Help please - property manager not releasing files for handover

Hi,

I have a problem with my property manager of which I am moving away from.
I explicitly had them put in the contract:

In the event of termination by the property owner, handover can commence as soon as commission up to and including the date of termination has been paid in full​

Here is my last email to her which explains most of the situation

XXXX,

I have tried to call you 3 times today already and have been told that you are unavailable.
I gave you instructions over a week ago that I am transferring management to XXXX.
You are receiving your emails since both you and XXXX (business owner) replied within 8 minutes of that email in an attempt to retain me as a customer, which I replied saying I will not be changing my mind.
The following day, a week ago now, you received an email from XXXX under my instructions and with written permission to you in advance, asking when the files can be picked up.
Both you and XXXX ignored this email.
You had another email sent by him since then which you both also ignored.
You are in breech of the contract which Gerard Partners has agreed to via email and also in your handwriting in the new contract stating clearly that

In the event of termination by the property owner, handover can commence as soon as commission up to and including the date of termination has been paid in full.

Now you are telling me to wait another week to pick up the files until the end of month accounts are done. This is not a valid reason to delay the transfer and has nothing to do with handover. You are continuing to breech this legal agreement. It does not require your accounting system to reach the end of the month to do handover, nor does it require 14 days to handover files.

Delaying this has no benefit to you since you get paid for the 30 days from notice anyway, It prolongs this situation for not benefit and you continue to break the law by doing so. Are you waiting for me to contact my solicitor?
Please provide a date of either tomorrow, or Monday at latest, when the files can be picked up.

Regards,
XXXX​

The reason for urgency is that any rental increase needs enough notice which is very near, so my new agent needs access to meet the client, do rental appraisal, and send out these documents in time to be received without enough time. Also they might end up delaying it further making this impossible.

She replied with

Please contact your solicitor as I don’t mind speaking to someone who makes sense. ​

The entire point of putting that in the contract is to avoid them holding my property to ransom and they seem happy to breech the contract. What can I do here?

 

I would probably just deal with them later and get on with managing the property in the meantime.

What files do you actually need in the next week? If you want to do a rent increase, I would have thought you could just do it now.

 

Yes once we realised they were ignoring us, the new agent asked me for the tenants name from the rental income statements so that he could send a letter without waiting for the contact information in the handover. So that is moving forward now. Email/phone number would have been quicker but don't have those, which was what I was hoping for in a quick handover.

I am not sure if there will be problems with the a new agent sending a letter to the tenant without having any other information about the tenant, as anyone could knock on the door or send a letter and claim to be such a person, but maybe I am worrying about a problem that may not be.

Thanks for the response.

 

Give the agent a letter of appointment so they may pass this onto the tenant.

 

Not a good idea to say to someone you are contacting your lawyer ...they know that costs money for you.
I had the same problem as you in Wagga many years ago...luckily it was a franchise real estate so I emailed them that unless the lease documents were given to my new agent ( who i told to go over to their office to pick up the docs and wait there)I would be emailing the Managing director of the franchise and making a time to visit him in his Sydney office, I then emailed a unsent copy of my email to the Wagga franchsee that I would send to their Managing Director...just saying that I would probaly probably try to meet him for breakfast this week and I explained the problen of his franchisee and went into detail about how good-looking he was and cant wait to meet him to discuss all my problems.
I then went into detail about the Cafe next door to the head office of the company.
Of course I didn' send it to the M.D. but the threatened sending of the copy made the Agent actually rush to the new agent and hand over the files.

 

Yeah unfortunately it's a family company. The PM is the daughter of the company owner.

I am really not sure what to do in future if they can just ignore a contract. I'm wondering if making a penalty clause in there also would help (as in the second paragraph below).

In the event of termination by the property owner, handover can commence as soon as commission up to and including the date of termination has been paid in full.
In the event of termination, if handover does not occur within 7 business days from the date of a new agency requesting handover, commission for the 30 days termination period will be forfeited.​

At least now I know to get the tenant contact information upon a new lease being signed as well as other existing property I have.

 

Drafting more clauses isn't the solution. I think you're better off putting your energy into keeping a track of what is happening on the managed properties.

I have a few PMs and I self manage some of my other rentals. For the ones with PMs, I have enough information and documentation that if my PM wasn't there, I could pick up from where they were up to pretty much instantly.

For example, I was surprised to hear that you didn't have copies of contact details and lease documents.

 

Yes I suppose having contact details would be enough of a way to correct this in the future.

I have only been owning property for a couple of years and there is a lot of things that need checking. I am picking up on more and more of them but it takes time to learn all of these things.

Could I ask if you contact the tenant directly to check up on the property manager?
Or rather, can you list situations when you would use their contact details if there are any others besides when terminating a PM?

 

By the way, last year I asked to see the tenant application for another property (in Melbourne) and the response from my PM at the time was

The tenants sign a tenancy application form for our office not for our office to pass on their person information that we require​

A tenant application is not the same as a lease agreement, but when I ask for a copy of the lease agreement shortly, what should I say if they respond with the same thing?

 

Yes I would have no qualms contacting the tenant for whatever I felt necessary, including asking if the PM was doing their job to my satisfaction.

At the end of the day, a tenancy is a contract between the landlord and tenant, and a PM is just there to do as you instruct (at their core anyway).

Well your PM needed a brush up on exactly what their role is. A LL should have full access to the application paperwork - its more the LL's property than the agent's. This applies especially so to the lease agreement.

 

Good advice above! Some PMs get a little funny about you contacting the tenant. Whilst there is some degree of understanding to this depending on why/what the owner is doing (remember, some landlords aren't very good at being landlords either), the main question would be why they don't want you contacting your tenant.

See, a lot of PMs have an accountability problem. They pretend they never make mistakes and don't like to be told when they do. Some don't like you contacting the tenant because then they can tell you whatever they like with regards to how the tenant is being treated by them, whether it be unreported maintenance or the tenant's phone calls and emails not being returned either.

By having the ability to contact your tenant, it inserts a level of accountability that makes the slack PM uncomfortable as there's now a cross check between what they're telling you and possibly what is actually happening. For a PM who is doing their job and doing it properly there should be no issue if you contact your tenant periodically to check that they're happy. I am not necessarily advocating that you should do this - some tenants will just use it as an opportunity to unload on you and will forever more have your contact details, so tread with caution - but there should be no issue if you choose this route.

I have always viewed it as though I am the CEO of my portfolio and my PMs are the staff who I employ to work on my behalf to look after my customers, the tenants. With any good business, customer surveys are the norm as it gives management the opportunity to check that systems are working and the customer is being delivered the service they are paying for, in addition to seeing where improvements can be made. I don't see it any differently with a property investment portfolio.

Property investment is hard work and there often is a bit of disconnect between what a PM is actually there to do. As @thatbum has said, the PM is just there to broker the relationship on your behalf but they are still your tenant and it is your property meaning that you must have oversight and can do whatever you like within the bounds of the law. The buck stops with you, whether that is customer service based or legal. The contract is between you and the tenant.

Managing the manager is a skill set in itself and investors should continue to invest time and energy in learning about property investment to enable them to do this. Most PMs have absolutely no idea when it comes to holistic property or property investment knowledge and most don't properly understand the legislation pertaining to their own profession either (they will all tell you they do though!).

Keep at it and cross check everything.