Property Manager witholding rent

Discussion in 'Property Management' started by jchw38, 4th Sep, 2019.

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  1. jchw38

    jchw38 Active Member

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    Hello everyone,

    Does anyone here know what the law in Victoria is in relation to this property management issue:

    Recently I changed property managers for a couple of my investment properties in Melbourne (3 weeks ago) due to ongoing late rents from tenants, poor management of maintenance issues and non-communicative style of the previous property manager.

    After I changed property managers, the tenants forgot to change their scheduled bank payment and inadvertently paid the previous manager instead. This was 2 weeks ago. Since then the previous property manager has held onto the rent and refused to disburse the rent to me. After attempting to contact them multiple times by phone/email, and receiving no response, I finally warned that that I would take legal action if they continued to hold on to my rent. The director of the agency then finally then responded and said he will only release the funds unless we paid a $399 file preparation/handover fee.

    However, no where in the landlord authority which we signed could I find any statements relating to a "file preparation or handover fee". Therefore is what they are attempting to charge legal? Or is this kind of like a blackmail/taking funds hostage attempt by this real estate agency? Would VCAT uphold such a fee if challenged in court? I have never ever previously encountered such a fee as standard practice by any other property management agencies.

    Any advice or insight would be much appreciated. Thanks in advance!
     
  2. TMNT

    TMNT Well-Known Member

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    Wtf..... that is ludicrous

    100% doublecheck there is no $399 handover fee would be the first step
     
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  3. jchw38

    jchw38 Active Member

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    ok i'm glad to know that i'm not the only one just speechless at what they are trying to do.

    and yes i have double checked the landlord authority contract that I signed and I couldn't find any wording about a "file preparation fee for handover". I have also requested that they find and point out to me where such a fee exists in the contract and they have not responded again...

    so does anyone know whether VCAT would automatically strike out their attempted charge if I needed to take it that far?
     
  4. Terry_w

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

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    It would seem to be the tenants problem. if you instructed them to pay the new agent and they didn't they would still owe you the rent, so get them to recover the money.
     
  5. jchw38

    jchw38 Active Member

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    Is it legal to make the tenants pay me the previous month's rent and ask them to recover the funds back for themselves though? I am happy to do so and ask the tenants only if I have legal backing, as they will likely put up a resistance.
     
  6. Terry_w

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

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    I owe you money, but I pay Bart instead - why would you be chasing Bart?
     
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  7. Dean Collins

    Dean Collins Well-Known Member

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    I wouldnt go that route....this is an issue between you and the property manager - the landlord should be the one chasing this down legally.

    You've done all you can eg ask them to show you where you agreed to pay $399 file preparation fee etc.

    If after a period of time they ffail to respond - take the next step of legally pursuing them
     
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  8. TMNT

    TMNT Well-Known Member

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    typically, if the relationship between LL and PM has broken down for whatever reason, the PM wants to get rid of you, so they usually waive the 30 days notice etc unless there is other outstanding matters,
    in my opinion any agent that withholds files, or insists on 30 days or charges a fee is vindicitive

    you could ask the tenant nicely to pay again while you chase it but thats not likely going to happen, unless you have a tenant that is willing to take responsbility for their mistake,

    as #terryw says you have to chase the tenant for making the mistake,

    regardless you need the files from the PM, and withholding files is a ***** move

    one thing I would recommend AFTER this is over, is to write a big complaint on google, FB and anywhere else you can
     
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  9. Scott No Mates

    Scott No Mates Well-Known Member

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    In this case, who is Bart? I have unfriended him on FB.

    As for the file - why hasn't the new agent collected this along with the keys when they took over the property?

    The new agent should be feigning ignorance and getting the tenant to pay the outstanding rent - it should not become your problem that they have paid the wrong agent.
     
  10. jchw38

    jchw38 Active Member

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    The new property manager has managed to get all the files and keys after some delaying tactics from the previous manager, so that is not an issue. THe only issue, and is quite major, is that the previous manager is holding my rent hostage and refusing to disburse unless I pay this "file preparation fee" that they just suddenly made up. Seems to me a bit of an vindictive extortion attempt.

    I have dealt with a number of major franchise agencies previously in Melbourne and not one of them has ever done anything like this. At least on this aspect of change over, they have all being professional. But this small agency seems to be the worst mob I have ever dealt with.

    I am just going to name them and shame them publicly now for their deplorable vindictive tactics - Investors Choice Property Management (ICPM).
     
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  11. jchw38

    jchw38 Active Member

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    For sure I will be writing a big review on my experience to warn everyone on the internet, but for now they are holding hostage thousands of $$$$ in rent.
     
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  12. Scott No Mates

    Scott No Mates Well-Known Member

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    @jchw38 - as @Terry_w has replied, this is your tenant's problem (which affects you). The tenant has paid to the wrong account and should be seeking the money be returned to them however your agent should be chasing the tenant for the arrears, they need to put pressure on the tenant for non-payment of rent now that the rent is 2 weeks overdue.
     
  13. jchw38

    jchw38 Active Member

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    That is a good analogy! Thanks for your advice.
     
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  14. jchw38

    jchw38 Active Member

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    Good point, thanks! I shall speak with my new property manager about this.
     
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  15. Dan Wood

    Dan Wood Well-Known Member

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    I had a similar problem when I purchased my IP, the previous PM held 4 weeks worth of rent as the tenant paid in advanced.

    I called, I emailed. Nothing had happened in over a month. The ledger was right there in front of me, it had their company name on it ... I didn't understand why they were being painful.

    It took a call from my solicitor to sort it out... It was done the next day. They wouldn't transfer it to me they ended up returning it to the tenant which is fair as it's technically his (see in advance payments).

    I'm not quite sure what they were hoping for (interest?) I had all the proof all the documents they just made it extremely difficult..
     
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  16. Marg4000

    Marg4000 Well-Known Member

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    Get in touch with the Department of Fair Trading who should know the correct authority to contact.
     
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  17. dabbler

    dabbler Well-Known Member

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    Not only that, but the old agent can take fees if you want them to handle it.

    Tell tenant to get funds back, give them time to pay whats owed.
     
  18. D.T.

    D.T. Specialist Property Manager Business Member

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    If a tenant paid me that wasnt supposed to, id be sending it back to the tenant so they can pay the right place.
     
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  19. Dan Wood

    Dan Wood Well-Known Member

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    Some seem to think they can hold it even without a form 6 (QLD)....
     
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  20. D.T.

    D.T. Specialist Property Manager Business Member

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    If no form6 or MA in other states, then you're not the agent. Money landing in your account is not yours.
     
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