Bond Not Collected / Lodged

Having some issues with PM and changed. New PM discovers no bond lodged with RTA (QLD)!

Surely a competent property manager would have collected the bond and lodged it prior to tenant moving in? Isn't this management 101?

Tenant claims they have paid it, waiting on proof. Where do I stand with this?

 

Contact REIQ and lodge a complaint as that is highly illegal and unethical. Big trouble when you mess with a trust account.

 

If it was collected, the agent will have provided a receipt either electronic or paper. Tenant should have a copy of the EFT or paper receipt. It is the agent's issue to find the deposit/receipt and make up the missing Bond or try to collect the Bond if it hasn't been paid and requested.


Edit: Just noted that you've changed agent. The previous agent would be liable if the tenant can prove that they'd paid the bond. If they haven't then the new agent can follow up to collect it (provided that it had been requested by the previous agent).

 

You are liable. You may have to sue the old agent to recover any loss you incur.

 

If the tenants have paid and the bond not lodged with the RTA, its the Office of Fair Trading you will need to lodge a complaint with as its stealing from the trust account

 

You will need to check your statements that the previous agent didn't disburse the bond as rent in advance.

 

Colin, not sure if they will be of any help. Apparently the PM was trading unlicensed (expired)!

 

Per reply to Colin, OFT placing PM in receivership. Any other suggestions?

 

REIQ is the employers association, Fair Trading is the regulator.

 

Doesn't look like it. Below message from OFT;

"I cannot see from the ledger any bond collected."

 

You are liable to the tenants. You will have to try to recover the money from the unlicenced agent, or just write it off.

 

This is highly concerning. I don't even know how that amount would be entered into a trust account and lost. It's borderline impossible.

There is some incorrect advice being issued above. Contrary to popular belief, the PM is lodging the bond on behalf of the tenant, not the owner. The bond belongs to the tenant and it is only the norm that the PM lodges it on behalf of the tenant to confirm that a bond has been paid. The tenant by all rights can actually lodge the bond themselves. Therefore, there is no liability on behalf of the owner, the claim will be the tenant against the PM.

On a very technical level, the tenant is actually in breach of the tenancy agreement in this case as the bond hasn't been lodged and the onus is on them to check that it has. In reality, this normally doesn't happen and obviously this is an unfortunate set of circumstances that is in no way the tenant's fault as they have been let down by the property manager. There is no requirement for the PM to provide a trust account receipt for an EFT payment in Queensland. The tenant's proof will be their transfer from their bank account if they have paid in EFT. If they have paid in cash and not received a trust account receipt (which is a requirement if paid in cash), they are in trouble. If the bond is unrecoverable, the tenants are the ones who will be out of pocket.

The only minor difference will be if the owner is making a claim on the bond. In that case, the portion of the bond that the owner is claiming on will be unrecoverable and the claim for that portion will be between the owner and the PM.

 

Reporting to reiq / oft won't do much at this stage as they've already been caught for issues and put them in receivership.

From memory, there's instructions on most receivership letters from OFT on how to make a claim on the assets of the trust account.

Unfortunately this agency has been involved in a few issues so there might be a line. This is the first instance of a bond issue that I'd heard of though, others involved not disbursing rent.

First priority should be to obtain proof that tenant paid it. They'll have a receipt from agency hopefully, or at least line item on their bank statement. This will substantiate your claim.

In the meantime get everything back on track with new PM and everything will soon be rosey again.

 

Same applies in NSW - as I noted, the tenant would have a copy of their EFT (no receipt required).

If the tenant does recover their bond through the compensation fund, then it will need to be lodged as should have been done initially.

 

Hard to believe - everything has a receipt here

 

Yes and no. I can see a receipt would be convenient and good practice, but logically I can see why it's not required given there is a very clear stamp of when and how the payment was made.

So does that make Queensland or South Australia a little further ahead?

 

SA IMO, everyone getting a copy can never be a bad thing. It might lead to prevention of the OPs issue or at least make it simpler to resolve. Trust Accounts are serious business - everything going in or out should get a record, and so should the person it involves.

 

I didn't imagine for a minute you were going to say Queensland....

 

The transaction should be recorded in the agent's software or ledger upon receipt (or day after receipt when the description is available in the account). A receipt can be generated at this time if required.

 

Under the law of agency where someone hands money to an agent it is the same as handing money to the principal direct. So where the tenant has given money thinking it is bond it is a debt owed to the tenant by the principal.