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Property manager’s overstep sparks investor concerns
Landlords have been urged to choose their property managers wisely and keep their communication channels open following a PM overstepping their authority, resulting in tenants leaving.
A Queensland landlord lost a tenant because their property manager increased the rent without consent, leaving the home owner hundreds of dollars out of pocket in advertising fees and lost rent.
According to Yahoo News, the property manager raised the rent by $50 per week without the landlord's approval, prompting the tenants to leave.
Despite raising their concerns with the property manager about the size of the increase and not wanting to lose “good tenants”, they were told the rent increase had already been accepted.
“But lo and behold, before the rise took effect, I received a notification that the tenants were ending the lease.”
The landlord then faced a vacancy situation and unplanned out-of-pocket marketing costs.
According to Barry Plant franchise development manager – property management, Emma Gordon, the situation could have been avoided with the right systems in place.
“A property manager should never change the rental amount without explicit owner approval,” Gordon said.
To protect their assets, Gordon said it was essential for investors to find the right property manager to support their portfolio plans, sharing common goals.
“Sharing this information with a potential property manager gives you insight into their thought process, their values, and how they can support you as an investor.”
Gordon said that when landlords sign their property management agreement with an agency, there should be clear expectations for how the dwelling will be managed going forward.
She said that communication between the parties should involve regular contact to discuss the property, with the annual rent review presenting a key touchpoint.
“It gives the agent the opportunity to share market knowledge, demonstrate familiarity with the client’s property, and remind the owner why they are their trusted advisor,” she said.
“I do not know why any agent would want to miss this valuable connection opportunity by implementing a rent increase without consulting the owner first.”
She said there were numerous reasons why a landlord may not want to increase the rent on their property, and that ultimately it was their decision.
In some cases, she said the renter may be a friend or family member, or the owner may simply wish to maintain the rent at its current rate as a gesture of appreciation for a long-term tenant.
Additionally, Gordon said it was better for investors and landlords to over-communicate than under-communicate.
She said there were certain situations in which a landlord might advise that they didn’t want to be contacted, such as for maintenance approval, selecting rental applicants, or rent review.
“Most owners want to be well-informed about their property. They want to know what is happening in the market and should always be consulted regarding rent reviews and lease renewals.”
“However, these situations are usually the exception rather than the rule,” Gordon concluded.
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