Not passing on rent

[outhouse]

Hello!

I have had a couple of instances where rental payments by my otherwise regular tennants has missed a cut off date by 1 or 2 days.

For example, the agent collects 2 payments each month. The second should be at the agent by the 30th for example. The agent does a 'check run' on the 1st or 2nd.

Now of course, the agent is not going to give me the missing rent, but in my case the tennant has come in and payed promptly on the 1st or 2nd. Now i feel that in this instance, the agent should get there act together, and pay that missing rent into my account ASAP after they get it.

Instead, they hold onto that rent that is owed until the next cheque run at the end of the month. So effectively holding onto missing rent for 3.5 weeks.

This is simply wrong as far as i can see. I run a tight account with outgoings, on the IP coming from the same account as the rent going in and when this happens it really messes my account keeping up.

I should add that on instances before, the agent has actually charged me bank charges!! their bank charges!! This makes this situation even worse.

How would they like it if i charged them interest on the missing rent for 3.5 weeks!

Basically, what is the legislation on this. Is it just an agent thing or is this what they are allowed to get away with??

thanks

 

[Perp]

I understand that it's frustrating, but I don't think it's reasonable to expect the agent to pay accounts any other time than when they agreed they would do it. If they made a special payment to owners for every tenant who paid late, they'd be doing accounts every day of the month, I would think! Twice a month is better than many agents; most agents I've dealt with only make payments monthly. I'd be annoyed with the tenant, not the agent.

If you're cutting things this fine, I'd also be re-examining whether you can afford an investment property. What if the HWS dies, or the roof is leaking, or a pipe bursts? Perhaps you could refinance your property so that you have a buffer in a LOC. I would think that even for a very modest investment property you should have at least $5K buffer available for "rainy days".

 

[callander]

Running a payment is no big deal and only takes a minute or two. We pay out to our owners at least twice a week. if an owner called and needed money asap we pay them. we do not pass on any bank charges however we do charge a statement fee to help cover bank charge, postage etc. of $2.20.

A lot of agents in our area only pay once or twice a month, i think the reason behind this is that the day to day staff dont handle the landlord payments and the person who does is often only in the office on a part time basis so no one else knows how to make the payments.

Make a call and question why they are unable to pay you when the tenant has paid and check in the information that the agent provided to you when you signed up with them. If they said you would get paid twice a month (and didnt specify set dates) then they have to pay you twice a month regardless. It shouldnt be a big deal.

 

[outhouse]

I understand that it's frustrating, but I don't think it's reasonable to expect the agent to pay accounts any other time than when they agreed they would do it. If they made a special payment to owners for every tenant who paid late, they'd be doing accounts every day of the month, I would think! Twice a month is better than many agents; most agents I've dealt with only make payments monthly. I'd be annoyed with the tenant, not the agent.

If you're cutting things this fine, I'd also be re-examining whether you can afford an investment property. What if the HWS dies, or the roof is leaking, or a pipe bursts? Perhaps you could refinance your property so that you have a buffer in a LOC. I would think that even for a very modest investment property you should have at least $5K buffer available for "rainy days".

The agent does NOT pay twice per month, that is the issue. The agent only pays once per month, on the 2nd or 3rd. That is why it pisses me off. They hold onto any rent they get in the first week (that should have been paid by the tennant in the last week of the previous month) for 3 weeks.

Major repairs are NOT a problem, and money can be shifted from other deposits. I dont like keeping cash in accounts that pay less than .25% interst. Simple.

I dont see why i should fund the agents account, and they make interest on my cash. As the other post says, it takes 10 minutes to make an additional payment by tha agent.

I have come to the conclusion that there is a major business opportunity here to improve what is pretty bad service from agencies across NSW.

 

[Pushka]

Yep, think you will find in the small print of the contract that what they are doing is OK. Ours only pays monthly too and while tenants have not been late, if they did miss the cut off date I am betting we wont see it for a few weeks either. SA based.
To be fair, while it only might take 10 minutes to do yours, they do then need to re-issue the rental statements, deposit the money etc etc and if half of their clients had this occurring each month, well, that does increase the time hugely.

 

[evand]

Happens to me as well and i have no problem with it.

I think its a pretty standard procedure in the industry.

When the PM is dealing with hundreds of landlords it would just be too time consuming to do otherwise.

If its affecting your cashflow maybe you should look at fixing that rather then blaming the PM. Possibly put a larger float (buffer funds) of a few grand in the account.

 

[outhouse]

I do have aproblem with it. There is a float, that is not the issue.
It's the fact that they are withholding rental (my money) that has been paid to them by the tennant. I want it in my account, simple.

Who said i was 'blaming' the PM. The initial question was about legislation. It seems to me that most PM's cant be bothered to do it, as they know its just 'too hard' and its easier to do it all in one go.

With the technology today, there is no reason why a payment can not be done via a wire transfer etc.

 

[Perp]

They hold onto any rent they get in the first week (that should have been paid by the tennant in the last week of the previous month) for 3 weeks.

...I dont like keeping cash in accounts that pay less than .25% interst.

It's obviously all a conspiracy! At $300 per week, by holding onto it in their account for 3 weeks, they earn $300*0.0025*3/52 = 4.3 cents in interest. What a con.

 

[evand]

Outhouse, don't sweat the small stuff mate. You need to look at the bigger picture if you want to be successful.

