Real Estate Agent oversight - What to do

Just when I thought I had my 'bad luck' with property this year (i.e. Just getting through eviction of tenant and cleaning up the place on another IP), and now it seems I have a problem with another agent with another IP.

I have a unit in the CBD in Brisbane, and have been getting the property managed now for a while with one of the inner city real estates. Things have been going along fine. In July (prior to me heading OS for a couple of months), I deceided to drop an email to the property manager to see how it is all going, and also to ensure that the rent was going up at the specifed time at the 6 month increment (which was included in the tenancy agreement).

He got back to me and said everything is fine and the rents will automatically go up to the new mark, as it is in the computer.

Well, the problem starts a couple of days ago, to find out that they have recently terminated one of the office staff, and also my property manager is overseas for a couple of months.

The thing is that my current tenancy (and is backed up by a copy of the agreement I got the RE to send me when first done) is scheduled to end its fixed term on the 10/04/10.

However, after looking at some rental statements coming in, I thought I was being underpaid. It seems that they have put another tenant into my unit which was started on the 4/09/09 and terminates on 20/01/10. (3 months). However, on this tenancy agreement, the rent is $70 / week less. My carpark space is also apparently not being used, Previously with other tenant, the price reflected having the car park space as well). So I have lost rent, and can get extra rental for a carpark space. (trying to find out who is using the space....RE doesn't know)

Obviously, I am wanting the agency to rectify and make good the loss of income. They did not inform me that they were looking for another tenant, (or did I want it rented out again) and discuss anything about rental value.

I was told with other property managers on other properties, that if the first tenant vacates, they have an obligation to continue paying rent until they find another tenant (and at the same rates).

Anyway, I have politely discussed this with the 'new' property manager filling in while mine is 'supposedly' away, and asked her what she is going to do to fix this up, and reimburse me what is contractually stated.

She emailed this morning and said, sorry about the stuff up, but hopefully we can get this right in January (when the new tenancy expires)........What....

Couple of questions......

1... Has this happened to any of you guys. (i.e. I have a valid tenancy which expires next April, but there is another tenant in there with terms completely different to what the origanal tenancy dictates)

2... As I have the original agreement which expires in April next year, is the RE required (contractually) to compensate me for loss of income. (Loss of rent equates to $1120 for difference in rent (over 12 weeks) + guaranteed $5640 to end up to the original tenancy.(12 weeks))

3... I am thinking that if I get legal advice, this should be a no brainer compensation for me??? I don't want to use my insurance to make any claims, as excess would be payable, and besides, I don't think they would insure if it was a mistake by RE agent.

3... Do 3 month tenancies get recorded on the same 'General tenancy agreement' as more common 6 monthers or 1 years.

Interested to hear if SS guys have faced this scenario before, if there are legal savvy readers, would like to hear what can be done about the issue.

My posts to date tend to be asking alot of questions of late......hopefully, when I get over these 2 challengers with tenants / agents, I look forward to being involved in discussions.:)

Thanks in advance.

F
 
Fudge,

Go back to the original agreement you signed with the PM.

What did you authorise them to do?
Are they allowed to sign on your behalf for new tenants?
Are the obligated by the contract to contact you on change of tenants?
How much expenditure can they authorise (please don't say unlimited!)

Need to know this stuff before being able to really make any comments...

The Y-man
 
Ouch that is one fine mess.

Y-Man had some good words.

Good luck getting that sorted with the RE agent. It is intensely frustrating when you pay them to do a job and it ends up being more work for you. :mad:
 
Hi Y man,

Fudge,

Go back to the original agreement you signed with the PM.

What did you authorise them to do?

Nothing. Didn't know anything needed doing. (especially from last email with him in July) From this correspondence, I was informed that the rental will increase on the 6 month date it suggests in the tenancy agreement. (Obviously found out is is going the other way.....pretty sharply too:()

Are they allowed to sign on your behalf for new tenants?
They (just like all of my managing agents) have full management of the units, and I pay good money for this service. (9%) Refer to below for correct answer.


Are the obligated by the contract to contact you on change of tenants?
OK, under Section K of PAMD 20A (Schedule), it says.......for letting / reletting instructions - On Owner confirmation. Should the owner not be contactable after 7 days of the lease end date the agent has permission to proceed with the reletting of the premises (This would also answer your second question).....Didn't get any notice of this at all. Most of my correspondance to the property manager is via email, so even though I may have been out of the country, I checked emails daily (as I had another property that was getting settled while I was away) Unfortunately, I seem to only ring him.....They never ring me.

How much expenditure can they authorise (please don't say unlimited!)
No, I have ammended the agents initial suggestion at the time of signing the management agreement (which is countersigned). He wrote two weeks rent. I ammended this to one weeks rent can be spent without preinforming me.

Looking forward to response.

Regards,

F
 
OK, under Section K of PAMD 20A (Schedule), it says.......for letting / reletting instructions - On Owner confirmation. Should the owner not be contactable after 7 days of the lease end date the agent has permission to proceed with the reletting of the premises (This would also answer your second question).....Didn't get any notice of this at all. Most of my correspondance to the property manager is via email, so even though I may have been out of the country, I checked emails daily (as I had another property that was getting settled while I was away) Unfortunately, I seem to only ring him.....They never ring me.

Good - that means you should have a case to take to them - you need to go along with the agreement in hand, and questioning them on why this has not been followed through etc.

Cheers,

The Y-man
 
Yep, that makes sense.

