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Real Estate Industry

July 6th 2005


Some agents damage instead of manage.

By a Guest Writer.

Who says real estate isn't setting growth records these days? Real estate property managers are achieving new benchmarks for the number of complaints.

Take Queensland, for example. Written complaints to the Office of Fair Trading (OFT) about property managers have been growing as fast as real estate prices once grew.

In 2003 written complaints about agencies over property management issues rose 14%. This year complaints are up a staggering 23%.

Most common grievances relate to excessive maintenance costs, failure to undertake the required inspections, failure to undertake necessary repairs and generally poor service. The OFT cites as a typical complaint: "The agent failed to inspect the property, ignored requests for repairs and did not collect rent for several weeks."

There have even been instances of agents operating as property managers, and charging fees, without being appointed by the owner.

One agent showed such "a reckless disregard" and "blatant contempt for the law" she has been banned for life and ordered to pay $16,500 in fines and costs. Amanda Byrne pleaded guilty to 17 charges over her management of two apartment buildings in Cairns - including underpaying owners, misusing clients' money and operating without a licence.

Another Queensland agent was fined $2,800 over his behaviour. Timothy McNamara, principal of Holiday Caloundra Pty Ltd, kept deposit money that had been forfeited as a result of cancellations. "McNamara paid the full amounts of refunds to an account he owned, but recorded on the cheque butts that the money had been refunded to his clients," Queensland Fair Trading Minister Margaret Keech said.

While Queensland is often a prime example of all that's bad in real estate, misbehaviour by agents is not confined to the Sunshine State.

Earlier this year police in Victoria voiced their concerns that unscrupulous agents were turning a blind eye to tenants involved in the amphetamines trade (in Melbourne most illegal drug labs are found in rental houses). It was reported that agents were offered bribes to overlook backyard drug laboratories.

Police responded by running education seminars for agents who manage rental properties to show them how to detect drug-dealing tenants and remind them of their responsibilities if they become aware of such activities.

Agents' performance as property managers has been raised increasingly on radio in NSW. Caller Chris told a Sydney radio his managing agent had, without seeking his approval, organised cleaning and repairs to an apartment he owned as an investment and sent him the bill. Another caller Frank complained that his managing agent refused to change the batteries in smoke detectors in his investment property, saying that Frank had to do it himself.

Investors need to do some homework before deciding on a property manager. They should compare the services offered by various agents, ask about the agency's complaint handling procedure, agree on a system for repairs and maintenance - and negotiate on fees.

Agents should be paid to manage investors' properties not to damage them.

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