Property managers: 15 points to check

The case of a property manager currently before the courts on charges of financial misconduct highlights the need for landlords to conduct rigorous checks of potential property managers.

Thursday, September 17th 2015, 12:00AM

by Miriam Bell

Alan Morton-Jones, who was the licensee of Rodney Real Estate, has been charged with misconduct under section 73 of the Real Estate Agents Act 2008.

The charges relate to the repeated short payment of property management rental money to at least three of his clients.

The rental shortfall in question amounted to over $40,000 over the course of three years.

When questioned about the issue by the three complainants, Morton-Jones failed to provide any reasonable explanation for the short payments.

He also failed to arrange repayment of the money owed to two of the complainants.

One complainant said that funds which should have been held for and paid to clients were effectively used by Morton-Jones as “his own personal piggy bank”.

Morton-Jones disputed the allegations and blamed accounting errors for the short payment.

He said the errors had been corrected and the clients affected had been fully reimbursed.

While the Real Estate Agents Disciplinary Tribunal upheld the misconduct charges against Morton-Jones, that decision is currently under appeal to the High Court.

However, the Tribunal said his fitness to properly and honestly manage his property management business showed his fitness to perform real estate agency work under the Act is questionable.

For this reason, the Tribunal issued Morton-Jones with an interim suspension of his licence.

The case highlights the risks that disreputable property managers can pose to landlords.

Independent Property Managers Association president Martin Evans said that landlords who find themselves in such situations should instruct the relevant tenants not to pay the property manager any longer.

“The rent is the landlord’s money – not the property manager’s. So, in such situations, a landlord should tell their tenants to pay them directly, as opposed to the property manager.

“The landlords should then inform the property manager, in writing, that they want to terminate their contract.”

Landlords need to think of their property as a business and of their property manager as another business, Evans said.

“Just as in any business relationship, it is crucial to establish as best you can how reputable other businesses you are considering doing business with are.”

Evans said there are certain things that landlords should always look into when deciding on a property manager.

According to his 15 point checklist, a good property manager should:

1. Belong to a supporting organisation in the industry.
2. Have a proven track record in property management.
3. Have contactable referees.
4. Invest in property themselves.
5. Supply all the information required about their company and their services up front.
6. Provide, at least, monthly detailed statements to owners.
7. Hold public liability insurance.
8. Have a no-tolerance for rent arrears policy.
9. Adhere to the Residential Tenancies Act.
10. Operate a separate account for rents received.
11. Have no criminal history themselves or their staff.
12. Keep up with law and market changes.
13. Have a reliable accounting system and have processes already set up.
14. Do regular property inspections and organise maintenance as required.
15. Act in a professional manner at all times.