Thanks for some assurance......

I have been told that the only one we can sort it is to wait for the property manager that is on holis to get back in another month and a bit.:eek:

This is because the other estate agents there (and acting manager) don't actually know what has happened.Doesn't sound good.

Hopefully, the worst that will happen, is that I will be out of pocket until he comes back...if he comes back at all.

Regards,

F
 
Yep, that makes sense.

Thanks for some assurance......

I have been told that the only one we can sort it is to wait for the property manager that is on holis to get back in another month and a bit.:eek:

This is because the other estate agents there (and acting manager) don't actually know what has happened.Doesn't sound good.

Hopefully, the worst that will happen, is that I will be out of pocket until he comes back...if he comes back at all.

Regards,

F

Nonsense.
I would let them know that you want them to rectify this immediately, and if they are unable to uthorise this themselves, to contact someone who can IMMEDIATELY. That if they fail to do so, this will result in you taking legal action against the company. Clearly lay out for them the breaches they made under the contract. And at the same time contact a different REA to take over management of the property.
 
Agree with rugrat. The principal of the company needs to sort this out, whether or not the agent who stuffed up is away or not.
 
Nonsense.
I would let them know that you want them to rectify this immediately, and if they are unable to uthorise this themselves, to contact someone who can IMMEDIATELY. That if they fail to do so, this will result in you taking legal action against the company. Clearly lay out for them the breaches they made under the contract. And at the same time contact a different REA to take over management of the property.

Rugrat,

After rereading my post, and consequently yours and wylies, I have to say thanks.

I just grew another set of &$%^# and went for the jugular.

In seriousness though, even though I haven't been a member of this board for too long, I have already said that it is a fantastic site to learn a great deal relating to investing and property, especially through the views of dedicated posters.

I have just learnt another thing today with regards to this forum, and that is it is changing my 'behavioural patterns' (in a business sense of the word). This is an even better accomplishment, and am happy to say, that I should be getting a rectification to this dilema tomorrow (after meeting with principal).

I realise that the forums are very opinionated, and in saying that, thank you for changing my mindset.

Look forward to many more discusssions,:)

Regards,

F
 
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Hi,

I'm just posting to ask what happened, it's an interesting thread that I've been able to learn from. So thanks :). Just curious how the meeting with the Principal went?
 
Hi,

I'm just posting to ask what happened, it's an interesting thread that I've been able to learn from. So thanks :). Just curious how the meeting with the Principal went?

G'day Gary,

Yeah, After a number of civilised phone calls of politeness, and similar emails, it was going along quite well. I will find out tomorrow (as I sent another big email Friday night)

It transpired this way though:

After making them see that they were in breach of my property management contract, they started to change their tune. They were initially suggesting that they couldn't do anything until next January, when the current lease expires. (breach was that they didn't inform me for reletting the premises.....(in management contract)....I will have to thank the Y man for his initial questions to me though..........Thanks Y Man!

After a meeting was undertaken with the principal, they agreed to reimburse me $830 on Friday. This nearly brings me up to what I would be owed if I had the original tenant....to Jan anyway. You may remember though, that my original contract was to expire in April, so they aren't prepared to reimburse me anything after this January date. (They wouldn't have to if they found a tenant for the same original weekly rent.....they might find one willing to pay more?....we will have to see........)

Also, to come good, they are not going to charge me any management fees at all until the end of this current lease. (another 3 months). This will completely reimburse me and so should be square.

There tune suddenly changed late Friday afternoon on the phone with the agent (hence my long email to them on Friday night and ....should find out tomorrow)

What I plan to do, provided they abide to the above, is to keep going with them until the change of lease (3 months) and just prior to reletting, move to another management company.....so they don't get another letting fee from me.

Anyway.....should find out a bit more, and once the matter is resolved, will post final outcome to close thread.

Good that you are enjoying my 'nightmares and problems'.:D

Cheers

F
 
Good to hear.

As a hypothetical, if a PM company breaches contract, what recourse does one have?

Is there a tribunal or some sort of oversight commitee?

Or is it a simple (but not so desirable) case of resorting to litigation?

Obviously that's the last thing you want to do. And does it vary state by state or is it nationwide?

Is there an ombudsman type mechanism?

One of the best ways to solve most issues with bad businesses (Re: telcos) is to drop the line: "Look, I really don't have the time to take this up with the ombudsman and I'd like to clear this up quickly" and that tend to get things sorted quickly enough. IS there an equivalent line you can drop in these situations that gets the point across without sounding too aggressive?

I know those are a lot of questions, so thanks to anyone who can help with these :)
 
To close out thread, just thought I will let you all know what the verdict is.........

After they were thoughtfully reminded that they breached the management contract with me, I finally have an email confirming basically what I mentioned the other day.....

i.e.

- weekly income for apartment
- weekly income for car park space (apparently, this was going to another landlord)
- Had over $800 reimbursed the other day into my bank account.
- no management fees until end of current lease
- current lease ends Jan 2010
- even though they haven't conducted any periodic inspections (my third one should be coming up next month), my first is getting done tomorrow. Even though this is included in the overall management fees, they will not reimburse me for the two reports that I haven't got. Will see tomorrow afternoon when I view the periodic inspection, to see if all chatels are in there. (i.e. new fridge, dishwasher, curtains, microwave, etc.)
- will look for other agent around this time if things don't improve.

Time will tell.

Cheers,

F
 
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