Does your PM charge commission on water rates money collected

[donkey]

This year my PM has been charging me ('management fee') commission on the water rates money collected from the tenant. Is this legal according to NSW legislation? It is displayed as 'item 1 water use' and appears under the rent received figure. They have been adding the 2 figures together and then hitting me with the commission each month

If your IP is under management please share your current situation in this regard.

thanks

 

[EN710]

Yes, has always been with current NSW PM, and clearly mentioned under the new PM agreement.

Payment towards water seems to be regarded as rent received? I'm not sure whether it's legal - I care more whether they're great PM or not.

 

[Propertunity]

If you actually read your PM agreement, it probably says they are entitle to a % com on "all monies received". This can include water, and even insurance payouts if you get LL insurance thru your PMs agency.

It's legal if that's what you signed up for.

Personally, I pay my own bills and get rewards points on my CC - so not in your position.

 

[EN710]

Personally, I pay my own bills and get rewards points on my CC - so not in your position.

I find that most bill will charge me % out of the cost if paid using credit card, do you have a way to get around it?

 

[Salvatore1]

I have not heard of a PM charging for water usage collection. I never have for 11 yrs. Need to do something for my Management fee. I have also heard some PM are now charging $15 for EOFY statement, charge you for writing a cheque, $15 to do a TICA or TRA check, up too $33 to draw up a new lease. Be careful on agents offering cheap management fee, check the whole agreement for all the other costs.

As for being charged for using your visa or mastercard it is a growing trend by many many companies, need to go back to paying by cheque.

 

[travelbug]

If you actually read your PM agreement, it probably says they are entitle to a % com on "all monies received". This can include water, and even insurance payouts if you get LL insurance thru your PMs agency.

It's legal if that's what you signed up for.

Personally, I pay my own bills and get rewards points on my CC - so not in your position.

It doesn't make any difference if you pay the bills yourself.
What the OP is referring to is the money that the agent collects from the tenants for water usage. Not for bills they pay. Salvatore- Check the figures on your statement. I didn't think i was paying it but YEP I Am.

 

[Salvatore1]

I am actually a PM and never charge any of my landlords for water usage collected.

 

[Jaggannath]

I have not heard of a PM charging for water usage collection. I never have for 11 yrs. Need to do something for my Management fee. I have also heard some PM are now charging $15 for EOFY statement, charge you for writing a cheque, $15 to do a TICA or TRA check, up too $33 to draw up a new lease. Be careful on agents offering cheap management fee, check the whole agreement for all the other costs.

As for being charged for using your visa or mastercard it is a growing trend by many many companies, need to go back to paying by cheque.

I don't pay it for either of my properties. The one in ACT I pay a reasonably high management fee I think, and I told them for that price I wanted pretty much everything included, which they do.

In SA we don't pay that either, again it's part of the management fee, so I agree with you Salvatore.

 

[DaveM]

None of my PM's do. THey charge % on rent received, not on rates or repairs

 

[Ed Barton]

I am actually a PM and never charge any of my landlords for water usage collected.

I imagine collecting water usage charges is more time intensive than just collecting rent. For starters you have to review the bill, calculate how much is the tenants portion and then send a bill to the tenant - every three months. I also think tenants are more likely to be recalcitrant with water bills, even if they're a decent rent payer - leading to the PM spending more time chasing the bill.

I'm not averse to paying an agent to bill the tenant for water. Having said that, it's so common these days that perhaps it should be included in the man fee.

 

[BMan]

I imagine collecting water usage charges is more time intensive than just collecting rent. For starters you have to review the bill, calculate how much is the tenants portion and then send a bill to the tenant - every three months.

a simple excel spreadsheet could do that in a few minutes

 

[luckyone]

I imagine collecting water usage charges is more time intensive than just collecting rent. For starters you have to review the bill, calculate how much is the tenants portion and then send a bill to the tenant - every three months. I also think tenants are more likely to be recalcitrant with water bills, even if they're a decent rent payer - leading to the PM spending more time chasing the bill.

