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Taking managing agent to tribunal to seek refund of management fees

Discussion in 'Property Management' started by LATS, 21st Jun, 2016.

  1. LATS

    LATS Active Member

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    Hi all,

    Seeking advice from investors and management agents please on my situation.
    I do have to acknowledge I haven't been managing the agents which lead to the following issues, so my bad. Tenants have now been evicted, so I'm now on the case of the agency.
    What I am asking of them is to refund 2/3 of management fees paid during the last 3yrs, based on they only performed 1/3 of what they are meant to do during that time.

    They have said no, so I'm wanting to submit the request to fair trading/tribunal. Do I have a case, and how should I approach it?

    Here are some reasons.
    Management agency had a very high turnover of staff, resulting in the last 3yrs with about 5-6 different people managing my property. So the lack of continuity has caused most of these issues and they acknowledge that and apologised.

    - No inspection information or reports
    I have not receive any communication or report about inspections. I have asked a few times via phone and email, but never got anything. I made a complaint to their management who gave me dates of various inspections done.
    Eventually I did get hold of the details (but not the reports) in Jan 16 - realised in all these reports the condition of the house has been getting worse and worse. These details were never sent to me, and they couldn't see data to prove they were sent either.

    - Poor maintenance
    Obviously because I didn't know about the conditions, I didn't have any opportunity to say fix this, do that etc. Nor the option to decide that the tenant agreement may need to be terminated to get rid of them for not up keeping the property.
    The poor conditions were apparently acceptable by the agents - they can throw whatever they want around the house, and be dirty if they like - says the agent when I challenged them yesterday.

    Throughout the 3yrs I emailed and called various times, asking if everything is ok, anything needing fixing, are tenants afraid to ask please encourage them to do so etc. Got reply each time "no it's all fine, tenant didn't ask for anything".


    - Poor communication
    I had to be the one who call and email them to ask update. I had to be the one who recognise that the rent is under the market and ask for rent increase (I know I'm supposed to!).
    I have to ask for annual financial statements rather than it being send to me automatically.
    I ask for quotes but don't receive them

    - Incorrect charges
    A 'transaction fee' showing up on and off my monthly statements. As this is a portfolio moved from one agency to this one I thought maybe it was in the previous agency's fees? But that was not the case. It's also not in my agreement either.
    I've told them on the phone, and in various emails, each time get the 'but all owners pay it' and 'it's also in the last agency's fees too'. Each time created doubt for me, causing me to double check again - which means time, and time management isn't my friend, hence this long delay.

    - Putting the property in danger
    At time of agency change over the letter from both party says no change in service, no change in this and that etc. So of course absent minded me just sit and collect rent and let things roll.
    I've realised just now that the annual fire alarm inspection service and fee never showed up with this agency.

    - Collecting incorrect rent
    The last rent increase notice was sent in Dec to come into effect in Feb 16. In the recent tribunal eviction order in March (scanned and emailed to me) I noticed the agent is claiming the old amount and chasing the old amount. Which means the authority isn't enforcing the right amount for me.

    Those in RE roles, your advice please? Investors - any previous experience in getting money back from agents you could share with me?
     
    Last edited: 21st Jun, 2016
    Perthguy likes this.
  2. Nick Valsamis

    Nick Valsamis Real Estate Professional

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    I would probably lodge a complaint with Fair Trading first. But I'm not sure what can be done considering that it has been a long time of service.
     
  3. SeafordSunshine

    SeafordSunshine Well-Known Member

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    Dear Lats,
    Let me guess,
    (i)damp and mould throughout.
    get a quote for repair and make good and send to agent for payment
    (ii)damage which has been made worse by not maintaining small things
    Get a quote for this repair and make good and send to agent for payment
    (iii) Inspection reports not submitted to you, damage to property which could have been avoided
    Get a quote for repair and make good and send to agent for payment.

    Don't ask me why they call this 'passive income'
    this reminds me of the old joke
    Q. "how do you eat an elephant?
    A. One bite at a time

    keep smiling its a huge job, picking up the pieces
    I hope this helps
     
  4. Xenia

    Xenia Adelaide Property Manager Business Member

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    Here's a question the court would ask.
    why did you let it go for 3 years?
    How long was the management contract?

    Negotiating to get out pre- term without paying a penalty would have been a better tactic.
     
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  5. LATS

    LATS Active Member

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    Thanks SeafordSunshine.
    I am very much a glass half full person - bad tenant out, opportunity to fix things up, good outcome ;).

    Icould walk away and soldier on. Obviously I don't want to let the agent go lightly. Thought I wouldn't be able to make strong case linking the damages/repair cost to them (the tenants did that, and even if you knew it earlier you would still have had to pay it anyway type of response), so thought logical to claim poor service and breach of contract to me.

