Agencies offering rental guarantee

Hey all,

Just been doing some research and was wondering what everyone's thoughts were regarding agencies that offer rental guarantees. I'm referring to the idea that if a tenant is in arrears that the agency will pay on behalf of the tenant and when the tenant has paid they will repay themselves. Can agencies legally disburse themselves from the trust account? What are the laws around this and is it in the best interest of landlords?

Thank you in advance.

 

I didn't know agencies that offered this existed.

 

They do and I wonder how!!!

 

That sounds super dodgy...

You can have landlord insurance in place to cover loss of rent (conditions apply) but some rental agency doing it?? I'll call that a scam of the decade..

Cheers,

 

Avoid

 

A more common term would be called "lease back", basically the Agent rents the property from the Lessor and then is allowed to sub lease it, naturally the incentive here is for the Agent to profit but some Lessor's don't actually mind the certainty of guaranteed income albeit less rent than you'd expect in a typical arrangement. This kind of arrangement is more common/suited to short term accommodation and often how businesses like Quest, Oaks, Mantra, and motels operate. It also allows the managing party to set rates across the board - not having to ask each owner what they want etc, helps with advertising and marketing the hotel/motel.

 

Not quite Michael. Thanks for taking the time to respond though. But there is literally agencies out there who offer rental guarantee for tenants 6 days in arrears to pay the landlord from the agency itself. My question is, how are these agencies disbursing money from their trust account to themselves? Is this legal?

 

Yes its legal. It doesn't come from trust account.

The main reason to avoid it is that if an agency says they'll pay if not rented in X days then that means they're going to get whoever in there so they don't have to pay.

 

So if an agency has a procedure in place whereby they tell landlords that if the tenant is late in making their rental payment after 6 days, we will pay on their behalf. The tenant then pays 8 days after into the agencies trust account. The agency then disburses to themselves? Trust money is being disbursed to the agency.... is that legal? Can't imagine it would be.

 

Trust account money gets disbursed to operating account everyday, how do you think management fees get paid?

 

Yes i'm referring to an agency disbursing itself with rental payments to repay itself for paying the Landlord.

 

Talk to the OFT.

 

Why don't you post an ad for an agency that does this?

 

An example of a quasi rent guarantee: 4 Power Guarantees

 

is that a real property agency???

the website looks like it was created by a bunch of jehovahs witnesses

 

Thats heaps better than their previous, they used to be called the Pirates

 

Lmao the company is called Property Management Pirates. Just inspires confidence

 

I am simply lost for words....

 

Looks like someone was trying to post an advertisement.

 

A bit like PHANTOM REALTY - there one day, gone the next (with your moniez haha)