I'm not averse to paying an agent to bill the tenant for water. Having said that, it's so common these days that perhaps it should be included in the man fee.

It must be different in other states, because in ACT it's very easy. Water usage is on a single line on the bill, so there's not calculation involved. I'm sure all they do to collect it is send an email to the tenants with that amount and a please pay note. Not too hard!

 

[Scott No Mates]

a simple excel spreadsheet could do that in a few minutes

Inefficient Bman. When you are running a business you do not want to introduce another system that the pm has to operate. They are already working in console or rest which have functionality for water usage and other charges. They do however need to put both the service and usage charges into the system as well as provide a copy of the bill to the tenant. It only gets hard if the rate has changed mid period and they need to put in two usage charges or have had a change of tenant.

 

[Nikoletta]

This year my PM has been charging me ('management fee') commission on the water rates money collected from the tenant. Is this legal according to NSW legislation? It is displayed as 'item 1 water use' and appears under the rent received figure. They have been adding the 2 figures together and then hitting me with the commission each month

If your IP is under management please share your current situation in this regard.

thanks

I've never charged for paying water usage or any other invoice on landlords behalf, however, have heard that some companies have a set fee for paying those expenses, however, never heard of charging management fee on it.

If you are aware of such charges and happy to pay for those, that is completely fine, what I would be more careful with is receipting it as rent received, make sure it is clearly separated from the rent on your end of financial year statements as it is a reimbursement only (you probably pay the full bill) and not a rental income

 

[alatus]

No, none of my 3 PMs (2 NSW, 1 QLD) charge for that.

 

[travelbug]

I've never charged for paying water usage or any other invoice on landlords behalf, however, have heard that some companies have a set fee for paying those expenses, however, never heard of charging management fee on it.

If you are aware of such charges and happy to pay for those, that is completely fine, what I would be more careful with is receipting it as rent received, make sure it is clearly separated from the rent on your end of financial year statements as it is a reimbursement only (you probably pay the full bill) and not a rental income

It is not a charge for paying bills such as water rates etc for the landlord. And I agree there is not usually a charge for paying these.

What the OP is referring to is the charge is for collecting money from the tenants for the water usage part of the bill. So it's counted as "money collected" by the agent.

 

[Xjas]

what I would be more careful with is receipting it as rent received, make sure it is clearly separated from the rent on your end of financial year statements as it is a reimbursement only (you probably pay the full bill) and not a rental income

Curious as to why that would make a difference?
I would have thought water useage recovered from the tenant would be considered income regardless, but since you would claim the whole water bill including the usage as an expense the net effect of the usage would be zero anyway. Happy to be corrected if I've got that wrong.


I have one PM that charges a percentage of water usage and one that doesn't.

 

[Scott No Mates]

Cynically, unless you're an accountant it makes no difference....

You are still offsetting the expense against the income and the amount in your pocket at the end of the day is no different

Unless you're borrowing to pay the expenses there is no difference.

 

[Nikoletta]

Curious as to why that would make a difference?
I would have thought water useage recovered from the tenant would be considered income regardless, but since you would claim the whole water bill including the usage as an expense the net effect of the usage would be zero anyway. Happy to be corrected if I've got that wrong.


I have one PM that charges a percentage of water usage and one that doesn't.

I'm not an accountant, it is just my preference to keep the accounts tidy for my properties and for others. I might be too particular about it but I would not want to see a reimbursement as rental income.
As an agent I also don't think that it is a huge additional task to recover water usage but again, this is only my personal opinion and it may depend on the software/particular system used by the office.

Regardless, the OP is a great reminder to make sure you know what you sign and read the fine print and as long as it suits your needs, brilliant.

 

[travelbug]

I can't see why you would think it would be a receipting issue?

Of course your monthly invoice would state it is for water usage.

Otherwise the amount of rent the tenant owes would not add up.

But When transferring to my spreadsheet I just lump it in with rent (money in, as others said, makes no difference tax wise).