Very bad experience with a property managers

Late last year we moved the management of 6 of our properties to a specific Property Management company, to be managed by their Central Coast and St Mary's offices. Unfortunately we have had really bad experiences since then. I found their PMs inexperienced and are not always acting in the best interest of their client. Some PMs are also not contactable when things went wrong with the properties. Below are some of the incidents (not all) that we experienced - from less to more serious ones.


Incident 1 - Property in Orange, managed by St Mary's office.
HWS stopped working and I asked PM to get a couple of quotes. PM got back with a quote of $2,937 + electrical work from a provider outside Orange. Quote included 20% overhead as he's from out of town. When I asked PM to seek a quote from a local tradesman, PM said that's the only quote he could get. So I checked last year?s receipts (which they should also had in file from previous agent) and provided PM details of plumber previously worked on the property. This time, quote came back at $2,013, no electrical work required. PM's inexperience almost cost us over $900.

Incident 2 - Property in Guildford, managed by St Mary's office.
Tenancy ended and they advertised for a new tenant. It was a nice property in a coveted street, also was reasonably priced. I was travelling at the time so didn't pay too much attention, was quite surprised later on when we didn?t get a single application after 11 weeks of advertising (3 weeks during notice period and 8 weeks after tenant vacated). This property had never been empty before! I checked the ad and noticed that PM had "forgotten" to mention the fact that the rent was inclusive of water and gas - in spite of the fact that this was noted in writing when signing management agreement and PM had been paying the bills. Photos presented were blurry and there was no contact number of the agent in the ad (while viewing by appointment only). When these issues were rectified we had 4 applications after the next viewing and finally secured a tenant. Loss of rent for 8 weeks x $360 = $2,880.

Incident 3 - Property in Taree, managed by Central Coast office.
We had had the tenant for 1.5 year when management was transferred to them, and rent was paid ahead at the time of transfer. Within few months, tenant had vacated and left the place in a mess with 8 weeks of rent owing. I am not blaming PM for tenant?s change of behavior (things happened), but I did question why no notice was ever sent to tenant for late payment. My request to PM to lodge an insurance claim straight away was ignored and claim was only lodged much later, resulting in 7 weeks of loss of rent not covered by insurer's assessment period. PM also claimed incorrect figure, which almost cost us an extra $3,671.40. Luckily this was noted prior to payment and we managed to get a revised offer from insurer.

Another thing was PM - without providing us with prior quote nor getting our approval - arranged for an out-of-town cleaner, who invoiced us $5,260 incl. $200 petrol cost. Invoice also included tip fees, but then a week later I was contacted by local authorities via previous agent with a photo showing garbage strewn outside of the property, including mattresses, bedside cupboards and such (see attached photo). Council pretty much ordered us to settle the matter quickly or else fine. When later on we moved the property management back to a local shop, they sent us the internal photos of property, which was very dirty (attached photos), definitely not a condition one would expect after a $5k+ cleaning. At the end we paid an extra $290 for internal cleaning and $600 for garbage removal from outside the property.

Our out-of-pocket (after taking into account insurance payment and bond) to get this property up and running again was $6,519.15.


Incident 4 - Property in Orange, managed by St Mary's office.
This property is an ex-housing property. We had the tenant since first purchasing the place 4-odd years ago. Tenant's payment had been patcy at times, but he?d never owed more than 3-4 weeks of rent. At the time that management is moved to the company, tenant owed 2.5 weeks of rent.

After managed by this company, the problem worsen and we are owed $7,885 as of today and have a non-paying tenant still staying at the property. PM (who is also the licensee of the St Mary's office) is not contactable. Full story in http://somersoft.com/forums/showthread.php?t=104010


Aside from the Orange property mentioned above in Incident 4, we had now (thankfully) moved or on the notice period of moving the management of all properties managed by the company back to local PMs. The Dept of Fair Trading is currently helping us in relation to the Orange property's matters and I was told today that they would be escalating the matter to their compliant department.

The sad thing was that we know Nathan pretty well (or thought we knew him). We had previously helped us purchased 7 properties as a buyer agent, during his time working in Rightgroup. We attended several auctions together, were among first attendants of his first reno workshop. He brainstormed the idea of Binvested with us several times and we even almost do a joint venture to buy and flip a place in Blue Mountains at one time. We moved the management of our properties to the company mainly to support his venture, feeling that it?s the least we could do after learning so much about property investing from him. We trusted that he would deliver superb service as he had when helping us purchasing the properties previously. Obviously we were wrong.

I didn't contact Nathan with Incidents 1 & 2 above, putting them aside as teething issues, but I contacted him when things started to go wrong with the Taree property (incident 3). I didn't hear back from him personally, but his assistant called the next day to assure me that he'd be taking the case on. Unfortunately aside from that one phone call, we heard nothing back from the assistant and pretty much left to our own devices to navigate with clueless PM, insurer and then council order in relation to garbage left by their cleaner on the street.

I contacted Nathan again via email when things went south with the Orange property (incident 4) and the losses started piling up. I also left him voice mails on his mobile and left a message with his office reception, but had heard nothing back until now - not from him personally, nor from any of his staff including the one managing the property!

I'm not sure why. Maybe Nathan is super-busy now? Maybe our case is too small for him to worry about? Maybe he prefers not to receive any negative feedback for the company (incl. one delivered via personal phone call and email)? I'm not sure. What I know is that we have losses of $17k+ and counting to date, and still heard nothing from the company we contracted with to manage our property - no apologies for the costly mistakes, no explanation on what's happening, zip, nada. The whole experience is just very disappointing for us overall, both on business and on personal levels.

