out of rent by 32 weeks!

[karina]

Hi everyone,

Welcome to my nightmare. I have 2 properties in QLD that I have never had problems with, always been rented, ,no tenant problems.

My portfolio has grown quite rapidly over the years and I have a fulltime job so don´t really get the time to check my rental statements very often.

Was filling a couple of weeks ago and noticed that I had not received rent on both properties in QLD at $200.00 per week for over 13 weeks each , ouch!

rang the agents to find out what was going on, why I had not received a call, was there a problem? why were my tenants not paying? they knew NOTHING, they could only say that they would call them to see what was going on? I was slightly pissed off as you can imagine. I later found out that 3 people including the supervisor had been fired from the property management dept for not doing there job.

So tenants have now been kicked out and I am out of rent $6400.00 in total due to incompetant property managers and the real estate owner says he can´t afford to wear the cost.

No I didn´t have landlords insurance, didn´t think I needed it these tenants had been in the properties for years and never caused me a problem.I guess nobody asked them for money so they didnt pay it. The debt collectors are after them but that is too little too late and I may not see any of it.

Not happy ....any suggestions?

 

[Peter 14.7]

You obviously have a claim against the Agents for professional negligence. They say we are experts at managing property and have stuffed up.

Your losses plus interest plus costs in dealing with the matter.

I would be very blunt in what you expect ASAP direct to the principal and get a written agreement that they will pay back over a period to allow then cash flow assuming agent is solvent.

If they say no, change agents, get on the REIA or what ever and consumer affairs ASAP.

There is no grey area here.

Peter 147

 

[karina]

No I don't have a claim in as yet. I spoke with the principal today who said he does not have the money to wear the cost and tried to cover up that they have stuffed up. that really pissed me off even more.

I told him that one of the property managers had told me not to worry that I would not be out of pocked $1.00 and he just turned around and said that is the property manager prepared to wear the cost himself because he can't afford to.

He said they will do everything they can to recover the money from the tenants..if I change property managers am I jeopardising the attempt to get the money out of the tenants.

Also I know have 2 vacant properties which they are having cleaned and putting on their rental books. I really don't know what to do.

 

[duncan_m]

I really don't know what to do.

They're grossly incompetent, find someone who can MANAGE to manage your properties, dont throw good money after bad by continuing to engage these dolts.

I feel you're in for an expensive lesson, no doubt you've signed one of those awully weaselly contracts that Property Managers present to Landlords, the sort of contracts where they are REQUIRED to do NOTHING and you disclaim all liability for problems they may cause.

Oh.. and FIND the time to examine the rental statements when they arrive.

 

[Jacque]

Hi Karina,

Without knowing all the facts, it's a bit difficult but I can empathise with you in this situation. Miserable PM's can make life mightily unpleasant and it really hurts the hip pocket as well! Been there myself!
Might I be so bold as to suggest that you have taken away a few lessons with this experience:

1/ Use Landlords insurance- no matter how confident you feel in the PM or the tenant, life is a funny thing sometimes and being insured can save you a lot of heartache later on.

2/ Check each rental statement thoroughly. If the tenants were 13 wks behind, and you were receiving normal mthly statements, then the arrears should have been obvious earlier. Make it a point to double check every little thing, and you'll be surprised at the anomalies you find from time to time.

I'm with Duncan here, in that you should be ideally trying to locate a new PM (if you let us know in what area, we may even be able to help you out with some recommendations) asap at least to tie up the loose ends and get some new tenants in to keep some income flowing.
Also get a paper trail happening, of all correspondence (including phonecalls to who on what date about what topic) statements, MA's and the like to establish a clear case of incompetency on the part of the agency.
Naturally the principal needs to accept responsibility, and if you talk to someone at the Qld Dept of Fair Trading to get the ball rolling on an initial written complaint, you may just find his attitude may mellow a little
Don't give in- but don't rely on those debt collectors either. They can end up costing you a whole lot with very little result.

A link or two that might assist:

http://www.reiq.com.au/memberAgent/pdfs/Code_Real_Estate.pdf
Boring I know but read Part 5 about complaints and principals. You may get a clearer idea of how they are supposed to handle complaints.

http://www.fairtrading.qld.gov.au/o...21051A?OpenDocument&L1=Miscellanous+Documents


Good luck and let us know how you go with it all. Remember, in all times, to say to yourself, however, that "This too will pass". Keep your chin up!!

