Just to follow up on my property managers from hell saga, I need some forum wisdom.
My second attempt at finding a reliable PM in Darwin has failed. Six weeks after finding tenants myself, I have seen no condition report, half the rent that the tenants have paid with only one statement four weeks ago – so I don’t know why, received an email listing required maintenance which actually turned out to be items noted in the condition report (ie. new door handle required because the rest are new and it’s not!).
I sent my ever-so-nasty email listing my grievances which the manager of managers responded to saying that my PM was only new and could I give her another chance. I said yes (I was having a good day), one month.
Times up. No required maintenance has been arranged. No statement has been received. No condition report received. Tenants unhappy with PM. Other units under the same PM are even unhappier with service to date and they’ve been there up to two years.
I spoke to the tenants today and they heartily agree that they would rather pay rent directly to me and report any requirement re maintenance to a local friend of mine who has done a few jobs already and is willing to be the trade arranger where required and do the inspections too.
I was hoping someone could warn me regarding what fees/penalties I can expect from the PM for taking the lease from them. Also, what happens to the bond the tenants paid to them? It appears the PM also charged a weeks rent for ‘renewal fees’ when the lease was signed. I don’t recall being aware of this fee when signing them up. Is that normal? Above all, any advice on my intention to copy the lease (wording) used by the RE and signing it between myself and the tenant?
Lots of questions I know. Anyone offering information based on a similar experience or any advice would be greatly appreciated.
[mellow]
My word – I will say a few prayers to the property Gods for you.
As for the management agreement with the agents, and I am not sure if this is different in each state, but there should be no penalty to break away from your agreement..maybe a period of notice, but sometimes that is not even outlined in the Property management agreement. Ultimately, check the detail in the agreement.
As for the bond, you will need to set up a trust account yourself to maintain the deposits of your tenants. This should not be difficult and you would need to issue a trust account receipt was the monies were transferred into that accont to the tenant.
James
<<<<It appears the PM also charged a weeks rent for ‘renewal fees’ when the lease was signed.>>>>
I have been charged that before.
I prefer to use a property manager. What you can do is find another property manager and get them to do the paperwork transfer between your old property manager and the new one. I once did that and it worked for me. They contacted the old property manager and the tenants. But I am in Victoria.
Praise be, James, it is a nightmare.
Period of notice – never thought of that. I’ll will advise them of my intentions tomorrow and so be more informed.
Trust account – I was just going to give them the loan account numbers and have it paid in directly. Is there a reason why it has to be a ‘trust’ account. Or is that just required for the bond so I don’t go spending!
Yack, Thanks for your response. Unfortunately this is my second attempt at a property manager. Until now I too have preferred the security of a PM to handle things but experience tells me it’s simply not meant to be. I should also mention that I have complete faith in the tenants (famous last words…), will have a lease between us and will continue with landlord’s insurance. It’s the distance that concerns me (dunno why really) as I presently reside in that country south of Australia – Tassie!
Your time and advice is appreciated.
BlackJack,
At least in Victoria, bonds are required to be held in trust. Please refer below.
Specifically 29. Bonds – where it syas the landlord is to hold the security deposit in trust for the tenant. Receipt details under 31
In addition to the ‘renewal fees’, did they mention this to you at the commencement of managing the property or is it referenced in the property management agreement. if not, I would ask for it back. Make some representation to the REINT.
Good luck and let us kow how you go.
James
Don’t quote me! But in any event you are paying and being charged for a service they are failing to provide, now I dont know if you have some come back, but check out the department of fair trading too.
Elves
Woohoooo James. Have saved document and will commence studying asap. Your assistance is overwhelming!
Thanks Elves. I’ll check with them too.
Feeling uplifted already… [lmao]
Hi Blackjack,
While I sympathise with you and your predicament I would stongly recommend you fully investigate the full legal ramifications of what you are wanting to do.
As someone said consult with your office of fair trading or similar, state real estate institute legislators etc so you know what you are getting into.
Bear in mind landlords insurance may be difficult to secure without a ‘professional manager’ you will need to check this out too.
There is so much for you to do I wonder if your problem really resides with the agency owner rather than the property manager. He/she owns the business and the problem could well lie with the training/induction program (or lack thereof)
Good luck with it all.
Derek
If you consult your office of fair trading, make sure you consult the NT one and not the one in the state you live as every states laws are slightly different and you need the laws for the state your investment is in.
As for breaking the lease, it depends what your lease says, my ones are ususally fixed for say, 12 months, and after that 3 weeks notice is needed. If we break earlier then we have to pay them what they would have lost in management fees. Having said that, the lease also states that we can give notice if they have failed to fulfil there duties and you may be able to get out of it that way. Have a read of the lease and see what it says.
Bonds – In most states have to be held in a trust account. Check this with Fair Trading in NT as well, as some states (such as WA) have a set office that the bonds must be lodged with and both the owner (or PM if they have one) and the tenant receive a copy of the receipt for the funds. Both signatures are then required when a bond is drawn back out. So you need to know what the laws are for NT first.
Good Luck, I hope it works out for you.
PKPK, that sure is some incentive not to sack your PM!!!
]We recently sacked ours, and unbeknown to me, they charged us a 2 week ‘termination fee’, but only could charge it for fixed term leases. We also had to give them 90 days notice. Both of these conditions are different to the REIACT ‘recommended’ conditions, which say 30 days, and no termination, but that’s what the contract said.
I threatened them with REIACT, and Fair Trading etc. cos they were shite managers, and they still took our money, but eventually (with bad grace too!) handed over our files to our new agent.
With regard to the Bond, you may not have to do anything, or you may just have to fill in a form to send to the Bond people saying that you are now managing yourself.
Cheers
MelMelbear,
90 days!!! Wow, I think we better all read our leases closer before signing. 30 days is too long to put up with them if they are no good, but 90! I think it’s easy for us to overlook this section of a lease as we’ve asked our questions and assume we’ve picked the best, but I’ve discovered I’m not good at picking PM’s at all.
PK.
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