaneperson]

I would deal with it myself, i see no point in costly engagement of a PM which may or may not produce the same result as your direct dealing.

2k to 4k water arrears is a serious enough issue not to bide your time anymore with this matter. There will always be a repeat performance from them even if they do catch up , i would give a 90 day notice to the worst 2 of the 3.

File a claim for the water arrears with TT ,you will no doubt be awarded it ,getting it out of the tenant is an entirely different matter; made worse by our weak almost non-existent Govt's debt collection enforcement service.

A + B + C + D + E

[Anita]

Truly, with 30 yrs being in RE, property management - PMs we had from different main stream, boutique style who ever it was have messed things up, when they pass a year and some who i had for short term say for 3 x months, delivered the results to a certain extent.

I realized if we could get an efficient PM to straighten those areas ( anyway, it is easy for them now, they are a TP, and tenants agreed twice the Arrears they are liable for a) with owner and b) again with the new PM) make the job easier for them to enforce the contract/agreement.

Wonder if it happened here,in NZ - can we not contract a PM/an agent or similar to get those assigned tasks done (ie, take over existing tenancy with arrears AGREED by tenants, agent to follow up/take immediate action /manage arrears/ rent increase to market rent/if any agreed payments delayed without notification/action to escalate to tribunal and seek possession of the house and have the debt enforced to pay and new tenants signed in etc ) say for 3 - 4 months for an agreed sum , or to pay progression payments for completion of tasks, as it proceeds, for tasks/achieving deadlines agreed or even at a higher rate of commission and or subject to achieving results for an agreed sum?

Anyone has similar experience with agents/PMs getting engaged for similar tasks for assigned period, would be interesting to know your thoughts suggestions.

[teamchase]

Hi Anita,

Its quite the conundrum because you seem to have the knowledge to act but aren't, and for lack of trust in property managers (or you're employing newbies) you choose not to find a good one and pay them their fee, but are losing far more in rent alone that said fee would cost.
I find this an interesting situation because from time to time we will pick up the ball where landlords drop it, and deal with the tenancy tribunal on said issues, but virtually always the poor client in this situation are un-educated/oblivious to rudimental property management due process.

what's the full story here? you say "which has been agreed , a lot better - as tenants have admitted arrears twice with previous landlord /owner, as well as new PM too. "
Do you currently have an inexperienced/ineffective property manager taking care of the portfolio? or have you acquired and are thus managing some poor performers?

Either way, in answer to your question, yes you could contract a property manager to clean up the mess, and they would do a,b,c,d, and equally as relevant e, immediately (provided situation allows). i've seen and heard a few differing prices and fees negotiated, its just a case of finding the property manager to do it.

If you manage 25 properties, you must spending a reasonable amount of time managing them already? so a little more to send your rent increase+notice to remedy+applications to court+90 day and following up with due process to sort those 3/25, and get portfolio back on track is a good course. (If you have time, it will give you good experience incase this event ever arises again, who knows, maybe this will get your tenants to pay up and get back in the green).

In managing your properties, act today, not tomorrow. I have no doubt that you can fix this.