 

[karina]

Hi everyone,

thanks for your replies. Both properties are in redcliffe QLD. I will be contacting the dept of fair trading tomorrow to see what they can do to help me. Looking at the big picture its not the end of the world. I should get the bond money back, no damage has been done to the properties , one of them needed cleaning though.

I'll make sure I make the time to check statements in future. With any luck I might get some of the money back.

Insurance is something I will look at, I have 22 IP's so its a big expense to take out insurance on all of them. It's easy to miss things when you have a full time job, a husband , household to look after and 22 IP's

Still its no excuse , I need to manage my own business, just goes to show you can't trust anyone to do the right thing. I am fortunate however to have some really good property managers for some of my other properties.

One of those things I guess....

 

[ggumpshots]

I think it would be great to share the name of the Agent who does not wish to do the right thing.
This would also assist other members

 

[Les]

I think it would be great to share the name of the Agent who does not wish to do the right thing.
This would also assist other members

And I'm sure most of us will understand when Karina DOESN'T post this - in today's world, the post would not be allowed to last too long on a public forum Of course, there's always PM or email.....

Regards,

 

[stickysandwich]

Karina

I would know immediately because I can't afford to service the loans by myself. Where was the money coming from to pay for you loans? I also set up direct debits only from tennant's work or centrepay if they are on a pension or unemployment never let them pay in cash or any other means. Sad for your loss. $6400 is a lot of money. How many holidays could you have gone on for that! If they are renters then they will probably be living pay to pay so you probably won't see that money again. Change REA immediately!

Rebecca

 

[duncan_m]

Insurance is something I will look at, I have 22 IP's so its a big expense to take out insurance on all of them. It's easy to miss things when you have a full time job, a husband , household to look after and 22 IP's

Your story would be a great post if you were willing to share a little of it!

 

[skater]

Was filling a couple of weeks ago and noticed that I had not received rent on both properties in QLD at $200.00 per week for over 13 weeks each , ouch!

I know this is an expensive lesson, but you need to check all statements as soon as they come in. Unfortunately for you, you may have to accept that part of the problem was caused by yourself.

rang the agents to find out what was going on, why I had not received a call, was there a problem? why were my tenants not paying? they knew NOTHING, they could only say that they would call them to see what was going on? I was slightly pissed off as you can imagine. I later found out that 3 people including the supervisor had been fired from the property management dept for not doing there job.

I don't know how they claim to know nothing. Obviously they knew enough to sack 3 people. This tells me that the principal knew there was a problem & therefore he, also, should accept some of the blame.

So tenants have now been kicked out and I am out of rent $6400.00 in total due to incompetant property managers and the real estate owner says he can´t afford to wear the cost.

It is a cost of doing business to him. I presume he hasn't denied liability, just the fact that he dosen't want to pay. Get some legal advice as I am sure that he does, in fact, have to pay some compensation on this (maybe not in total as you should have noticed earlier that you were not getting paid)

No I didn´t have landlords insurance, didn´t think I needed it these tenants had been in the properties for years and never caused me a problem.I guess nobody asked them for money so they didnt pay it. The debt collectors are after them but that is too little too late and I may not see any of it.

I know insurance is expensive, although you should be able to get a discount if you have 22 IPs. Personally, I have insurance on all of mine. I can't afford not to. Chalk it up to experience & be thankful the tenants didn't trash the place.

 

[blossomoz]

Reiq

You should be able to receive help from REIQ but unfortunately our experience was that they will protect one anothers' backs. Sadly our dealing with Building Services Authority has a similar history.

At present we are dealing with an ombudsman over a business matter, nothing to do with property. We have been waiting for a proper reply since before Christmas. We have received phone calls saying we can chat with the particular department, but we have done that ourselves. The department concerned is causing havoc in our industry & the managers protect themselves by not putting anything in writing.
Being government bodies the higher paid employees are on contract so they don't want to upset anyone in another department as they may not have their contracts renewed. So again they go with the status quo & don't make waves.
Cheers
blossomoz

 

[luckyone]

Insurance is something I will look at, I have 22 IP's so its a big expense to take out insurance on all of them. It's easy to miss things when you have a full time job, a husband , household to look after and 22 IP's

At the moment I have landlord's insurance on my one IP. It cost me $285 for the year. For your 22 properties, this would have been $6,270 (i.e. less than what you've lost). You'd probably get a discount as well for having so many properties + it's tax deductible.

