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Arrears by tenants, are agents liable?

Discussion in 'Property Management' started by TMNT, 6th Jul, 2016.

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  1. TMNT

    TMNT Well-Known Member

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    im a reasonable person,

    ive just changed management agencies for a few properties, due to our relationship breaking down,

    out of the 7 props, 1 was up to date, 1 x 2 months arrears, 1 x 1 month, 2 x 2 weeks,

    I didnt know of any arrears, and the 2 month one the last I heard was a few months ago was something about a payment plan, but I didnt hear back so I assumed it was fine,

    and yes, I didnt check my statments as well as I should so im happy to own up for that

    my new PM says yeah agent is liable and they would compesnate or at least do something,

    are agents liable either morally, professionally or legally?
     
    Last edited: 6th Jul, 2016
  2. Biz

    Biz Well-Known Member

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    How can you not know a tenant is in arrears? Don't you notice there is no money going into your account? I don't really see how you can blame the PM sorry.

    Off topic but you seem to have a constant stream of problems, do you think it is time to maybe evaluate the way you invest?
     
  3. D.T.

    D.T. Adelaide Property Manager Business Member

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    Legally probably not. Professionally yes. Morally yes.

    The management contract gives the agent the power to act on your behalf in relation to the properties and so should have been doing that.

    PM's can't really prevent problems - all the tenant screening in the world isn't going to matter when somewhere down the track they have a relationship breakdown, lose their job, etc. However, I do think its important to keep owners up to date at every step of the way and be in control of the situations faced (which they clearly weren't).
     
    MyPropertyPro likes this.
  4. TMNT

    TMNT Well-Known Member

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    it has crossed my mind recently, I am the common point of all of these problems

    that beijng said, I have a lot of IPs, so it is only a proportion
     
    Last edited: 6th Jul, 2016
  5. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Agents could be liable in negligence or breach of contract.
     
  6. TMNT

    TMNT Well-Known Member

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    im not a legal person, but what is the contract? is it a relationship between agent and landlord

    or is the contract more specific eg, they will manage your property according to law?

    obviously arrears arent the agents fault, as Sh ! t happens, but isnt keeping on top of it, their job/responsibility?
     
  7. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    The contract is the agreement between the landlord and the agent - the management agreement.
     
  8. trinity168

    trinity168 Well-Known Member

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    @TMNT -- have a system in place. I have setup my yahoo calendar, and I place in when interest payments are due for the IPs, and when rents are due. I check the bank account. When we started out, we just trusted the systems to work, but, I now I have changed my mindset about it.

    Initially, we thought property is passive investing, but that is not totally true.

    Good luck. One of properties, tenant is in arrears to 2 weeks now. Second time it has happened, first time, I just told the PM to give them the breach notice. Tenants paid up. Now back in arrears, tenants said they paid the wrong agent, which I think is ****. Anyhow, we will find out on Friday if they pay or get served.
     
  9. MyPropertyPro

    MyPropertyPro SE Qld Property Management & Investor Services Business Member

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    Legislation will differ for each state obviously however with QLD - any issues you have with the agents business practices or their code of conduct could be raised with the Office of fair Trading to investigate. If for example numerous complaints have been made regarding the same agency then yes possibly further action could be taken.

    The management agreement signed between the agent and landlord is a legally binding contract and agents must act at all times in their clients best interest. If any of the circumstances below have occurred, then I do believe your agent is certainly not acting in your best interest as per the management agreement.

    -Property Managers have not communicated to you why the tenant is in arrears or followed up
    -Have not kept you informed of the process and progress
    -Have not issued the appropriate breach notices or attempted to resolve the issue
    -Did not ask your permission for a payment plan etc
     
  10. marty998

    marty998 Well-Known Member

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    Can PM had a policy that all rent is collected by Direct Debit? Mine does.
     
  11. trinity168

    trinity168 Well-Known Member

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    hi @marty998 , tenant has been there for 10 months, I've had the same PM for those 10 months as well. I do not think they paid the wrong agent, I think they are just buying time.