Agents preferred tradies - do some agents get kickbacks?

All or most real estate agencies have a list of preferred tradies who they will send out to fix a rental property on behalf of a landlord. Are there some agencies who gets kickbacks from some tradies? Is it legal for agencies to get these kickbacks? Sometimes it seems some of these preferred tradies on an agencies books charge ridiculous prices compared to other tradies not on an agencies books when we as a landlord call around asking them to give us a quote for a job.

 

Then use your own tradies.

 

But saying that would you let some total stranger into your house that I had picked because he was the cheapest, I had no idea of his history or his quality of work.You wont be there or just the wife and kids will be home.
If you are giving out keys to trademen to enter rental properties there should be a couple of minimum standards set for screening out people that may be undesirable .

 

This old chestnut again. Personally I've never seen any evidence of this practice happening.

 

Quite possibly

Is it legal for agencies to get these kickbacks?[/QUOTE]

Yes, providing they have declared this on the information provided to you eg. on the management agreement. If they don't declare these kickbacks they are known as 'secret commissions' and it is a breach of the Secret Commissions Act.

Maybe they give special rates to the agencies as they provide a steady stream of work.

 

I know of at least one agency servicing Brisbane who note they receive a "referral fee". They make this statement in their Form 6 Appointment. See below.....

For me, it is important to encourage landlords/owners to read the fine print of the Form 6 (and all contracts), and to ask questions.

 

I think sometimes the relatively high price of tradies through a PM is due more to laziness by both parties. The PM will gravitate to a tradie they know and have worked with previously and not look for competitive quotes. The tradie in turn will know they don't need to be too be competitive because the work is guaranteed.
What you could do is ask the PM to get at least 2 quotes for the work. It might help if tradies know they are quoting against another tradie for a job.

 

Quite a good income earner for an agency on a $5k job by just making a phone call to the tradie on their books. I'm sure there's a high percentage of landlords who just rely on the agents tradies and don't search for quotes themselves or ask the agent to get multiple quotes on a job.

 

That would be only if the PM tells both the tradies that the owner is getting multiple quotes done. Personally I would prefer to get 3 free quotes from different tradies to know which one could be overcharging and if each of them identify the exact same problems or fix more things for their quoted price.

 

i had a pm whose husband was running the plumbing business they used. My property had a lot of plumbing call outs for some reason.

 

Could that somehow be classed as a conflict of interest in some legal sense if the agency uses their family member's tradie business for the agency's tradie list?

 

Yes definitely a conflict

 

Wow. I haven't had a close look at the relevant law on this, but I would have thought this would be dangerously encroaching on professional conflict of interest rules, even if disclosed.

 

In NSW it's regulated by:https://www.legislation.nsw.gov.au/acts/1987-116.pdf

Also refer to the Crimes Act 1919.

 

A good agency would have at least 2 tradies for general maintenance, plumbers, electricians etc who are licenced, have insurance, good track record and are made aware they are not the only tradie on the books. I never let tradies do any work without the tenants presence or prior permission from the tenant.

 

I don't think its that legislation, which refers to secret commissions or corrupt acceptance of inducements.

Its more along the lines of common law fiduciary duties of an agent, along with the codified regulatory rules on REAs.

 

And so, and given the optics were obviously not ideal, they must have offered you a generous extended warranty on the work done?

 

My partner is an electrician and we no longer work for real estate agents (we deal with landlord directly). Agents want the job done yesterday but are always so slow to pay and always have an excuse as to why they can’t pay on time..

 

It's often because the PM isn't the one doing the accounting, nor do they have they experience(decency) to first check and see if there are cleared funds or likely to be cleared funds [held in trust for that Owner] in time to pay the invoice within the contractors requested due date. Most agencies do once or twice a month disbursements to owners, creditors, etc on the 1st & 15th of the month. To do an out of sequence payment requires manual effort and they make no money from that employee time so will simply delay or push back until the scheduled payments happen through bulk upload facility.

 

Yes I see your point. We’ve usually had to wait 3 months to get paid so it’s just not worth it for us to work for real estate agents... but each to their own! Probably why tradies through PM can cost more, an inconvenience tax!