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VCAT awarded me bond and the PM took their cut!

Discussion in 'Property Management' started by James Bond, 11th May, 2016.

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  1. James Bond

    James Bond Well-Known Member

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    Hi, I recently had a tenant default on rent.

    VCAT has awarded me their bond, and paid it to my PM, who has passed it on to me, but taken their standard property management % off it.

    Is this normal practice?

    Thanks

    JB
     
  2. Xenia

    Xenia Adelaide Property Manager Business Member

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    If it was awarded for rent arrears then yes.
     
  3. D.T.

    D.T. Adelaide Property Manager Business Member

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    Yup, its rent they would have received otherwise.
     
  4. EN710

    EN710 Well-Known Member

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    Yep
     
  5. teetotal

    teetotal Well-Known Member

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    Is it because of your name - James Bond o_O:D
     
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  6. James Bond

    James Bond Well-Known Member

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    Bugger. Thanks guys.

    JB
     
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  7. D.T.

    D.T. Adelaide Property Manager Business Member

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    Same goes for insurance claims if its for rent.
     
  8. James Bond

    James Bond Well-Known Member

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    Nah the insurance claim goes straight to my bank account thank goodness. If the PM wants a cut of that then they can pay some of the premium!!!

    JB
     
  9. D.T.

    D.T. Adelaide Property Manager Business Member

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    That's unusual.
     
  10. brettc

    brettc Well-Known Member Business Plus Member

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    It would generally be accepted that the rent received from an insurance claim is reimbursing rent that should have been paid by the tenant, and the agent would expect to be entitled to their normal management fee. By not allowing the property manager their management fee you are technically "profiting" from an insurance claim, you are receiving more than you would have had the tenant simply paid their rent. As a landlord myself it's certainly not a practice that I could find any way to justify, property managers go through a world of pain and effort (in most cases) when a tenant goes bad, so I can't understand why they wouldn't deserve their management fee.
     
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  11. Biz

    Biz Well-Known Member

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    Hows about they had a hand in selecting the tenants so they should shoulder some of the blame and not profit from.
     
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  12. James Bond

    James Bond Well-Known Member

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    The PM is lucky that they don't have to meet any of the costs of cleaning, rubbish removal and others associated with a tenant not leaving gracefully. The insurance company doesn't meet these either so guess who does.

    This PM has so far provided me with 5 tenants across 2 properties. Only one of these has been a perfect payer and 2 of them have resulted in insurance claims.

    If they asked me for a cut of the insurance pay out I would tell them to stick it "where the sun dont shine."

    JB
     
  13. sanj

    sanj Well-Known Member

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    no, the PM is not lucky they do not have to meet those costs because it is not their role to do so, has never been their role to do so and it does not state in your agreement with them that they will be liable for those costs.

    there is no luck or chance involved, there are clear lines and distinctions of who does what.

    if the insurance claim was partly for unpaid rent they are perfectly entitled to their % of that rent figure.

    not sure i understand the outrage here.

    btw you are free to tell them to get stuffed if they ask for their PM fee for the unpaid rent portion of the insurance claim, just like they are free to exercise their rights to get that money. if youre planning on continuing to use them in the future it's a fools errand to take this stance. if youre not it is a tiny bit less so but still comfortably in the "often landlords are as bad as bad PMs and tenants" camp. i suppose congratulations are in order?
     
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  14. jim1964

    jim1964 Well-Known Member Premium Member

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    I tend to agree with this.Read on.................

    Hi Jim


    Just letting you know the tenant that was in xx xxxxx xx, Mt Barker is contesting the bond claim we have made. Unfortunately there is a fee payable to SACAT (tribunal) of $69.00 because of this.


    I will present them will documents to support the claim we are making it will then be listed for a conciliation conference if we do not agree at the conference it will then go to a hearing.


    Are you happy for me to proceed with this application?


    We are claiming $394.31 in total

    Being made up of $237.85 Rent

    $114.87 Break Lease fee

    $39.95 Water


    So firstly i have to cough up $69 to fight for whats rightfully mine,and have to wait 7 weeks to get to a conciliation conference.The tenant pleades hardship and as usual the member sides with the tenant, and awards the cost to be reduced by 50%.The property manager agrees, with no what do i think!!!!
    So then the agency charges me $320 to find new tenant plus a $110 ingoing inspection.So in effect, once again the landlord is left out of pocket,there should be some accountability from the agency looking after your best interests, sadly too often this is not the case.
     
  15. Ed Barton

    Ed Barton Well-Known Member

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    Pay your dues 007. If the agent provided management pay them you tight ass.
     
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  16. James Bond

    James Bond Well-Known Member

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    What management? The tenant they provided left with thousands of dollars of rent unpaid. The property has been vacant for a few weeks as a result and the insurance has covered the rent for these few weeks. What has the PM been doing these few weeks to justify receiving a cut of the insurance payout?

    They haven't asked for it in any event.

    JB
     
  17. jim1964

    jim1964 Well-Known Member Premium Member

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    Sourcing a new tenant probably to hit you up for another 2.2. weeks rent.
     
  18. brettc

    brettc Well-Known Member Business Plus Member

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    Just because something goes wrong with a tenant doesn't necessarily mean bad management, there is a massive number of things that can and do occur that are despite the best efforts of a property manager. They don't have a crystal ball, circumstances change etc. The list is never-ending. Your recourse against poor property management is to take your property away from them which is a big loss to a company, not to withhold fees that are rightfully theirs. Take a tenant who stops paying their rent, the property manager is still issuing the notices and following the tenant up trying to get them to pay throughout this period. They are still "managing" the property. When insurance pays for the rent lost during this period, they are entitled to their share, I'm not sure why they would be expected to work for nothing.