Forums / Property Investing / Help Needed! / Issue with Property Manager

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  • Profile photo of panno24panno24
    Participant
    @panno24
    Join Date: 2010
    Post Count: 15

    Hi all,

    As i mentioned in my previous post, one of my ip's has recently become vacant. This came about by the previous tenant breaking the lease agreement and leaving without paying any further rent. They left behind furniture and quite a mess in. I was alerted to this by my property manager when they first become aware, and they told me they would be in touch when thye get a date with the tenancy tribunal.

    Two weeks passed without a call, so i rang them for an update. They said that they were still awaiting a hearing date and that they would inform me of any changes as the eventuated.

    Two weeks passed again without any contact, so i phoned them again. They then informed me that they had been granted vacant possession of the property and that they employed people to remove all rubbish and to clean the property. They also contracted a handyman to fix any issues to prepare the place to be rented. All of this was done without my consent or without me even knowing.

    I had intentions of cleaning the property myself and disposing of the furniture and rubbish left behind. This would have saved me a significant amount, however I was waiting hear back from them to establish a date on which we would get vacant possession to inform them of this.

    My concerns now are that I wasn't informed at all of any of the changes by my manger, the spending of my money without contact (they only have my permission to spend $300 on emergency repairs). The icing on the cake is that that i recently found out that there was no inspection carried out at the 3 month mark as required. Which was approx 3 weeks prior to the tenant leaving.

    Hope that all makes sense and I would value any advice that could be offered.

    Profile photo of panno24panno24
    Participant
    @panno24
    Join Date: 2010
    Post Count: 15

    The other thing I forgot to mention was that I have signed a 24 month contract with them. Would I be able to leave them short of that time frame now that they have done the above mentioned?

    Profile photo of Jacqui MiddletonJacqui Middleton
    Participant
    @jacm
    Join Date: 2009
    Post Count: 2,539

    Did they get Consumer Affairs in to decide if they were allowed to dispose of the tenant's property?  If not they'd have to be storing it for a while… at your expense.

    Your management agreement, how long was the exclusive management period?  Surely the exclusive period does not say 24mths?

    Jacqui Middleton | Middleton Buyers Advocates
    http://www.middletonbuyersadvocates.com.au
    Email Me | Phone Me

    VIC Buyers' Agents for investors, home buyers & SMSFs.

    Profile photo of panno24panno24
    Participant
    @panno24
    Join Date: 2010
    Post Count: 15

    Hi JacM, 

    Im not sure if consumer affairs where consulted on prior to the disposal of the furniture. I am assuming there weren't as in my PM mentioned the tenant had made contact to recover her furniture and she hoped that she hadn't jumped the gun my getting rid of it. Is it possibly that there would be any implications for me, or does it all lay on the shoulders of my property management company?

    After reading the agreement a little closer now I understand that there are different times that I have the option to exit the agreement, end of lease being one of them. 

    Profile photo of jmsracheljmsrachel
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    @jmsrachel
    Join Date: 2012
    Post Count: 711

    Hi Panno24

    Who is the managing agent and what state are you in? I didn't think it would take 4 weeks to get a hearing date?

    Profile photo of Jacqui MiddletonJacqui Middleton
    Participant
    @jacm
    Join Date: 2009
    Post Count: 2,539

    It is up to the property manager to know the laws and in this case, the rules around the removal of the property assets is one example. This is what you pay them for.  If they mess it up and there are repercussions, the first approach should be discussing the issue with your property manager and the director of the Agency and politely request compensation.  Failing that, have a chat to Consumer Affairs about what steps you should take to recover any costs you incurred.

    Jacqui Middleton | Middleton Buyers Advocates
    http://www.middletonbuyersadvocates.com.au
    Email Me | Phone Me

    VIC Buyers' Agents for investors, home buyers & SMSFs.

    Profile photo of panno24panno24
    Participant
    @panno24
    Join Date: 2010
    Post Count: 15

    Hi Joe,

    Its just a small property management/ real estate agent company in Adelaide. I also live in Adelaide. This my first experience with such a thing since buying my first properties last year. I might have been a little sooner then for weeks as in that time they attempted to notify the tenant to bring the property back to standard. Which I believe gave them a period of 7 days  to do so

    Profile photo of jmsracheljmsrachel
    Participant
    @jmsrachel
    Join Date: 2012
    Post Count: 711

    I agree with JacM, contacting consumer affairs. This is really slack on their behalf. 

