Property manager guilty of misconduct

Failure to pass on collected rent to clients has led the Real Estate Agents Disciplinary Tribunal to find a Paeroa property manager guilty of disgraceful misconduct.

Monday, June 15th 2015, 12:00AM

by Miriam Bell

Between April 2012 and June 2013, Patricia Kerr – who held the Ray White franchise in Paeroa at the time – was responsible for two properties owned by UK-based clients.

While Kerr was managing the properties, which are both in Thames, she failed to account for at least $10,703.70 of rental money owed to the clients.

In one case, the tenant paid most of her rent, but none of the money was seen by the clients. In the other case, a small amount of the rent money was paid to the clients.

The clients complained to the Real Estate Agents Authority after they got their accounts audited and numerous attempts to get Kerr to explain the situation failed.

In July 2014, Kerr – whose licence had already been cancelled for failing to comply with educational requirements - was charged with misconduct under section 91 of the Real Estate Agents Act.

Despite Kerr’s lack of participation in the proceedings, the Tribunal found the charge of misconduct, for withholding rental monies, was proven.

Kerr’s penalty has yet to be decided.

For landlords, there is a warning to be found in the case.

Independent Property Managers Association president Martin Evans said that, if a property owner feels something has gone wrong with the management of their property, they should always act immediately.

If the situation involves a property manager withholding rent, Evans said the property owner should go directly to a tenant and instruct them to stop paying the property manager and pay them instead.

“Remember – the property manager is only the agent, they are not the landlord.”

Some property owners waited too long to act in such situations, he said.

“But if a property manager does something like this, a property owner should get rid of them quickly.”

Evans also recommended that, to try and avoid such a situation, property owners should choose a property manager who:

• Provides detailed monthly statements on the property.
• Has a no-tolerance for rent arrears policy
• Operates a separate account for rents received.
• Has a reliable accounting system and processes already set up.

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