    Anyway, repair make good and send to agent - have you had success in the past?
     
  6. LATS

    LATS Active Member

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    They've had it for 3 years. I started questioning in Jan 15 that's when poor communication and lack of info become to surface so I started looking into my files and started chasing for response. Poor response, no answer etc. Eventually complaint in Aug 15, which is when their management gave me a response casting doubt about my own finding. So back to check and validate my details and back on track Oct/Nov 15. I needed them to take the tenants to tribunal since Feb which dragged on till end of May.

    In summary, I did take action from the moment I know and ongoing; I raised it with multiple people in good faith that previous inaction were due to poor staff turn over; I don't do this full time so each time they explain and cast doubt I need to refocus and spend time to verify my facts again which cause time lag/gap. The court wouldn't care to hear this but I work super long hours with most days no time for even breaks and lunch plus take work home so when am I suppose to find time? (I'm online now because I'm doing work!).
    Poor excuses I know - but genuine. I did say at the start I was time poor - that's why I pay the PM to act on my behalf and act in my best interest isn't' it?
     
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  7. LATS

    LATS Active Member

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    But I'll prepare for this question to come. Thanks Xenia!
     
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  8. thatbum

    thatbum Well-Known Member

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    Lats I see this sort of thing a fair bit and often give legal advice on such claims. Unfortunately from what I've read so far, I don't like your chances at all.

    Like many people who come wanting advice on this situation, broadly I've characterise it as a bunch of generalised gripes about the poor performance of the PM, with weak causal links to actual financial loss suffered.

    If you're serious about continuing with this, you need proper legal advice.
     
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  9. LATS

    LATS Active Member

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    thanks thatbum. I understand what you are saying and I suppose it could come across that way. Although I thought I wasn't making the link/connection because obviously hard to prove. I am however claiming they failed in performing the tasks outlined in their contract which is what their fee is for. Isn't that fair enough?
    If a painter came and did a poor job, you would ask for some money back wouldn't you?
     
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  10. thatbum

    thatbum Well-Known Member

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    No its not necessarily enough, because your remedy under the management agreement is to terminate the agreement - sometimes on short notice too. In this case, you didn't for 3 years, which I think will be a tough thing to explain.

    Your painter analogy is different in a few ways. Notably that the painter would probably still be entitled to be paid, but needed to be given a chance to fix up some of the work - or failing that you could possibly claim the cost of getting someone else in to fix the work - which can be easily quantified - its not just "some money back".
     
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  11. Pumpkin

    Pumpkin Well-Known Member

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    Lats you probably don't like me saying this: you need to invest time in your Investment Property. A bit like having adult children. You need to show interest on a consistent basis, never go totally hands-free. It is unfortunate to what happened to you. Its not that hard. Establish some critical events that you think are importsnt and folliw-up when the time comes.
     
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  12. LATS

    LATS Active Member

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    It's not whether I like it or not, I do expected to hear that from members of this forum actually.:)
    I honestly don't know how you all find the time especially those who have double digits of properties.:(
     
  13. Pumpkin

    Pumpkin Well-Known Member

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    I only have one child and find it's very difficult to discipline my child. My friends of 3 children and above told me that it's easier to discipline 3 than 1. I suppose the same principle should apply.
    Time to engage a manager to manage the Managing Agnets LOL
     
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  14. Ted Varrick

    Ted Varrick Well-Known Member

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    Hi LATS,

    Before you start accruing lawyers fees, be aware that you need all your documentation and copies of emails etc.

    AND (as a prominent strata lawyer told me some time ago...):-

    LAWYERS LOVE TIMELINES!

    so make sure you have a timeline, like a spreadsheet with the (suggested) columns like <Date>/<Doc ID#> (referencing copies of emails/letters/docs etc.)/<Event>/<Response>(a lot of the time = Nil)

    Good luck.
     
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  15. LATS

    LATS Active Member

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    Thanks Ted Varrick!
    I'm a hoarder when it comes to docs, emails and phone call notations after calls. Will spend tomorrow organizing my submission.

    I don't plan to involve lawyers. Don't think the NCAT allow lawyer? Will check. Thanks for the +ve energy :)
     
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  16. thatbum

    thatbum Well-Known Member

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    NCAT not generally allowing lawyers to represent you is a different issue from whether or not you should get legal advice on the claim - and you should definitely get legal advice.
     
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  17. legallyblonde

    legallyblonde Well-Known Member

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    I agree with @Xenia Your main issue is probably that it has been three years... So you have accepted the poor performance for that entire period... AKA you didn't mitigate your own losses.
     
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