Just pay the PMs what you need to, let them deal with your properties and don't get stressed about a few bucks.

Just my advice, of course you dont have to follow it.

 

[outhouse]

Outhouse, don't sweat the small stuff mate. You need to look at the bigger picture if you want to be successful.

Just pay the PMs what you need to, let them deal with your properties and don't get stressed about a few bucks.

Just my advice, of course you dont have to follow it.

I know what you mean exaclty..lifes too short right!! Good advice!!
It just the principle, and it bugs me, but there is not really a great deal i can do about it!!

I think i will get off the soapbox!

 

[Perp]

Great decision, outhouse.

 

[tubs]

Running a payment is no big deal and only takes a minute or two. We pay out to our owners at least twice a week. if an owner called and needed money asap we pay them. we do not pass on any bank charges however we do charge a statement fee to help cover bank charge, postage etc. of $2.20.

I agree with you. This has happened to me sometimes, where a tenant has not paid on time. And the agent never had a problem doing a one-off payment to me if I asked them nicely.

If it continues to be a problem, maybe get the agent onto the tenant to make sure they pay on time.

 

[JoannaK]

I dont see why i should fund the agents account, and they make interest on my cash. As the other post says, it takes 10 minutes to make an additional payment by tha agent.

I'm sorry, but you are incorrect here.

Agents DO NOT earn interest on rents they hold on behalf of landlords, that is the nature of RE trust accounts.

AND, processing a payment does not only take 10 minutes. If an agency has 200 properties on a rent roll, and they all want payment as and when their rent is paid by the tenant, then it would take hours each time.

There are certain processes, and procedures and reports that need to be produced and legislative requirements that agents need to fulfill each time they process payments to landlords, and to expect an agency to do that on a weekly basis is simply uneconomical and unreasonable.

If you want access to your rent immediately then perhaps you should consider self managing your property as an alternative.

 

[jaycee]

I'm sorry, but you are incorrect here.

Agents DO NOT earn interest on rents they hold on behalf of landlords, that is the nature of RE trust accounts.

AND, processing a payment does not only take 10 minutes. If an agency has 200 properties on a rent roll, and they all want payment as and when their rent is paid by the tenant, then it would take hours each time.

There are certain processes, and procedures and reports that need to be produced and legislative requirements that agents need to fulfill each time they process payments to landlords, and to expect an agency to do that on a weekly basis is simply uneconomical and unreasonable.

If you want access to your rent immediately then perhaps you should consider self managing your property as an alternative.

The rent rec'd from my PM was extremely low one month, I rang & asked them, they explained the tenant was late paying, but it would be fixed within a few days. I asked when I would receive that money and was told next month, unless I wanted to send them an email/fax asking for a special payment which would get done mid month.. Did this & got paid the rest if the rent before the mthly mortgage payment was due./

Like outhouse, I see no reason why I should keep more money in a low interest bearing account than I need to.

Seeing as myself, Tubs & at lest 1 other person has been able to get their PM to pay them this way (regardless of the amount of time it takes for the PM to process, or the number of properties on their books as alluded to by Joanna K), it seems that PMs can do this and it just depends on their so called "policy" whether they will do this or not… and unfortunately, their so called "policies" seem to depend more & more on the level of basic knowledge the staff member you are dealing with has

No need to to move to self management for this, just need to find a reasonable PM by the sounds of things !

 

[Perp]

jaycee, whilst there are PMs out there who will do it on request, we have to be mindful of the fact that it does increase the cost of doing business for the PMs. And no doubt the same people who are unhappy when they don't get their rent immediately would also complain if property management fees were raised, or if the PMs eliminated some other service to compensate. We can't have it all ways.

 

[redsquash]

I do have aproblem with it. There is a float, that is not the issue.
It's the fact that they are withholding rental (my money) that has been paid to them by the tennant. I want it in my account, simple.

Who said i was 'blaming' the PM. The initial question was about legislation. It seems to me that most PM's cant be bothered to do it, as they know its just 'too hard' and its easier to do it all in one go.

With the technology today, there is no reason why a payment can not be done via a wire transfer etc.

you are dead right.
Tell the agent you want payment made twice a month.
With the automation involved it should rarely be a big deal.
I think all your response to posts were correct.
It not a matter of ignoring the small stuff. Its a matter of agents doing there jobs properly and efficiently for the 7 0r 9% they mostly earn for collecting rent 98% of the time.
As a group I find them atrocious.I wish I would never need their services.
Within that group I have also found a few very nice hard working people

 

[dreaming]

Great thread guys, I didn't realise so many of you only got paid monthly, mine gets paid twice a month into an offset account. I think the main thing is if they are taking care of all the grief for you and getting the rent they are worth it. A couple of dollars over a couple of properties is nothing compared to the damage my kids can do to my wallet in no time at all.

 

[Novar]

I've just changed agents and the new one does rent twice a month too.
Might be the new thing, until now, I've only ever gotten monthly.

 

[padfoot22]

What difference does it make if you get rent twice a monthly or once a month. It's more important that you get it on a regular basis. That way you can plan your cashflow accordingly to fit with when expenses vs rents are due.

 

[dreaming]

You're right Padfoot, going in is most important but I do like it sitting in my offset account rather than somewhere else that isn't helping me out.