The risk of informal agreements… It must be in writing!

When things go wrong, they can go terribly wrong

It often starts out with all parties having the best of intentions.

A landlord who is on friendly terms with their tenant verbally agrees to a new pet, or consents to a room being painted, or out of compassion says that it is okay for the tenant to catch up on rent – without consulting the property manager.

These types of situations are more common than you may think and are fraught with danger if you don’t ensure that it is in writing.

There was a recent court case between Jemmeson and Fisher where the landlord verbally consented directly to their tenant that they could have access to a closed storeroom so the tenant’s son could play the drums.  They also asked the landlord if they could paint and carpet the room.  Without informing the agent, the landlord paid the tenant in cash for the paint and carpet.

Some months later the landlord visited the property and noticed that the tenants had turned the room into a functional bedroom by undertaking major structural repairs of inserting windows, removing doors and inserting a skylight.

The landlord was distressed and contacted their property manager. The property manager gave two options:

1) The tenant had breached the agreement and a notice of termination could be served, or 2) The issue could be dealt with at the end of the tenancy whereby the tenant would have to leave the property in the same condition (allowing for fair wear and tear) as it was at the commencement.

The landlord could not afford to have the property vacant so he allowed the tenants to stay.

Shortly after, due to health reasons, the landlord had to move back into the property and asked the tenants to restore the property to its former condition.  Why? The alterations the tenants had made did not comply with council regulations, which he believed devalued the property and made it difficult to sell.

The tenant had a completely different mindset and wanted to be further compensated for the substantial renovations.

The matter went to court and lucky for this landlord the court member (drawing on his many years of experience, which included the building division of the tribunal) understood that although the room was technically in better condition it did not comply with council requirements.  Instead of the landlord’s $3,454 rectification claim, the tenant was ordered to pay $1200 in damages.

The moral of the story…

·      Always let your property manager communicate with your tenants

·      Always get all agreements in writing

You may have the best intentions when speaking with your tenant; however, your property manager is experienced in foreseeing the possible consequences on what can go wrong. ■

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SHOOT FOR THE MOON!

Tuesday marked the end of the most inspirational course I have participated in.  We have been lucky enough here at DDA to have the choice to participate once a week in working through Stephen Covey’s 7 Habits of Highly Effective People.  I must admit I was sceptical the first couple of sessions, but today I feel like I have been given the power to BE WHATEVER I WANT TO BE!

Each week we worked through one of the 7 Habits:

• Be Proactive
• Begin with the End in Mind
• Put first things first
• Think Win-Win
• Seek first to understand, then to be understood
• Synergize
• Sharpen the Saw
  

Each of these habits gives us the power to work to the ultimate goal of interdependence.

We each have within us the power to go as far as we want to go, or, to limit ourselves.  The choice is ours!  I look forward to putting into practice everything I have gained from this experience.
 As Les Brown said; ‘Shoot for the moon.  Even if you miss you will land among the stars’.


Nadia Mencarelli
Property Manager


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GETTING PSYCHED UP TO BUY

Owning your own home is most people’s idea of security and stability. It means they can put an end to having to move house on the whim of a landlord who has other plans once the lease is up. Financially it’s one of the proven ways to beat inflation, provided the property purchased is well-chosen. But buying a home requires a level of commitment and sacrifice, an ability to defer gratification that doesn’t always marry well with the desire to spend money on day to day consumer items.  Many young people complain that once they’ve paid rent, car payments, phone bill, credit card and so on there never seems to be much left out of the pay packet for saving for a deposit; is it possible, in fact, that they have chosen lifestyle options over future security and are not prepared to make the sacrifices necessary to gain home ownership? Could many of the items they spend on their credit card be done without? There is a lot to be said for not getting used to a spending lifestyle, of learning to save young; once you get used to living up to your income (and often beyond!), it is hard to give up the little extras (new clothes, restaurants, holidays) you have got used to.  Investment-conscious people recognise the difference between an asset and a liability and minimise expenditure on liabilities. Holidays, credits cards, designer clothes and flash electronic gear may be fun but they don’t put money in the bank for saving home deposits, or leave spare income for paying off a mortgage.

Not everyone has the saving mentality but for those that can psych themselves up to save rather than spend usually find that they are in a better position in ten years time than their non-saving peers; they are more likely to be able to afford the good things of life further down the track as well as owning their own home once their equity increases as the loan has been paid off and the property rises in value. Interestingly, because incomes don’t keep pace with inflation, those who rent find themselves spending proportionately more of their income on the roof over their head, which means that in ten years time they are less able to afford the good things of life they weren’t prepared to give up when they were younger.

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Contact us +6 17 3817 6666 | www.daviddeane.com.au