Rent reviews by property Managers.

Hi Folks, I am wondering what the situation is with a property manager under an Exclusive Leasing and Managing Authority, which states "Administer Rent Reviews", when the PM has not increased the rent in sixteen years?

My mid 90's year old father bought this place, and has had it rented and managed by this agent from the start.
Market comparables are currently at $210 pw and he is still on the original $135pw.

Is there any come back on the agent, and if so, how would it be calculated?

BTW the agent is well into his 80's

Property is in VIC.

Thanks.

 

I doubt there'd be any come back on the agent, but you probably want to call them and remind them that it's time for a rent review, then to start aggressively increasing it.

If they won't, then it's probably time for a new agent.

 

Has your father been instructing the PM to increase the rent or review the rent?

I'm not really convinced the PM has done anything legally wrong unless they have acted against express instructions from the owner.

 

No, he has relied on the Managing agreement in place with the agent.

Dereliction of duty perhaps?

The same agent manages a place for me and has increased the rent to maintain market value over a 27 year period.

 

Is it commercial or residential , and any sort of relationship(business) that you are unaware of.
Id imagine the place would have been paid off years ago.

 

Residential, only relationship is between my father and the agent, whether the agent and tenant have any relationship I do not know.

Yes on settlement day.

 

Except that "active" duty doesn't exist, short of something very unusual tee'd up either verbally or written into the management agreement.

To the contrary, all the management contracts I've seen try and go out of their way to absolve the PM of any legal liability, even if the actively stuff up.

 

Mid 90's was a long time ago. "Old Dad" was quite a bit younger. Perhaps he should have been a bit more proactive with investment. Normally PM want to increase rents because they work on a % to manage. Provided no link between PM and Tenant wouldn't you just have to "wear it"

 

That is his age, not when he bought it.

Yes 16 years younger, 78 to be accurate.

He employed a manager who deducted his fees from the rent.

I don't know, I'll have to test it I suppose.

 

Thanks, so what does "Administer Rent Reviews" require the agent to do?

 

Get a rent review done if its overdue

 

Probably to "administer rent reviews", when directed to do so.

 

Has any maintenance been undertaken during this time eg repairs, repaint, new carpet, flyscreens rewired, stove etc? That is, does $135/wk reflect the condition of the property and $210/wk what would be achievable if work was done?

 

There would have been some maintenance and repairs over that time to keep it in condition.

Market rent for it would be $210 currently.

 

Then make it happen

Blame is useless, just move on and get the job done for your dad, he's obviously not able to do it himself.

 

So just give the tenant 60 days notice and increase his rent by $75pw, more than 50% increase.

As a property manager yourself, how do you propose I make that stick?

Getting the job done is trying to recover the thousands of dollars of lost rent.

 

How do you recover thousands of dollars in lost rent because the landlord decided not to continually increase the rent.

 

I'm not sure yet, but I'll start with the agent.

The landlord didn't decide "not to continually increase the rent" the agent did.

 

As you have your own property managed by the same agent, surely you find them competent. So you convince the PM to send the tenant two documents. One is to increase the rent and the other is the notice to vacate. Tenant can select which one he prefers.
I guess the hard bit will be convincing Dad. What is the vacancy rate in this town?

You cant recover lost rent that was never charged or invoiced, you can only increase it now.