Property Management fees on rent paid in advance

Discussion in 'Property Management' started by vdm, 1st Jun, 2017.

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  1. vdm

    vdm Member

    Joined:
    13th Aug, 2015
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    Location:
    Sydney
    I have found myself in a situation where my PM deliberately didn't follow my instructions and I would like to understand where the law stands on this and what options are available to me as the landlord. Sorry about the long post in advance, it's a tricky situation to explain.

    My previous tenant (property in VIC) vacated end of Jan early this year and I found the property manager wasn't able to find a tenant for close to 2 months despite me following up on regular basis trying to find out what the problem seemed to be. Finally, they managed to find a tenant end of March who paid the rent in advance for the next 12 months. I was asked if I wanted the full money to be released straight away and I gave clear instructions to only release monthly rent on ongoing basis and leave the remaining money in the trust account..so that I could spread out the income and tax evenly.

    The new tenant moved in start of April and I received no statement end of April despite me reminding them again and again. Finally, after having enough of this I decided to move away my business to another PM and gave the termination notice middle of May to facilitate move to the new PM by 1 July (start new PM from new FY). In the termination email (sent to the PM and copied to the agency principal) I clearly instructed to only release money until June and charge me the management fee for that, rest of the money should be transferred to the trust account of the incoming PM.

    Received the statement today (the last one received before this was end of Jan!)..and they have released me the whole money and charged me the management fee on all 12 months rent...even though they would not be managing my property for 9 of those months...which I am obviously not too happy about. I am not even sure how my incoming PM will respond to this when they won't have any rent collections for 9 months.

    Can PMs charge management fee for period when property wasn't under their management...in the event of rent paid in advance?

    Can I get them to re-issue me the statement following my instructions or is it too late?

    Where can I complaint because I think the current PM has done this just because they are not happy I am leaving them and they found a tenant who paid 12 months in advance?
     
  2. Trainee

    Trainee Well-Known Member

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    10,260
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    I'd check whether the power usage is off the charts.... who pays 12 months in advance?
     
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  3. abbyfresh

    abbyfresh Well-Known Member

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    I once had an insurance claim and the PM took out their percentage from the payout. I had to pull them up on that and square that off real quick.
     
  4. Xenia

    Xenia Well-Known Member

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    Money was received within their managent period they are legally entitled to take managent fees from all of it.

    New pm will receive rent from next payment in 9 months time. It should not bother them, they won't need to chase arrears for next 9 months. Easy management.
     
  5. Anthony Brew

    Anthony Brew Well-Known Member

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    How can it not bother them if they are putting in work and getting no payment?
    Not having to chase up money means less work, but they will be doing all the other work for free? Would you agree to that if you were in the new agents position?
     
  6. Xenia

    Xenia Well-Known Member

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    Andrew yes I would.
    I'm focused on results not money.
    It is what it is. I would not decline a client because a situation out of their control is temporarily not profitable.
     
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  7. vdm

    vdm Member

    Joined:
    13th Aug, 2015
    Posts:
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    Location:
    Sydney
    Thanks to all who have responded. The incoming PM is actually very nice and has offered a free month and offered their lowest management fees due to my situation, no one can work without money unfortunately and that is the reality.

    I am going to knock on VCAT's door for this one now...but for the time being I will have to pay management fees again for the remaining 9 months worth of rent :-(
     
    Mat and Xenia like this.