 

[duncan_m]

At the moment I have landlord's insurance on my one IP. It cost me $285 for the year. For your 22 properties, this would have been $6,270 (i.e. less than what you've lost). You'd probably get a discount as well for having so many properties + it's tax deductible.

Or alternatively $6,270 could well have secured another IP..

I also do not carry Landlords Insurance, I aggressively self-manage instead.

Karina's loss was mitigatable, I feel almost certain that the Landlords policy would NOT have paid out on this given that NO attempt to mitigate the loss was made.

It is NOT a "Real Estate Agent Incompetence Insurance"

 

[Monopoly]

Karina's loss was mitigatable, I feel almost certain that the Landlords policy would NOT have paid out on this given that NO attempt to mitigate the loss was made.

It is NOT a "Real Estate Agent Incompetence Insurance"

Correct!!!

Ignorance or nonchalance on behalf of the policy owner is not a compensatable excuse for insurance companies to pay up, nor should it be. I am sorry Karina, unfortunate as your set of circumstances (ie. loss of rental income) I can't say you have much of a leg to stand on here.

Put it down to experience, and for heavens sake, HEED the advice of posters who like myself, recommend that in future YOU MAKE THE TIME TO CHECK RENTAL STATEMENTS EACH AND EVERY ONE AS THE COME IN, EVERY TIME!!!

 

[liverpoolharryk]

Yes you guys are right in regards to Landlord Insurance. If an agent does not follow the correct process and issue the correct form at the correct time and have record (and from Karina said this I would not have be done) of this then the Insurer will not come to the party and rightly so!

Try to chase the agent don't go to the REIQ they are a toothless tiger you would have much more success heading straight to the office of fair trading. For an agent to hold a licence they have responsibilites for this privilage and this can be taken away from them or fines put in place for not acting in the correct manner. Worth persuing.

 

[peteb]

What a horrible situation and it doesn't look good in terms of getting that lost money back.
But lets be blunt, your portfolio has grown substantially, so lets assume it's worth over $500K and you have a fulltime job that pays $60K but you dont have time to check the rental slips ... do you have time to check you fulltime job's payslip.
You need to take some control don't leave your money in the hands of a PM or anyone else for that matter of fact.

 

[Sultan of Swing]

Hi All

I agree that the REI's are toothless tigers. The REIT is mainly made up of agents and a few other ring-ins.

In Tassie the government body I'd be complaining to is the Auctioneers and Real Estate Agents Council. They have a bit of clout and don't mind using it. Basically, they do all the licensing and random audits on agents to make sure the agents do the right thing.

Does anyone know if there's an equivilent in other states? If there's one in Queensland, call them.

Cheers

 

[Peter 14.7]

Hi Agian

The Agent cannot simply wash his hands.

I am sure a lawyer wil know exactly how to deal with this and give you a fair assessment of the sucess involved.

Remember if you make a claim via the small calims tribunal or what ever the Agent has to spend time and $$ to defend his case. This could easily go past $6k for him.

Also he has his reputation to protect and I am sure Today Tonight or ACA would love to hear from you. Also Consumer Affairs.

It is not a pretty game to fight for your rights but you should not let it go.

He has been clatent in his professional failure. Does he own property you can sue, etc...

Regardless of your postion re checking you paid him a fee to mange your interests. It is not up to you to tell him something is wrong.

On the matter of Tenants Insurance everyone should have it unless they can afford to self insure. That is carry the loss.

Aside from the obvious damage and lack of rent from a bad tenant what about rent lost due to a fire making building unlivable. Who going to pay rent them to meet your cashflow??? $300 p.a is nothing IMO.

Peter 147

 

[yadreamin]

Your story would be a great post if you were willing to share a little of it!

Karina

Once you have checked this months statements!!!!!
it really would be great if you could tell us your 22 ips story.

Keep us informed with your PM and tenant chase.
cheers yadreamin