Property Manager has just forwarded invoices to me

[dontask]

I just got an email from my property manager in Brisbane asking me to pay two invoices for maintenance of my property.

I was previously asked for my preferred tradespeople and I have given these as well as authorised the repairs in question. However, in the past, all maintenance has been paid for by the property manager out of the rent after the invoices get forwarded to them. I use the annual summary to help me do my taxes.

They have changed their position on this. Their rationale is:
Due to the new legislation, we are unable to make payments to creditors that are not appointed to our office. Therefore I forward these invoices for your immediate payment.

Has anyone else have this problem?

 

[Perp]

I assume they're referring to the Property Occupations Act 2014, but I don't know what aspect of it. Ask them what section of the Act they're referring to. (I'm curious, too.)

 

[Jamie M]

I have the opposite problem with an interstate IP (NSW).

It seems like every month there's a new invoice that HAS been paid for something trivial. It's quite annoying.

Cheers

Jamie

 

[Scott No Mates]

put the acid on the agent. Obviously they don't get a kick back from their preferred subbies so there's no money in it for them.

I don't know what the new act entails but it sounds like a cop out.

 

[Josh_G]

I just got an email from my property manager in Brisbane asking me to pay two invoices for maintenance of my property.

I was previously asked for my preferred tradespeople and I have given these as well as authorised the repairs in question. However, in the past, all maintenance has been paid for by the property manager out of the rent after the invoices get forwarded to them. I use the annual summary to help me do my taxes.

They have changed their position on this. Their rationale is:
Due to the new legislation, we are unable to make payments to creditors that are not appointed to our office. Therefore I forward these invoices for your immediate payment.

Has anyone else have this problem?

Half true and has nothing to do with recent changes.

They need to send your preferred trades person an appointment of new creditor form and your trades person will have to supply any licensing details, all insurance details, bank details and so forth.

Given you stated on what would have been the old 20a your preferred trades this should have been completed by the PM/BDO way back then.

 

[Josh_G]

put the acid on the agent. Obviously they don't get a kick back from their preferred subbies so there's no money in it for them.

I don't know what the new act entails but it sounds like a cop out.

"Kick backs" have to be listed on the 20a/Form 6. Full disclosure these days.

I'm leaning towards a lazy PM not having the preferred trades details on file.

 

[dontask]

Thanks for the quick replies guys. I'll ask them for some clarification.

 

[womble66]

They have changed their position on this. Their rationale is:
Due to the new legislation, we are unable to make payments to creditors that are not appointed to our office. Therefore I forward these invoices for your immediate payment.

Has anyone else have this problem?

In NSW so maybe different but never had this problem as I also like tracking all outgoings, except for rates, insurances and water, via the PM system as a double check at EOFY. This type of behaviour would result in the following reply from me as I call BS (unless there is a "real" reason of course):

Due to the new legislation, I am unable to retain your services as my PM therefore accept this as formal notification and a new PM will be in contact shortly for the file.

 

[Xenia IM]

If they are not listed as creditors in their system, they would be unable to pay those invoices from their trust ac.

 

[chilliblue]

Just had a quick scan of Property Occupations Act 2014 and I think Scott is right.

The agent cannot claim a commission on your works and as such are requesting for you to pay them.

Review your agency agreement with them and highlight the section that allows them to deduct monies from your account as authorised.

Send the invoices back with the highlighted section and ask them to process them and all future ones.

 

[Scott No Mates]

If they are not listed as creditors in their system, they would be unable to pay those invoices from their trust ac.

Sheer laziness in that case - how hard is it to hold up payment of the contractor until the agent has requested copies of PL/Workers Compensation/SWMS/White or Blue Cards or any other documentation that the agent can think of?

How hard is it to enter a new creditor/supplier into REST, Console, JD Edwards, SAP etc - it does not require calling in the IT specialist to redesign the system, 5 minutes of the accounts payable supervisor's time.

 

[dontask]

Due to the new legislation, I am unable to retain your services as my PM therefore accept this as formal notification and a new PM will be in contact shortly for the file.

Lol how I would love to say this, but best not to inflame the situation right now.

