Negligent PM. What can be done?

Bargain Hunter

Bargain Hunter

Hi,

I need some help.

We have been having trouble with one of our PM's lack of statements, shortfalls in payments, and therefore not knowing exactly what is going on...

The short of it is that it appears that a number of tenants haven't been paying but as we have no statements we couldn't see what was going on... repeated requests for statements have fallen on deaf ears.

One of the people in the office (not the PM) has checked and it appears that at least one of the tenants hasn't paid a cent since October, and there is no record of a termination letter being sent.

This is more than incompetence, this is negligence. What recourse do we have against this REA and the losses caused by their PM?

Who do we take these complaints to for action?

Regards

Andrew
 
If no rent has been collected since October you have no-one to blame but yourself.

I use property managers. I manage them. Sure they have processes to follow up rents. But out of mind out of sight. Why did you not call them till now.

<<<<<This is more than incompetence, this is negligence. What recourse do we have against this REA and the losses caused by their PM?>>>>

You can share the blame here too. You let it get to this stage.
 
toony said:
If no rent has been collected since October you have no-one to blame but yourself.

I use property managers. I manage them. Sure they have processes to follow up rents. But out of mind out of sight. Why did you not call them till now.

<<<<<This is more than incompetence, this is negligence. What recourse do we have against this REA and the losses caused by their PM?>>>>

You can share the blame here too. You let it get to this stage.
Click to expand...

Toony, Andrew had been calling them, following up and asking for statements, and finally contacted the Agency head. Andrew is asking for help. IMHO blaming will not get the problem fixed.

Andrew, you need to work out a strategy to solve this problem. My suggestion (and others, I'm sure will contribute theirs), is to:
1. Find out what the legislation states in terms of getting your rent.
2. There will be procedures to be followed, and I would follow them to the letter.
3. Get a new PM. (If not sure who would be good in your neck of the woods, post a request to this forum.)
4. Follow up with the PM whenever anything is a couple of days overdue...like the rent cheque.
5. Make sure you check your bank statements for incoming rent every month.
 
Bargain Hunter,

You could probably sue for breach of agency (contract). It is likely you will be awarded ordinary or general damages amounting to the losses you have suffered due to the breach of contract. It may be worth an initial phone call to a solicitor.

I'm assuming you have sacked this agency and are taking measures to retrieve the back rent or evict the tenants so I won't go there.

Cheers
Nat
 
If i was in that position and did continually not get replies from the property manager i would terminate ASAP and go to the rental agency up the road to employ as my new property manager.

In my view, i dislike all this talk of suing and negligence. At the end of the day, property managers are your agents and acting for you. If the tenants dont pay the rent, the property managers can try and get it. Some are more successful than others.

Find a successful one.
 
toony said:
At the end of the day, property managers are your agents and acting for you.
Click to expand...

Thats right - so if the agent breaches their agreement (a legal contract) and causes losses for you, you have the right to sue for breach of agency to retrieve the money off the agent. It is not negligence, as negligence is a tort which breach of agency is not, so you can't sue for negligence, only breach of agency.

From the information given, I don't even know if the agency is in breach or not - that is why he would need to speak to a solicitor. Certainly, if the back rent is recovered from the tenants, he would probably not be able to then take the agent to court. I say probably because sometimes the courts may award damages to an injured party even if no losses are incurred, as a "punishment" to the wrongful party.

Certainly the easiest thing to do would be to try and recover the rent from the tenants and evict both the tenants and the agent, make any necessary claims on insurance and chalk it up to experience.

Of course, you could always "out" the naughty agent on Today Tonight :p

Cheers
Nat
 
Another thing to consider maybe (?) could the PM be pocketing the rent money from these tenants and telling you they did not pay?
 
Oooh yes - that exact thing happened to friends of mine with their first IP. It took months to sort out and the PM is still in business :mad:
 
toony said:
If no rent has been collected since October you have no-one to blame but yourself.

I use property managers. I manage them. Sure they have processes to follow up rents. But out of mind out of sight. Why did you not call them till now.

You can share the blame here too. You let it get to this stage.
Click to expand...

Sheesh, you don't mince words do you. I'll add a little to this.

The problem is my fault. Whilst not working I actively managed the managers. This one requiring a little more work than the others, but I was quite happy doing that as I got other things of value from this agency, like unlimited access to RPData whenever I wanted, so considered this a small price to pay.

However, I have now rejoined the workforce:( to help pay for our costly sporting fees this year (notice I haven't been able to post as frequently). This has meant that I haven't been able to go to the Agency during Business Hours (which is the only way you get action as they are very slack with returning phone calls). Since I used to go there on average about twice a week I was able to keep things running smoothly.

We have been getting money credited into our bank account, but no statements, so we don't know which tenants have paid & how much, nor do we know if expenses have been paid (ie rates etc). The weekend staff are of no help.

One of the weekend staff tried to access the system for us & this is when we discovered that one of the tenants hasn't paid anything since October (around the time I started work). We don't know how accurate this info is, but the amount of $$ credited into the bank account would suggest that either it is correct or there has been a lot of bills recently, or all the tenants are slightly behind.

We have moved to another agency, but still have some time with this one as you have to give a month's notice. The main problem I see is the lack of statements so we can see just who has paid how much.
 
skater said:
One of the weekend staff tried to access the system for us & this is when we discovered that one of the tenants hasn't paid anything since October (around the time I started work). We don't know how accurate this info is, but the amount of $$ credited into the bank account would suggest that either it is correct or there has been a lot of bills recently, or all the tenants are slightly behind.
Click to expand...

Skater,

If it's any consolation, I reckon you're doing way better than what we managed to achieve with our PM experience. We went for about a year with not a jot being paid into our account.....it went some of the way to prove to us how expensive holding costs can be for ressy props.


http://www.somersoft.com/forums/showpost.php?p=226534&postcount=14
 
wow that's quite a story. I have had one similar but nowhere near as bad as that one. and still you hold resy properties!! (and so do I, but i often wonder if selling them up, paying the tax and moving on would be better...)
 
Ausprop said:
i often wonder if selling them up, paying the tax and moving on would be better...)
Click to expand...

Exactly.....I do as all.....trouble is, the longer you hang on and keep putting up with the headaches and nonsense like that, the more tax you need to pay.

Maybe taking a year off work to reduce the income levels to a minimum and then offloading them might be the go. Good for the stress levels / lifestyle and dodge most of the CGT....hmmm. :)


Now you know why we sort of take a wide berth with ressy, although that was only one of the planks that formed the cross to bear.
 
skater said:
As I said in the last post. The management HAS been terminated.
Click to expand...

Sorry I thought I was answering the first post.

For yours, I think the Fair Trading Department (in WA I do not know others) might be the one -- save your money. If that does not work, legal action. You most likely win.
 
Hi KissFan,

At present a letter has been sent to the REA stating that we require the status and accurate records by close of business on Friday, or we will be approaching the Franchisor & Fair Trading.

Today I got a phone call to extend this timeline because the PM had set up a meeting with the Principal and had accidentally thrown out the letter with the action items with the junk mail :eek:

You can tell what I'm thinking... #%@%$

We still need to get as much information as possible and make sure that the it is accurate, no mean feat when you consider the circumstances.

In regards to those who say we should share the blame. Hey, it's not the first time I've trusted people and it won't be the last... however maybe my response to move on will become quicker.

Regards

Andrew
 
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