Nathan did called me personally about several other properties that we have, earlier in our contract - before things went awry, to see if we'd also like to move the management of them across to the commpany. My husband & I did discuss about it, but then decided to hold off when incidents above started happening. I am just so relieved now that that we didn't end up moving those management across, otherwise we'd be probably in much more grief than we are now.

I realised that above is strong feedback against one of the past frequent contributors of SS, so I am happy to provide any supporting documents to Sims or other SS moderators if required: email exchanges, photos on conditions of the properties, quotes, insurance claim documents, copy of complaint to Dept of Fair Trading, etc.


Lessons learned:

1. Get local PMs to manage your properties. They understand the local market better, know local tradesmen, more likely to do open houses / frequent viewing when looking for new tenants and can follow-up late payments personally by visit if needed (especially if your property is in "rougher" areas, like ex-housing areas).

2. Never take business decision mainly based on personal relationship. We should had waited until the company was proven good as an agency, rather than assumed that Nathan's ability as BA will transpose to a great property management company.

3. Don't take relationships that work well for granted. Our mistake was to move our business from good PMs to a bad one. We should have stayed instead. Luckily I took time to do it nicely during the move and explained to them that it's not because of their bad service that we moved, but purely to support a friend. This enabled us to move the management back to them, and on occasion when not (some agent were winding out of ex-housing area) had led to referral to another agent.
 
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Photo of property in Taree after supposed $5k+ cleaning (outside)
 

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Photo of property in Taree after supposed $5k+ cleaning (inside)
 

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Firstly, that cleaning is shocking. Either the property management company or the cleaner need to reimburse the whole amount.

Secondly, I bet the PM contract indemnifies them against losses. Review it and then seek legal advise. You cant waiver against gross incompetence.
 
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Hope things work out for you, everyone has a different strategy but people should think about investing/owning less properties but in good locations that bring in quality tenants and less headaches dealing with clown PM's.
 
Ouch. I really hope the mods leave this post u p; it seems to be concerned more with facts than emotion and ultimately would serve as a good warning for anyone thinking of using them
 
Thanks for your reply, Terry, Dave M, Simple and Sanj.

Re. legal advise, just wonder if you could recommend a body / private company who could help me with this, that's not to expensive (as loss amount is 'only' around $17k)?

Re. Taree's cleaning, I must say that I didn't end-up paying the $5k+ invoice, as never received any quote nor gave an approval for it to go ahead. And when receiving the photo from council, I just felt that the whole thing was appalling. Cleaning was also not covered by insurance payment. Even excluding this amount, our losses for the property (after accounting for insurance payment and bond) was $6,519.15.
 
I have also had a very bad experience with this Property Management company. It looks like Fair Trading will also be the best way to resolve my dispute.

It's unfortunate - at first the PM was fantastic and I could not have been happier. My lesson was not as expensive as yours though.
 
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I have also had a very bad experience with them. It looks like Fair Trading will also be the best way to resolve my dispute.

Fair trading is rarely even a good way to resolve a dispute, let alone the best way.
 
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staff lazy.

I never had the opportunity to use them as the Gold Coast office weren't proactive enough to follow up on my enquiries, not once but twice.

I think Nathan's business idea's are great, but who is running the whole show?
It looks to me like staff are being left to their own devices with no accountability, a focus on a 'fun' work environment and forgetting all about the customer service aspect, and good business practices.

The business group has potential but someone has to take the reigns and steer the ship!
 
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Fair trading is rarely even a good way to resolve a dispute, let alone the best way.

Fair enough, I have only used Fair Trading for one other dispute, but it was quite effective.

What would you recommend as a good way to resolve a dispute if they will not respond to calls or emails?
 
Fair enough, I have only used Fair Trading for one other dispute, but it was quite effective.

What would you recommend as a good way to resolve a dispute if they will not respond to calls or emails?

A letter of demand followed by a court/tribunal summons.
 
I think Fair Trading are pretty good. You just need to make it easy for them by providing all the required information / substantiate claims, organise it well, get to the point, have reference to the relevant contracts and regulations which have been breached.

A couple of years ago we took a carpenter to Fair Trading - he was providing services as a 'builder' without any licences or qualifications. He had to shut his business down in the end. There is a thread on it.
 
I feel your pain.

As someone posted earlier, maybe you can consider selling those regional properties and concentrate on quality stock in capital cities instead.

I once had a big negative geared IP due to non paying tenant. Got rid of that property and been stress free since then.
 
people should think about investing/owning less properties but in good locations that bring in quality tenants and less headaches dealing with clown PM's.
Wrong! In all locations, the PM is the key. You get 'clown' PMs looking after blue chip properties as well.

maybe you can consider selling those regional properties and concentrate on quality stock in capital cities instead.
And this is good advice because you know the OP's goals and objectives? No? Well then, I think the only person who can comment on whether someone should or shouldn't sell is the person who owns the place. Unless, of course, they have asked for specific advice, and then they would only want to listen to said advice from people with a track record in dealing with their particular circumstances, not someone on the sidelines looking in.

I once had a big negative geared IP due to non paying tenant. Got rid of that property and been stress free since then.

So, your advice is to sell properties that have a non paying tenant? :eek: Hmmm, maybe just deal with the non payer & get on with getting a decent tenant in.
 
Fair trading is rarely even a good way to resolve a dispute, let alone the best way.

Unfortunately they're all bark and no bite. They mean well, but they just can't get a judgement against the company, so in cases like this, I bet they would be pretty useless.

As someone posted earlier, maybe you can consider selling those regional properties and concentrate on quality stock in capital cities instead.

I completely disagree, incur selling and buying costs as well as lowering your return just because you hope that you'll get a better tenant?
 
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