Updates from PM - is this a little ridiculous?

[Smilla]

We are in the midst of swapping to a new PM due to our current one being seriously slack with getting repairs done etc. this is our first IP and we have had it for three years. it is in a small country town and at the time of purchase there was only an option of one PM in the area. recently a few other ones have started up and we have had one recommended to us and we have signed with them.

the changeover is supposed to happen in a week and today i get a call from our current PM's assistant to ask if it's OK if our new PM can come pick up the keys etc, and start today as they need to give our tenant a notice to vacate and it should be sent by the new PM, not the old one.

I ask her why are they giving the tenant a notice to vacate, and she says that she is behind in the rent and has been on a payment plan for a while but has fallen behind.

then recently she had her phone disconnected and noone is able to contact her. apparently she is still at the house as the curtains move etc when they call around but she won't answer. they apparently told her she had to be up to date by the end of july or she would be out. after not being able to contact her after that they have been slipping notes under her door every day for the last week and have now decided to give her the NTV.

so after hearing all this I am absolutely fuming - why haven't they told us that our tenant has been paying rent late or is on a payment plan? I have spoken to them on the phone about repairs/the switchover etc at least 3 times in the last two months and there has been no mention of any of these problems.

I called our new PM and she said she is picking up the keys today and going over this afternoon and entering the property with another person from her office. She told me that our old PM told her that the tenant is $1300 behind in rent, which is over two months worth.

Maybe this is all my fault and I should have asking direct questions of the PM regarding rent, but we have been getting our statements as usual and nothing seemed amiss (though its hard to tell as the figure is always different with repairs, etc coming out). I have certainly learned my lesson now.

Can other more experience landlords tell me what I need to do in the future with regards to checking that everything is OK, that I should have been doing with the previous PM?

I am also wondering if there is any type of action we can take against the old PM with regards to her not telling us the tenant wasn't paying. If she had asked us what we wanted to do once the rent was a fortnight late, we would have been able to start the whole NTV process there and then if we had wanted to....I assume there is nothing we can do now though.

 

[jrc]

I have two agents who issue monthly statements. Both agents show what date the rent is paid to on each statement for each tenant individually.

Did your original agent give you a list of what they would do eg their procedure if tenant falls behind in rent

 

[Edmond Dantes]

Can other more experience landlords tell me what I need to do in the future with regards to checking that everything is OK, that I should have been doing with the previous PM?

Sorry to hear your story. I'm not experienced, have got only 1 IP. I have a spreadsheet with all the weeks in the lease detailed that shows me exactly when the rent should be deposit in my account. If the rent is not deposit the week I'm expecting, I wait 1 or 2 business days (I'll give the PM the benefit of the doubt). If nothing, I shoot a polite email to the PM asking them what's going on.

Did you do something similar? I do get statements, but I want to make sure I get the $$.

hope you sort out the issues

cheers

 

[Pushka]

Well, I guess it confirms your decision to change PM's. Dont you track your rent receipts though? You should receive a statement of rental monies collected, and payments deducted (management fees etc) and if this involves repairs, I also receive a copy of the Invoice sent by the tradie. You need these for your tax return. If they havent been paying the rent, then who paid your rental income?

 

[Smilla]

thanks for the advice. we don't keep a spreadsheet but I look over the statement each time and see if everythin looks roughly right. I should have been doing more I think.

 

[Minxdamanx]

Yes you probably should have been doing more but I agree with you that your PM should have kept you up to date with the situation. It sounds like you have made the correct decision to change.

We had a tenant not long ago on a payment plan. The PM rang me to see if I agreed with $xx per week until the tenant caught up and then confirmed this in writing with the tenant with a copy to me - I would have assumed you should have got something similar to this from your PM.

I treat my PM as an 'employee' to simplify the procedure BUT I check everything, query anything that looks odd and squawk like crazy if they are not doing what I employ them for - that is collect the correct rent, organise repairs, and keep me informed of issues relating to MY property. To monitor things, you do however need to be on top of what is going on.

You will find that keeping on top of paperwork will make things easier for you at tax time too.

All the best

 

[Burbs]

On your monthly statements you need to monitor:
1. Paid to date (watch for manual amendments, check against amount paid)
2. Any rent credit (any change should be explainable)
3. Bond = 4 weeks rent + any pet bond (could be lagging behind).
4. Any changes to tenant names (might indicate pm changing tenants without your authorisation)
5. Maintenance - did you authorise it, do the amounts paid appear reasonable, is the tradeperson a genuine 3rd party.

Burbs

 

[Perp]

Unfortunately, you do have to watch them more closely. It gives me the absolute willies that it's so hard to find people who'll do such a good job that you don't have to get involved in the administrivia.

Not good enough, though, for this situation to have developed without you knowing about it. They really should advise you when something as significant as this arises.

 

[skater]

Like the others have said, you really do have to check everything. With only one IP, this should be an easy task.

I have sustained some large losses in the past from slack PM's. The first was in a Regional area that had a great PM. All was rosey! Then he retired! The first we heard of the new PM was when things started to go wrong. The new PM was a complete "newbie" and was learning the job as he went. The Real Estate agency told us that they had appointed a terrific PM. While I believe he tried his best, he was too trusting and he had no-one teach him the ropes.

The second was more local to me. He spoke confidently and knew exactly how to behave, but had financial problems of his own. He ended up bankrupt, taking many investors to the cleaners with him.

When things started to go awry he always had a plausable reason for it. We received no statements at all towards the end, but money would be deposited into our account. There were "reasons" for this which included a "software licencing" glitch, where they could apparently track the rent received, but not print statements. Supposedly they transferred to new software, but were having trouble with it and had not renewed the "licence" for the old, making printing of statements impossible. There were many other excusses, but this was the most creative.

The money going into the account was "more or less" right for a couple of the properties, but low/nothing for the others. We were told that a couple of the tenants had fallen into arrears, and that the required notices were sent. We were also told that the software problems were being sorted and your statements will be ready next month. We didn't wait, but many others waited and went down with the ship.

When we changed Agencies, eventually everything came out. But even this took a while because they would not release their documentation to the new Agency. One tenant was told that they would come in person to pick up the rent from her, which apparently he did, and pocketed it. She had hand written receipts from him proving that she had paid. Other tenants too, complained that the rent was paid in full, but there was no record of it. Who do you believe?

We sued, but he went bankrupt and we got nothing.

Both these PM's were holding multiple properties.

So, in saying all this, it is IMPERITIVE that you check, check and double check EVERYTHING, even if you beleive the PM to be honest and trustworthy. Most are, but some are not and some are just plain lazy.