Costs breaking fixed term tenancy

[Learning]

I bet most people would already be charging the extra $10/wk if they could get it anyway - the rent is not a 'cost plus' sum.
People charge what the market will bear.

Now if every LL acted in a cartel and upped their rent you'd get it.

Such a ban would have an almost cartel effect. Hands up all PM’s and multiple property owners who will just absorb the loss of thousands of dollars in letting fees and not pass a cent of cost on to their clients. Go on, show of hands. Anyone?

Harder question- of those who do eventually pass on the cost how many will reduce the rent by that amount if the FTA is rolled over for another term?

[Wayne]

Harder question- of those who do eventually pass on the cost how many will reduce the rent by that amount if the FTA is rolled over for another term?

Haha haha haha haha

[Sharon]

Unfortunately hes missed the point on whole range of matters and struggles with concept tenants circumstances change be it PD or FTT then confuses the flexibility of looking after couple self owned properties versus a PM with 200 rent roll.

[Learning]

Please Sharon, where have I gone wrong? Do you not like BMWs?

[Sharon]

Never mind Learning, your concepts work well for you so thats good.This is a forum for people to share thoughts and explore ideas. Strategy for a private individual with couple properties might be different from someone managing a large PM firm - keep in mind.
Interesting link posted by Artemis in another thread. News to me the Auck TT accepts a 10% loading fee for certain work done by PM. Link below.
thespinoff.co.nz/society/01-03-2018/how-many-property-managers-does-it-take-to-screw-in-a-lightbulb/

[Learning]

Despite the Act being the law and our holy bible remember that in the eyes of the adjudicators they‘re only guidelines and are flexible. Section 85 basically says the adjudicator can ignore everything and make it up as they go along.

I half-won a case under section 85. Despite the law being on the tenants side my case was sufficient enough to be awarded half my claim where the law said I was entitled to nothing.

Adding 10% to a lightbulb could, in the eyes of the adjudicator, be the difference between a professional PM doing their job and a money grabber trying to take advantage. Weigh up each additional expense on its own merits. As I’ve pointed out a ban on letting fees will cover most if not all of your additional expenses on its own. The adjudicators know this already so test them at your peril.

[Sharon]

but therin lies part of the issue. Before ban on letting fees is considered the inconsistencies around other types of fees and charges requires due diligence. In the Auck TT (and as you correctly point out) Sec 85 is used as flexible tool including the overriding Sec 17.
In Hamilton TT forget about a PM charging 10% recovery fee for light globes as per Sec 17 yet using an Electrician is fine so you get the ludicrous situation of extra cost. Nobody questions the Electricians invoice, travel charge or materials yet when a PM/LL seeks to recover fraction of those costs its consider a money grab. Likewise it is deemed (in your world) ok to charge a tenant breaking FTT that the Meth test company gets paid, the advertising company gets paid, the credit check company gets paid and if the house isnt left tidy the cleaner gets paid.
But heaven forbid the PM charges any of their time or travel costs its considered an outrage.

[Learning]

I can see the adjudicator’s point of view. Most PMs are not cleaners, electricians, gardeners, painters or any of the other multitude of jobs PMs takes upon themselves beyond managing properties. “A jack of all trades is a master of none.” That’s why the appropriate invoices from the appropriate professionals get more respect. You’ve got 200 properties to look after. You haven’t got time to wear every hat and do all the jobs justice. If you need to claim for these, claim them at the rates of a novice. In keeping with the level of expertise the adjudicator assumes you’ll have.

As for the PM’s time and travel, that is your job. It’s what your clients are paying you for. Final inspections, advertising, showing perspective replacements and credit checks would be charged at the end of a fixed term so they’re not additional expenses. A portion for the inconvenience of timing and anything above and beyond is fair game. Claim costs like a money grabber, expect to be treated like one.

Fair and reasonable costs is what the adjudicator is looking for. Offer them that and your success rate will be above average. No guarantees. It is a kangaroo court after all.

[Sharon]

sigh, point was one of consistency around the fair and reasonable invoices between different TTs. There are some PMs that do call an electrician to change the light bulb. Yes those invoices do earn more respect at TT but not in the real world. Some owners pay for PMs advertising, final inspections, travel and if a FTT is broken extra visits are required where the owner generally seeks recompense.
All seems fair and reasonable.

[Learning]

at TT but not in the real world.

This is where you’ve gone wrong. In Tribunal you are no longer in the real world. You’re in the adjudicator’s world. 😝

My first TT hearing was about eight years ago and I learned then that common sense has little influence in that court.

[Sharon]

and if read my thread was exactly point. Doesnt mean shouldnt be challenged or discussed.
Not many owners are prepared to pay sparky to replace the light bulb barring yourself. If tenant has also removed the door stops, smoke alarm, left bag rubbish behind, nicked the batteries from remote, done a runner with rubbish bins there can be cost savings and efficiencies dealing with it on the one site visit by the PM within an hour or so.
Few PMs want to get involved in long or labor intensive repairs but likewise these small issues constantly arise and with PM on site some will be prepared and act then and there while others follow your script : Arrange Electrician replace missing light bulbs, arrange cleaner remove rubbish bag, wipe bench, arrange builder replace door stops. Some even have a specialist company that only do smoke alarms! Guess which option works out the most expensive & time consuming, guess who is left unhappy.
But hey no problem, all invoices fair and reasonable & the PM didnt charge for time or travel.

[Learning]

For the spattering of minor issues you’ve just described few of the two property DIY LL’s like myself, would bother with Tribunal. Half a day out of my regular 9-5 for a roll of a dice with an adjudicator, over $200? My time is more valuable to me than that.

[Sharon]

For sure, but again key point been missed amid wholesale contradictions.
On the cards RTA up for review - including letting fees and longer term tenancies.
Hopefully PM firms and Landlord groups can promote new ideas and concepts around all sorts things without being labelled money grabbers. Wont hold my breath though.

[SimonW]

My sister in law has recently put in an offer to buy her own home which was accepted and she is currently going through her due diligence. Should the offer go unconditional, she will be putting in notice with her property manager to terminate the fixed term tenancy on the apartment she currently rents (a 2 year term ending in December this year).

I had a look at her tenancy agreement. Her property manager wants a 'break fee' equivalent to one weeks' rent + gst, plus she is liable for all rent up until a new suitable tenant moves in. Furthermore, if the new tenancy agreement is signed at a weekly rate which is less than what my sister in law is currently paying, she is bound to make up the difference until the end of her original agreement.

The last part seems particularly harsh to me (even though I am a landlord myself). There is the worry that the property manager may take weeks to fill the vacancy which is bad enough. But even worse, they could seek to fill the vacancy quickly by slashing the rent, leaving my sister in law to be liable for a significant weekly payment due until the end of her fixed term - December 2018 - in addition to a hefty mortgage.

Weighing it up, it's clear the short term pain of double payments will be worth it for her, but very taxing nonetheless.

[Keys]

Does her tenancy agreement allow for the fixed term to be broken if she pays the break fee?

If it does, then she is on a periodic tenancy and does not need to pay any fee.