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Letting agent: change to end of month payment of rent

Discussion in 'Property Management' started by Greyghost, 5th May, 2016.

  1. Greyghost

    Greyghost Well-Known Member

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    So I received an email from my rental agent (QLD Properties)
    They said their Trust Account Auditor has told them that they are not allowed to process and pay rental payments to landlords prior to the end of the month anymore..
    Instead they will pay on the 1st/2nd of the month...

    I reviewed the Agents Financial Administration Act 2014.
    I have not found any legislation on what would prevent the agent from paying me..

    To me it sounds like they are just struggling with their end of month reconciliations and by paying all funds out at the beginning of the month it makes their book work much cleaner...

    Maybe @Xenia can clarify this...

    I the meantime, I have obtained the trust account auditors details and sent him an email clarifying..

    I know it is not a big deal to call the banks and get my loan payment dates changed and sure I will organise (or leave enough funds in offset), however I just want to know if the agent is being truthful or it is actual legislation...
     
  2. D.T.

    D.T. Adelaide Property Manager Business Member

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    I've never seen any rules in any state governing when payments are made.

    The nature of a trust account (used by real estate agencies, law firms, accountancy practices, etc) is that the money is held on trust, ie belongs to client not the company, so doesn't make any sense that there'd be rules around when it goes to who it belongs to.

    I'd say this is a convenience / process matter.
     
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  3. Scott No Mates

    Scott No Mates Well-Known Member

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    Tell them that you want it fortnightly and cannot accept the changes.

    That way it's not the EOM. ;)
     
  4. kierank

    kierank Well-Known Member

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    All of our properties are in Qld and all of our PMs pay us bi-monthly. One payment is around the 15th of the month and the second payment is before the last business day of the month.

    Most PMs issue bi-monthly statements to match the rental payments while some issue monthly statements.

    I don't mind when the statements come in as we typically update our books once a month.

    I like the money coming in bi-monthly as IT IS OUR MONEY and it helps with cashflow (especially those interest payments).

    Surely, they aren't all breaking the law!!!!!
     
  5. Greyghost

    Greyghost Well-Known Member

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    I have fortnightly payments, so the mid month payment doesn't change.. But the end of month (the other 2 weeks rent) has been pushed into the start of the following month..
    Has got me stumped!
     
  6. Greyghost

    Greyghost Well-Known Member

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    Exactly. I think they are using the trust acc audit as an excuse to improve their efficiencies of bookkeeping in house.

    - Kind of like when your employer tells you that you will be going from fortnightly pay to monthly - so that the payroll officer halves their workload....
     
  7. Greyghost

    Greyghost Well-Known Member

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    I did read (somewhere around section 20) that funds must be released on written request within 14 days...
     
  8. kierank

    kierank Well-Known Member

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    It is all done by computer these days. It would be a matter of "do you press the Send Money button once a month or twice".
     
  9. Lil Skater

    Lil Skater Well-Known Member Business Member

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    Yeah, they're just making it easier for themselves - or they've hired an external company to do their trust accounting who offers monthly only.
     
  10. Magnet

    Magnet Well-Known Member

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    Hey @Greyghost,
    We are with the same agency and were also puzzled by this as we've never heard of this before and frankly it sounds like BS. It doesn't really effect our personal account keeping but we are not fans of being taken for a ride.
    On another note, I had been worried that things were slipping a bit since the change in PM. I recently spoke to Courtney about a report received by an electrician regarding the oven in our IP. I was pleasantly surprised by her efficiency and the electrician was also great 'educated our tenant' on the use of the grill which he had reported as broken and did a safety test on it whilst there repairing the thermostat on the water heater. Impressed with the fact that he wrote to us to say the oven didn't need replacing and he estimated it had 1-2 years good life left!
     
  11. Greyghost

    Greyghost Well-Known Member

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    I'll pm you late on cheere
     
  12. JacM

    JacM VIC Buyer's Agent Business Member

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    I just got a new wrinkle on my forehead trying to understand why a PM would pitch such a transparent story.
     
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  13. DiligentPM

    DiligentPM Well-Known Member Business Member

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    There is a need to input data every time there is a transaction or payment of an account on behalf of an owner, sometimes accounts are to be paid right at the end of the month translating to the disbursement being sent the day after...trust accounting is very time consuming if double checked and undertaken correctly with agencies having to ensure 100% accuracy with regular auditing in place

    http://www.cpaaustralia.com.au/documents/seam-compliance-audit-real-estate-agents-trust.pdf
     
    Last edited: 21st May, 2016
    Pumpkin likes this.
  14. DiligentPM

    DiligentPM Well-Known Member Business Member

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    Skater, is that not a big risk? I would want to see a lot of risk management processes in place to outsource trust accounting externally...so important to have safeguards in place around this critical financial responsibility...
     
  15. Lil Skater

    Lil Skater Well-Known Member Business Member

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    Oh god, I don't do this. Hell no! I don't want anyone having access to my trust account. It's so highly regulated and puts me at huge risk of losing everything should someone pull a dodgy.

    I don't really know how it works with these external companies, but I do know that they don't do it as often as an agent may otherwise.
     
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  16. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    Maybe the trust account is being dipped ?? 4 weeks hides dodgy's ?

    A trust account audit is annual and would have zero impact based on payment frequency. All it does is double the number of client disbursements from the trust ledger. I call BS on this excuse.
     
  17. DiligentPM

    DiligentPM Well-Known Member Business Member

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    Skater we are on the same page on this one!

    I was asking how some agencies could even consider outsourcing such a highly regulated and high risk activity...we never rush our disbursements to ensure accuracy...I would rather be a day late than rush a disbursement through
     
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  18. Wukong

    Wukong Well-Known Member

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  19. Lil Skater

    Lil Skater Well-Known Member Business Member

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    @DiligentPM, I have no idea. I think it would have to be cheaper for them to hire someone to do it once a month or something, rather than a full time staff member.
    I was doing temp work at an agency a few years ago, they had their receptionist doing their trust accounting and the director was signing off without checking.
    I don't get it. It's not my favourite part of the day and I could surely manage more properties if I didn't worry about running the business myself, but I like being hands on and I couldn't fathom someone else doing such a big part of the job. Not even James who was an accountant for years has access.
     
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  20. Magnet

    Magnet Well-Known Member

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    Any good or bad experiences to report?
     
  21. allegria

    allegria Member

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    My QLD agency also changed from end of month to first business day of month, back in April/May 2015.

    DUE TO THE RECENT CHANGES TO THE ACT, WE ARE REQUIRED TO DISBURSE AFTER THE LAST DAY OF THE MONTH. THEREFORE FUTURE DISBURSEMENTS WILL BE THE FIRST BUSINESS DAY AFTER THE END OF MONTH. MID MONTH PAYMENTS WILL REMAIN THE SAME.