QLD Seeking advice on major Real Estate / PM issue in Brisbane

Discussion in 'Property Management' started by Jezal, 1st Nov, 2019.

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  1. Jezal

    Jezal New Member

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    1st Nov, 2019
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    Location:
    Sydney
    Hey everyone,

    Long time lurker but I haven't really posted since the old Somersoft days. I've been debating whether or not to talk about this here but a mate of mine convinced me so here we go. This whole episode has been the dogging me for the last year so it's been quite stressful. I will keep everything anonymous for now but I will just say that these issues relate to a major Real Estate Agency in Brisbane. I will refer to them as REA.

    I am also interested to find others who might have been caught in the same situation as me. If you have, you should be able to identify who I am talking about pretty easily. If nothing else, my experience might be useful to share for other investors.

    Summary

    I had a few properties managed by this REA from 2017ish (I am no longer with them). In 2018, two set of tenants vacated my properties and the PM at the time talked to me about needing to renovate / repair the properties so that it can be rented out. I later found out that she was colluding with a particular builder to defraud me on shoddy work. The REA fired her eventually but still kept lying to me about the reason for her firing and also the state of my properties (I will explain below in detail).

    Detail

    The renovation and repairs were done through a number of vendors but some of the key work was done by this one Vendor X, who did the painting, the bathroom and the kitchen. The PM vouched for this builder strongly and because up to that point, she's been quite good in managing my properties, I trusted in her judgement.

    Property A was renovated with a few minor hiccups and eventually she managed to rent it out. This took a few months which was slow but still sort of manageable. The renovation work on Property B took a ridiculous amount of time (6 months) and the PM kept making excuses on why it wasn't done every time I chased. At that point, because I had been locked into it, I didn't feel like I had much choice except to continue.

    About four to five months into the Reno on Property B, I got a call from REA saying that the PM had been fired. When I asked why, they told me this story about how she was verbally abusive to their receptionist. Something seemed off so when I asked around my investor circle, I was told that something dodgy had happened. That they heard the REA fired this PM because they suspected her of colluding with the builder.

    At that point, I had no trust left in the REA so I thought to cut my losses and move to another agency. It wasn't until after I moved and done a inspection that it became evident how bad the renovation repair / work was. The bathrooms in both properties had cracked tiles, not-to-code drainage, leaks, non-waterproofing, the list goes on. My new builder tells me that it was the worst bathroom they've seen in 20 years and the paint job and kitchen and everything else was also atrocious. These issues occur throughout the property and the original REA didn't tell me about any of this even after they fired the original PM.

    After knowing all these, I went back to the original REA seeking compensation (imho I didn't even ask for a lot, just the repair cost to fix the problems from the original reno) but they've basically brushed me off with a lowball offer saying that they weren't responsible and it was all my fault. As a side note, these people were just incredibly arrogant to deal with, which honestly just kept fueling me on if nothing else. The builder btw looked to have ceased operating their company about a month after the PM got fired.

    I have some ideas about taking this further but would love to hear the forum's thoughts. Also, I've heard that I might not be the only one caught up in this so if they are others I would love to talk to you.

    Thanks for reading. In a way, I am glad I can at least get this off my chest for a while! ;)
     
  2. Paul@PAS

    [email protected] Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    You may get nowhere with trying to establish any proof. So rather than being torn with the need to take action it may be healthier to adopt a positive approach and realise it ended and was a lesson. The REA isnt going to admit to a owner of the issue as it exposes them.

    If you feel that the agency employee was involved and feel you can demonstrate this and wish to explore legal action then discuss with a solicitor. But be mindful it could cost you. It may be difficult to establish that the REA was liable for all the acts of the employee if the acts of the builder are the key issue. Evidence of collusion may be difficult to prove without reasonable doubt.

    Action against the REA PI may be met with a solid defence. Insurers have deep pockets
     
  3. The Y-man

    The Y-man Moderator Staff Member

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    Melbourne
    Can't help in this exact case, but generally we get at least 2 quotes for any major works like this (whether through the agent or not).

    We've had some big variations on the same works so pays to do this.

    The Y-man
     
  4. Jezal

    Jezal New Member

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    Location:
    Sydney
    Thanks Paul, appreciate your input. That is something that I've considered.

    Y-man - yes, agree with your advice. I definitely do that now after going through this experience.
     
  5. Michael Mitchell

    Michael Mitchell Well-Known Member

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    I think it's a mistake for any Lessor to try and use their Agent as a project manager. If anything, the most the Agent should be doing (for major works) is simply scheduling appointments between the contractor and the tenants and providing some liaison back to the Lessor, but if you leave it up to the Agent (who may know nothing or be completely hood winked by a shoddy builder as you say) you're asking for trouble, in my opinion.

    From the information provided, I'd say you have next to no chance of any recourse from the REA. Their may be the possibility of a disciplinary complaint made to the OFT about the particular Agent's conduct, their may also be a complaint and home warranty insurance claim against the builder through the QBCC - assuming they took out the mandatory insurance, I'm basing this on the assumption this work was north of $3,300?
     
    Scott No Mates likes this.
  6. TMNT

    TMNT Well-Known Member

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    unfortunately, quotes dont reveal/indicate the quality of the work
     
    Jezal likes this.
  7. TMNT

    TMNT Well-Known Member

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    unfortunately, good luck getting compensation out of the real estate agent, its a stupidly uphill battle
     
  8. Jezal

    Jezal New Member

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    Location:
    Sydney
    Thanks Michael, yes I am considering both OFT and going through QBCC. Works are north of $3,300.
     
    Michael Mitchell likes this.
  9. Jezal

    Jezal New Member

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    1st Nov, 2019
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    Location:
    Sydney
    Yes... It's being a battle for sure, to say the least.
     
    Michael Mitchell likes this.

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