Do property managers / agencies receive kick backs?

Hi Jimmy J

Does it really matter if they are receiving 'kickbacks' ( i prefer the term financial remuneration) for providing a service ?

Eg. A) Intellectual Property – they are proving a short list / recommended list of qualified tradesman who can complete the required work.
 
Project Management – They are responsible for overseeing the work and ensuring that it is completed to an acceptable standard.

My only concern would be if the person they were recommending and contracting to do the work turned out to be the licensees nephew who hasn't even finished the 1st year of his apprenticeship, or alternatively, the person who was willing to 'pay them the most'.

As long as the people they recommended were qualified and reliable, then i would be in full support of having them facilitate the required works…

AFAIK agents don't get kick backs for arranging quotes etc however they have to watch out that the works that they undertake does not require them to have a building licence eg if you get them to arrange repainting, carpet, kitchen replacement etc where it exceeds the limit set by the dept of fair trading.

In the commercial field, where the agent is required to take on the role of facilities manager, then they get paid separately for this work ie for arranging ac maintenance, essential services certification, cleaning etc.

Where an agent is receiving kickbacks they can be prosecuted under the crimes act for receiving 'secret commissions' ie remuneration for arranging works paid for by the suppier not the owner.

hi guys, I'm a current PM in Victoria and can guarantee that I have never and will never get kickbacks. It is part of our authority that any rebates received must be listed and passed on to the landlord if the work was completed at their property. The tradespeople we use are employed by our company because they do quality work, reasonably priced and are willing to do those 'love jobs' eg. I sent my handyman out at 6am this morning to unlock a door that had seized closed – he lives an hour from the property – and he did it because we give him so much work, not as a kickback!

Our regular insurer offered us a rebate when we signed on 100 new clients which we rejected, because it would mean dividing up the rebate amount between the $100 owners. instead we asked the insurer to spread the rebate over the owner's premiums for the next year when they renew so that the owner sees the direct benefit of signing with our preferred insurer. And in this case, the only reason this company is our preferred insurer is because they are BY FAR the easiest to deal with claims – processing times are 5 – 7 days instead of 4-6 weeks!

The closest thing we get to a kickback is a nice bottle of champagne from some tradies at Christmas time

From my experience, there are some Property Management agencies, who don’t only charge you the 9.25% management fee (incl), but will also deduct 9.25% from your rental income for other monies that pass through their hands, e.g. painting, gutters, rates, insurance, water etc, whether you’ve organised the service or they have. Personally I pay those types of expenses from my own account, as it can add to a substantial amount over a year.
It varies from agency to agency.
They are usually open about it if you enquire.
Cheers,
Liz

ABSOLUTELY NOT!!!

I’m going lots of work for Real Estate agents for years as a trader – no one ever asked me about anything! They just source a trader that will do the work quickly and well, so it causes as little hassles for them. That’s all.

I’d imagine RE would prefer property to be well maintained, as their fees will increase and maintenance will go down. But nothing wrong about this! You are the one getting the rent.

If anything – we’ll give cheaper quote for RE. They are our bulk customers. The yare getting few quotes and I wouldn’t want to stand up as too expensive. Also we know who they are and that they will pay. When a stranger contacts you – you never know if you will get problems getting money from them and would allow for this.

But… I myself had not a very good experience on my regional IP. Had to replace ceiling, and used trader RE recommended, as the one why does a lot of work for them and is good. The work was done quite poorly. Year latter I started reno. Every trader was asked me who on earth did THIS. And after hearing a company name they all said – oh, this guy’s wife is working at the agency and he has a very little experience and often call of the traders for advice on how to do things. I don’t trust this RE!

Yes I've had a problem with the smoke alarm 'service' pressure by my PM. Now they even want you to fill in a form of 'compliance' but more ominously I think they actually sabotage existing smoke alarms to pressure owners (especially those not living in the area) to  accept their over-priced service. I personally installed and tested a smoke alarm with a ten year battery life. A year later I inspected my unit and found the smoke alarm not working – the battery was taken out and put in backwards. The tenant would have no reason to do this as he was a good long term tenant, while at the time I noticed the person the management company had sent was very tall – they send the tall ones in to reach the smoke alarms without ladders. You might think that this is unlikely – but imagine several hundred properties being charged around a hundred dollars a pop for smoke alarm 'service' every year and the numbers (and the motivation) quickly add up.

Worse, have you had that same dripping tap 'fixed' by their plummer they send you several times in a year? Or perhaps that blown fuse – created by your tenants faulty electrical appliance – now requires the replacement of the whole electrical board even though you've never had a problem with it before? Those things have happened to me and – out of the four or so property management companies only one hasn't gone bad yet – but that one is a family run company whose members I know personally. There are conflicts of interest and fraud in just about every sphere of business  – and property management in Australia is no exception. Keep an eye on your PM!

I agree about watching your PMs…we have had some interesting experiences with ours of late. One double charging us for bills, another telling lies because she was lazy. I feel like I have to micro manager my managers which is frustrating!

I will say as a tenant that we always pull the battery out of the smoke detector. Bad I know but the thing is so damn sensitive we can't cook ANYTHING without it going off.