Mgmt Fees - calculated on Gross Rent or contracted rent


I have just challenged my RE agent for a bill a while back where I've noticed that they charged me management fees on a bond payment from a tenant. The payment was not the lodgement of the bond, but actual payment for things that had to be fixed upon their leaving - i.e. expenses I was out of pocket for.

The RE agent answer was the following: "I have confirmed that Gross rental includes ALL collections - water cons etc and anything else we collect from the tenant on your behalf."

I don't believe that the management agreement carries a definition of "Gross Rental" but will check again tonight.

My laymans view is that the term "Gross Rental" would be used to ensure that if rent received is say $400 and the RE agent pays a property bill for me of say $50, they still receive management fees on the $400 - which is fair. If however the RE Agent has passed a water consumption bill to me of say $100 for water consumption of the tenant (which they sometimes do) and the tenant then pays back the $100 to me in the next months rental payment, I don't believe I should be paying fees on $400+$100 of "Gross Rent".

Appreciate others experiences on this.

G'Day Ralph,

That is a new one to me. You will have to have a read of your management agreement. In most cases the management fee would be calculated on the rent collected. Not on maintenance. That's how it is done in Queensland, don't know what they do in other states.

Some of our old agreements have a charge for any major work ie project managing a renovation etc.
Thanks Jason, that seems sensible. I went through the agreement last night (put in place 5 years ago) and remembered that I had put the clarification of "Gross Rental" in there to ensure no ambiguity. In the absence of Gross Rental being defined in the agreement, I looked up dictionary definitions of "Rent" and "Gross" and it's pretty clear that rental does not include ad-hoc re-payment of water bills by the tenant to me, nor bond etc.

Waiting on their response.