Bond Not Collected / Lodged

Discussion in 'Property Management' started by Wandercro, 31st May, 2017.

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  1. D.T.

    D.T. Specialist Property Manager Business Member

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    Dont have an agents capacity to tenants

    They aren't giving it to the agent anyway, we can lodge it for them, or they can lodge it themselves. Even after its lodged, it still belongs to them. Thats why LL/PM needs to make a claim on it, tenants never need to make a claim on it because its there's.
     
  2. thatbum

    thatbum Well-Known Member

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    Yeah unfortunately not correct - I agree with Terry on this one.

    Apart from the common law positions which Terry has started, there seems to be some more direct specific law on the issue - looking at the general tenancy agreement for QLD, clause 13 seems to cover the bond. It spells out that a tenant must pay the bond to the LL or PM, who then in turn has to pay it to the relevant authority for bond lodgement.

    If the PM didn't do that, then its a clear breach of agreement by the LL or PM(who acts for the LL), and a tenant could make a claim against the LL directly.

    Fortunately, I hope this won't be an issue because most states have a fund to cover this sort of fraud.
     
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  3. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    If the tenant hands it to the agent then the landlord could be liable. If it is never given to the agent then not.
     
  4. Perthguy

    Perthguy Well-Known Member

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    What happens in this situation... the tenant gives the bond to the property manager, the property manager takes the money and does not place the funds in his trust account and does not register the bond. Basically, the property manager steals the bond. At the end of the tenancy the tenant applies to have their bond back, but there is no bond. Who does the tenant sue, the property manager or the property owner?

    This is not a hypothetical,

    Last year, the Illawarra Mercury published an article on an agent who stole $93,000 in rental bonds, which were supposed to be lodged with the Rental Bond Board.
    Not knowing about real estate bond theft makes you a rookie
     
  5. MyPropertyPro

    MyPropertyPro REBAA Buyer's Agents Sutherland Shire & Surrounds Business Member

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    @Perthguy that's the whole point of this thread and basically the exact same situation.

    @thatbum it is absolutely correct!

    At the end of the day, OFT is the governing authority over this whole debate and obviously we're not going to agree. We speak to the OFT about this and other bond matters all the time and their number is 137 468 if anyone wants to call and do their own research.

    Otherwise...it's been fun!

    Cheers
     
  6. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Why do u refer to OFT?

    They may make orders against an agent which is within their powers. But that doesn't mean the landlord is not liable to the debt owned to the tenants. And it is a debt because it is money owed to the tenant.
     
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  7. Scott No Mates

    Scott No Mates Well-Known Member

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    @Terry_w - the question then remains, when did the agent lose their licence and whether this is covered by the agents fraud fund (funded from the interest earned on agents trust accounts), by the agent's compulsory professional indemnity insurance or by the owner as a last resort (the management agreement covers misconduct/negligence of the agent so the agent should be joined in any action against the owner for failure to Lodge the Bond).
     
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  8. Wandercro

    Wandercro Well-Known Member

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    Thanks to everyone that has contributed to my initial post. Below is an update from the receiver.


    As to the bond. It is the claim of (Property Manager) that he was mislead over this and “didn’t get the Bond lodgement Form 2c from the Dept of housing Bond Loan back before the tenancy started, so the bond people wouldn’t pay so no Bond was lodged.” Effectively, there is no bond.

    You or your new managing agent will need to take this up with the tenants .

    Per the above we are now speaking to the tenant to re apply for the bond loan.
     
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  9. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    What do you mean by 'bond loan'?
     
  10. thatbum

    thatbum Well-Known Member

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    Probably some sort of interest-free loan scheme for low income earners to borrow the bond amount from the state housing authority - WA has a similar scheme.

    Well who do you believe? You said earlier the tenants had said they had already paid the bond.
     
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