    Profile photo of panno24panno24
    Participant
    @panno24
    Join Date: 2010
    Post Count: 15

    Do you think I should speak with them regarding compensation on them acting without my consent, or just if there is any future issue with tenant and there furniture?

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,018

    One man band or multi agency they are still required to be licensed and be aware of the current legislation.

    I run a 1 man band mortgage brokerage and financial planning firm and would not expect to less licensed or qualified to a firm with 20 partners.

    A phone call to the right Govt Agency could clarify the situation and maybe put your mind at rest.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me | Phone Me

    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of MarySueMarySue
    Member
    @marysue
    Join Date: 2012
    Post Count: 18

    Unfortunately at the moment in Adelaide it can take up to 10 weeks to get to tribunal hearing and in a lot of cases, they'll be in favour of the tenant as the Government doesn't want people homeless.

    The property being cleaned up will come out of the bond, along with the rent that is due – if this amount exceeds the bond, the PM will try reclaim that cost at tribunal.

    Ultimately the tenant will be paying rent on the property until its re-let or the agreement expires.

    Provided your rent is a good price and the property in a good area, it shouldn't take too long to re-let.

    How long was the tenant in the property?

    In SA, routine inspections are done quarterly. Some PMs can overlook this so it's always good to note the date when these inspections should be taking place and make sure you see the routine inspection sheet when it comes in.

    In your situation, I think the PM has done the right thing (minus being 3 weeks late on a routine – however, I don't think this would have prevented the current circumstance).

    There are pros and cons of working with small agencies. The pros would be its more personalised and they really want to keep your business.

    And on a future note, Landlord Insurance would cover things like this and it's tax deductible. Your PM is likely to have the name of a company that offers them good deals in LLI.

    Profile photo of panno24panno24
    Participant
    @panno24
    Join Date: 2010
    Post Count: 15

    Hi MarySue,

    Thanks for the feedback. I wasn't aware that the extra costs could be reclaimed from the tribunal, this is some thing that I will have to discuss with them. I do have landlord insurance however my manger seems to think that after the insurance claim has gone through and the bond has been used up, I will still be out of pocket. Albeit only around $400.

    Im sure it was with best intention that they acted on getting the place back up to scratch ready to be re tenanted, however I would have like to be consulted prior to this. I guess I need to be a little more pro active and take more control of situations like this in the future. Instead of waiting for them to contact me I probably should have made my intentions clear at the start.

    Profile photo of MarySueMarySue
    Member
    @marysue
    Join Date: 2012
    Post Count: 18

    Hi Panno,

    I read over your post and put it together that it took 4 weeks for the property manager to get possesion of the property?

    And your last post about being out of pocket $400 after all the bond and back dated rent…?

    If you want to speak with Consumer Affairs:

    http://www.sa.gov.au/subject/Housing,+property+and+land/Customer+entry+points+and+contacts/Contacts/Consumer+and+Business+Services+contacts#CBS_tenancies_branch

    Profile photo of panno24panno24
    Participant
    @panno24
    Join Date: 2010
    Post Count: 15

    In total there will be approximately 7 weeks rent owing to me at this time, which will be covered by the LLI, then there is the bond of 4 weeks, The expenses will use up all of that with a shortfall of $400 after that. 

    Cheers for the link MarySue

    Profile photo of PEACHYPEACHY
    Member
    @peachy
    Join Date: 2004
    Post Count: 78

    Hi Panno,

    I have learned in the past year that when things go wrong, PMs need to be managed. Tell them exactly what you want to happen, make them run ANY out-of-the ordinary costs by you first before going ahead and also ring them every single day until you get the desired result. It is annoying but it covers all bases and gives you more control. Otherwise you are leaving everything to their best judgment which can be costly.

    Also always check the notice period before signing a management agreement. We only agree to 30 day termination notice periods from our end and now even this has come to light as too long. I plan on giving notice to all of our PMs and re-signing them with less notice (I am thinking day by day rollover if that is possible)? If they don't like it then there are other agencies lined up to take over the management. The ball is in your court with that one.

    I hope you have better tenants next time!

    Peach 

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