10 year old PM Authority: Do fees increase with inflation?

Discussion in 'Property Management' started by Hot Jam Donuts, 4th Sep, 2017.

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  1. Hot Jam Donuts

    Hot Jam Donuts Member

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    Hi all,

    Our PM (in Melb) has been the same since 2007, one year ago they were "taken-over" by another company called McGrath, who stated that fees will stay in accordance with the original management authority.

    So now the lease is up for renewal in December and they want to charge $8 for registered post serving of rent increase. Original fees schedule says $2.50 per registered post (at 2007 prices).

    I have an email from them stating that there are no changes to the original fees schedule, so can they still try to charge whatever fees they see fit, and since I never signed any new authority with them, they don't have grounds to insist those fees be paid? Do fees increase with inflation and even though you have set prices for certain things, they would increase regardless and you would be paying more due to inflation?

    Also the tenant has been quite difficult to contact, not returning phone calls, emails or letters. The pm had to go and knock on their door to solve one issue, yet to be solved!
    What do you do when nearly 5 months have passed, tenant has done nothing to change the WRONG amount for their electronic transfer to the trust account?
    The rent increased last December, and I became complacent, didn't regularly check my rent statements and realised 6 months later they were still paying the old rent value. We have been playing catch-up and reminding them each month that it's not the old rent figure, it's $22 more. In July they did pay an amount equivalent to the extra rent owed, but since then have not changed the transfer amount. Why should this go on for so long and what should my pm have done that has not already been done?

    HJD
     
  2. D.T.

    D.T. Specialist Property Manager Business Member

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    IMO The fees have to match what was written in the contract unless you've signed a new one.

    Tenant not paying the new amount of rent is a separate issue. Its likely they can't do very much to be honest - they have to be 2 weeks in arrears before they can be served a breach notice. So at $22 difference, it'd take a little while before 2 weeks worth is racked up. Regardless of that, we send letters out to our tenants who are late, but not late enough to breach, to warn them that their lease might not be renewed and their tardiness will be mentioned in references we provide. It usually kicks them into gear :)

    Seems a bit odd that you're looking to get issues resolved though, yet can't stomach a $5 fee change?
     
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  3. Hot Jam Donuts

    Hot Jam Donuts Member

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    @D.T I'd rather stomach a hassle free tenant, than fee increase and a tardy tenant. I will pay fees if I have agreed to them, not because the PM wants to charge them without notifying me first. My view, call me odd, but the pm should have advised me of their up-to-date fees policy and at lease shown me that courtesy.
     
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  4. Big Will

    Big Will Well-Known Member

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    Depends if there was a CPI clause in your original agreement or if you agreed to a new agreement.

    When a business takes over they cannot change the agreement but they can choose not to renew/cancel the agreement and make you sign a new one.

    The tenant issue is separate issue and not much you can really do besides constantly having the PM apply pressure to get the $22 - lesson learnt to check rental statements :) Just recently our family we charged for additional fees even though are family deal was not to have them included, picked it up on month one and refunds will be issued we are talking about $16 but the PM is at fault not tenant.
     
  5. Scott No Mates

    Scott No Mates Well-Known Member

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    If the business has been sold and a new licensee runs the business then a new management agreement is required as they have no authority to act on your behalf.

    Fees can be varied by the agency notifying you in writing (email will suffice).

    Commission will increase over time due to rent reviews.
     
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  6. Hot Jam Donuts

    Hot Jam Donuts Member

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    Have read the agreement twice through and boring as bat ****. No cpi clause. I just assumed the fees with % would cover rising costs. Set fees are stated and no mention anywhere in the contract that they will change under certain conditions.
    It's a grey area as I am not sure how it works with franchises getting "rebranded" and if the business was "sold" or not.
    I think it's time for me to dig deeper into the BS and get some answers from them.
    Good point raised. Thanks
     
  7. D.T.

    D.T. Specialist Property Manager Business Member

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    Nope, can just be reassigned. That's how rent rolls are bought and sold every day.
    I agree but you missed the point by choosing to read 10% of my post.
     
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  8. Scott No Mates

    Scott No Mates Well-Known Member

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    In NSW the agreement is with the licence holder for the business not with the business - when the rent roll is sold a new managing agent agreement is to be signed, transfer is not automatic and is a risk to the vendor, buyer only gets the agreements which are re-signed.
     
  9. DaveM

    DaveM Adelaide Buyers Agent & KFC Strategist Business Member

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    Personally I wouldnt want a 10 year old managing my property, I look for a PM who is at least 18.
     
  10. Tom Rivera

    Tom Rivera Property Manager Business Member

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    Can't charge extra without your agreement or a CPI clause (which I've not actually come across).

    Is the tenant otherwise good? Issues like these rarely crop up in isolation, if they're being painful here they're usually difficult elsewhere. They may need to be moved on.
     
  11. Lil Skater

    Lil Skater Well-Known Member Business Member

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    Can't charge without changing the authority, tell PM you will pay what is on the authority.

    Agree PM can't do much about the rent not being paid in full, but they should've notified you - not the other way around.