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  1. #1

    Default Fixed-term tenant wanting to leave NZ

    Hello colleagues

    I have a fixed-term tenancy until sometime next year, however the tenant has indicated that due to financial difficulties he wants to go back to the country he originally came from.

    Now obviously I am happy to discharge him as soon as I have a replacement, but there's no guarantee that I or he can find one before he leaves.

    Hence my concern is the limited options I would have in case he goes overseas soon and disappear? From what I know he will be looking at clearing all his assets here, so I'm wondering if there is anything that I can do to recover the rent in case of default.. Any suggestion or ideas?

    I've been planning to be a way for a month or two so this is certainly very frustrating....

    Any comments, very appreciated.

  2. #2
    Join Date
    Nov 2006
    Location
    Cyberspace
    Posts
    5,761

    Default

    Quote Originally Posted by candel View Post
    I've been planning to be a way for a month or two so this is certainly very frustrating....
    Not a lot you can do. However, it would be worth noting that you are required to appoint a NZ agent from April 1st next year as you will be away (out of NZ) for over 21 days.

  3. #3
    Join Date
    Dec 2004
    Posts
    250

    Default

    He Leaves,
    so you get another tenant.
    Whats the real problem ? That he has not kept his end of the bargain ?
    Move on, get another tenant.
    Good Houses always (ok not quite 100%) beget good tenants.

  4. #4
    Join Date
    Aug 2009
    Location
    Manawatu - Palmerston North
    Posts
    208

    Default

    What Hec says. Re rent your property. If you are too busy get friends, family or a professional property manager to do it. If you have notice there should be no reason why you can't rent it out in time. If there is any vacancy down time then deduct it from their bond before releasing it.

    Regards
    Aaron

  5. #5

    Default Tenant in financial difficulty

    Just something to be aware of is that if he is in financial difficulty and can show this to the tenancy tribunal then he will be able to exit the contract anyway.

    I would suggest negotiating with him as best you can to find a solution that works for both of you. Keep the communication lines open, and they will be less likely to leave you in the lurch.

  6. #6
    Join Date
    Mar 2007
    Location
    Auckland
    Posts
    3,019

    Default

    Quote Originally Posted by Property Man View Post
    deduct it from their bond before releasing it.
    A tenant in financial difficulty will soon start to fall behind in their rent payments. By the time you react, serve notices and suchlike, they will have chewed up all of their bond in rent arrears. No bond will be available for any other costs.

  7. #7
    Join Date
    Jun 2007
    Location
    Wellington
    Posts
    1,237

    Default

    Talk to him more....

    discuss the idea of him keeping the place really neat so you can show through prospective tenants and have the best chance of solving both your problems. Appoint a PM if you're too busy.

    Try to get a good picture of exactly when his rent money will start to run out. Add to this the numbers of weeks bond you think will remain after you've taken any damage out of it.

    1-3 weeks Go for it and get a tenant ASAP.
    4-8 weeks: Go for it ASAP, but bump the rent (ie chance you're arm for a higher rent while he is paying anyway). Drop the advertised rent of you have no luck with 3 weeks left to go
    9+ weeks: GOLD. Go for a premium rent, and keep gunning for it well into January. Only drop the advertised rent with 3 weeks left to go.

    You did put a 1 weeks rent break fee into your fixed term T's and C's didn't you?


  8. #8
    Join Date
    Nov 2006
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    Default

    Quote Originally Posted by Robin McCandless View Post
    You did put a 1 weeks rent break fee into your fixed term T's and C's didn't you?
    Why on earth would you do that? It turns a FTT into a Periodic. Silly clause.

  9. #9
    Join Date
    Jun 2007
    Location
    Wellington
    Posts
    1,237

    Default

    FTT's are effectively periodic in that the tenant can bugger off whenever they feel like it.

    We put in clauses to the effect that they can request a termination of the FTT, but we have to find tenants to our satisfaction, and they are liable for all rent until we do, and they also have to pay a 1 weeks break fee as well.

    This way we get to chase a higher rent while they are still liable (rather than having a vacant property).

    If a tenant really wants to bail, they will, this is just a play to try to claw back some of the costs and effort.



 

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