Their next response was:
We are happy to pay any invoices for work that our tradespeople conduct however due to the fact these tradespeople are not on our list of approved tradespeople nor do we have copies of their relevant insurances or a signed contractor appointment places us at risk therefore we no longer process work orders or payments.

The reason behind the decision is we have recently been served with an order from a tenant making a claim for damages and our insurance company has instructed us that in future all work arranged by owners with tradespeople should be referred to the owner for payments and or processing. My apologies however this is now the office policy and I have been instructed that this is now policy.

Anyway, we have come to an agreement where they will pay the invoices for work already completed. I still haven't decided whether this reduction of service is reasonable and bummed I can't use my preferred trades.

 

[Terry_w]

Lol how I would love to say this, but best not to inflame the situation right now.

Their next response was:
We are happy to pay any invoices for work that our tradespeople conduct however due to the fact these tradespeople are not on our list of approved tradespeople nor do we have copies of their relevant insurances or a signed contractor appointment places us at risk therefore we no longer process work orders or payments.

The reason behind the decision is we have recently been served with an order from a tenant making a claim for damages and our insurance company has instructed us that in future all work arranged by owners with tradespeople should be referred to the owner for payments and or processing. My apologies however this is now the office policy and I have been instructed that this is now policy.

Anyway, we have come to an agreement where they will pay the invoices for work already completed. I still haven't decided whether this reduction of service is reasonable and bummed I can't use my preferred trades.

I know of at least 1 case where a real estate agent was held partially liable for damages due to a tradesperson (a handyman) using substandard materials for a repair.

 

[Scott No Mates]

dontask, didn't I point out that they only need request this or any other information from your preferred contractors? If that's their biggest beef, tell them to pull their heads in (the pm probably has two & hides one when in the company of clients). As for the insurance issue raised - is the contractor well known to yourself/previous relationship with the contractor? Would you be willing to accept the liability which the agent is trying to avoid?

 

[chilliblue]

We are happy to pay any invoices for work that our tradespeople conduct however due to the fact these tradespeople are not on our list of approved tradespeople nor do we have copies of their relevant insurances or a signed contractor appointment places us at risk therefore we no longer process work orders or payments.

The reason behind the decision is we have recently been served with an order from a tenant making a claim for damages and our insurance company has instructed us that in future all work arranged by owners with tradespeople should be referred to the owner for payments and or processing. My apologies however this is now the office policy and I have been instructed that this is now policy.
QUOTE]

Making you use only office approved contractors would be considered a restriction of trade and someone tell me if I am wrong, it that not illegal.

As to the concerns of their insurances, have any future non approved contractor forward a copy of their insurance and licence as appropriate and that problem is solved.

 

[Scott No Mates]

Chilli, the office manager hasn't yet written the procedure to set up a new contractor in their payment system. All the file not says is send it to the owner.

 

[Terry_w]

Making you use only office approved contractors would be considered a restriction of trade and someone tell me if I am wrong, it that not illegal.

As to the concerns of their insurances, have any future non approved contractor forward a copy of their insurance and licence as appropriate and that problem is solved.

Sounds like there is no force or compusion involved.

 

[chilliblue]

Scott, the majority of the commercial agencies and now the larger franchise real estate agencies are using a system of preferred contractors only for all works for their managed properties. Essentially creating closed shops.

It only takes minutes to add a supplier/contractor to an accounting system (I do it regularly). What takes longer is ensuring that insurances and licences are up to date before using the contractor.

If an owner has a preferred contractor. said contractor is insured and licenced and the works were completed to the owners standard, then the agency has a duty to make payment if asked.

 

[Terry_w]

said contractor is insured and licenced and the works were completed to the owners standard, then the agency has a duty to make payment if asked.

I think it would depend on the contract between the parties.

 

[dontask]

dontask, didn't I point out that they only need request this or any other information from your preferred contractors? If that's their biggest beef, tell them to pull their heads in (the pm probably has two & hides one when in the company of clients). As for the insurance issue raised - is the contractor well known to yourself/previous relationship with the contractor? Would you be willing to accept the liability which the agent is trying to avoid?

Yup, I agree with you. I'm not going to bother being difficult about it. I will ask them to get the relevant information from my preferred trades and see if they have done it by the next maintenance request. I have established relationships with the contractors in question as they do renovation work for me so I do not question their workmanship.