A couple of years ago, we short sold the bubbly Sydney residential property market and started renting. We hadn’t rented in decades and negotiating as a tenant has been an eye opener. Our recent renewal negotiation went completely pear-shaped, as I’m about to explain.

It started with the agency’s peculiar modus operandi. All communications were via email with at least eight people cc’d, including the principal, together with all the property managers. The owners were also bcc’d.  It was a crowded address header to say the least and under the guise of ‘transparency’ – their words.

In early October, the email lands - your lease expires on such and such a date; what are your intentions? Should you wish to renew, please advise the rent you are prepared to pay and the length of the lease.

We had tenanted the property, a tri-level townhouse, for multiple years, paying a good sum of money on time, every time. Not only that, we were ‘low maintenance’ tenants. For example, we didn’t complain that the air-conditioning had never worked.

But the place was getting tired and there were some water leaks that worsened a longstanding mold issue (in fact, shortly after the renewal email had arrived, the owners were quoted $10,000 to repair the walls and membrane).

However, my daughter had her end of year exams coming up, smack bang in the middle of the termination period, so it was in my family’s interests to stay. Also, summer had arrived, and we could enjoy the roof terrace after heavy rains.

I felt that a modest (token) reduction of $50 per week on what we were paying was warranted so I telephoned my designated property manager and advised our intention to renew. I mentioned how rents were coming off the boil and with the mounting maintenance issues I tried to sound out the owner’s likely reaction if we offered $50 per week less. I didn’t want to offend, even though I had based my offer on legitimate and objective standards.

Without giving anything away it was immediately suggested that, you guessed it, I email the offer, including the examples of the lower rents that I had mentioned during our conversation. I thought it was the agent’s job to know the pulse of the market, but I kept with their program and emailed the rent comparisons and my offer, $50 per week lower on existing six-month term.

It’s difficult negotiating with a crowd, by email, so I kept my interests to myself and without any heads up, guessed theirs. 

A week or so passed and an email reply stated that the owners would sign a 12-month lease for $50 per week higher rent. Maybe I’d over-emphasized the problems and the owners had decided to kick us out to complete a much-needed overhaul. Why would they do this with Christmas around the corner? They’d be hard-pressed to get tradesmen in. Who doesn’t want good low maintenance tenants who pay on time? There were many ‘why questions’ to try and second-guess.

I immediately telephoned the Property Manager and asked outright if the owners wanted us out. It sounded like it, if they’re countering with higher rent plus double the term, right? I was assured that this wasn’t the case. I tried again to understand the owner’s underlying interests but was advised of nothing other than ‘put it in writing’.

So, I countered with the same rent I was paying, for nine months, without the requirement to finally fix the air-conditioning.

Another week or so passed and the day before the actual lease expiry, we were issued with a 30-day notice to quit. We were being unceremoniously turfed out. We could leave earlier of course and pay rent only up to the day we vacated.

The next few days were a mad scramble to find new digs, which we managed to secure, a penthouse with marvelous views, at $250 per week less rent than we were paying!

We started packing and lo and behold we receive an email advising of an open for inspection (for new tenants) the day before our removalists arrived. The property would be made available for new occupancy. So they weren’t going to do any remedial work after all. They wanted to keep it tenanted. Wow, did I misread that. 

The following week, the agency advertised the property at a weekly rent $75 higher than what we were paying. It’s been a month since we moved out and the place remains empty. The asking rent has since dropped to $50 higher than what we were paying and now it’s $25 higher. They are already out-of-pocket on more than a month’s rent (2+ years’ worth of the weekly increase they were seeking) but also on the cost of the air-conditioning units they had to install to get it working together with other patch-ups.

I’m writing this blog overlooking a beautiful bay in the harbor with boats bobbing. They ended up doing us a favor, pushing us out of our complacency, although it certainly didn’t seem that way at the time.  What could have been a win/win outcome turned out to be win/lose.

Lessons learned

• Email heightens position taking, emphasizes one’s stated wants, and establishes us versus them mindsets. This is especially so when there’s multiple parties involved (including the owners).
• From the agent’s perspective, compromise appears like backing down in front of their clients and saving face becomes paramount.
• It is uncomfortable revealing your interests to a crowd, especially by email; it’s not the right medium to open-up the conversation. A more private one-on-one forum is required.
• Email is clumsy and keeping up with all the threads became an ordeal to track and piece together who said what.
• It is very easy to misread intentions. I’m a trained negotiator and I got it all wrong.
• Without understanding and communicating underlying interests, the conversation never developed to the level required to engage and problem solve.
• We had mutual interests – the owners wanted the property leased through the Xmas period, and we wanted to see things through the exam period – yet without “telling, listening and communicating”, we failed to advance to the stage of inventing options for mutual gain.

Finally, I later discovered something surprising. One of the owners was a medical doctor who was party to all the written communications and knowingly patched up the mold problem and jacked up the rent. I would have guessed that, in this case, reputation was a #1 interest, but there you go, I got that wrong too. 

And, yes, of course, we should have used Guided Resolution’s online platform. Woulda, coulda, shoulda…