Residential Property Owners Need Protecting Too
How protected are you as an owner of a rental property?
The government has signalled we are about to see changes in residential tenancy legislation. This includes banning letting fees paid by tenants. There is still very little legislative protection for owners of rental properties.
This lack of protection was evident recently. The NZ Herald reported the company owned and run by Auckland property manager David Sharma, operating under Ray White Henderson, owed 67 landlords more than $350,000 in unpaid rents. The number of landlords owed money by Sharma has since increased and is now confirmed as being 72 and growing.
The liquidators reported that most rental payments owed to rental property owners dated to January and February of this year. There were no company assets available for immediate recovery. The company’s bank accounts were overdrawn. The chances of any of these property owners seeing their overdue rental monies anytime soon is pretty non-existent.
So how was this allowed to happen? Aren’t there legislation and rules to prevent these sorts of things from occurring?
Unfortunately, the answer is ‘no’. Up until 2008, property management was an activity for which a real estate licence was required and overseen by the Real Estate Institute. Yet when the Real Estate Agents Act came into effect, a real estate licence was no longer required. This very low barrier for entry meant a lot of new people entered the industry, cutting corners and service delivery.
Why aren’t the rental monies at least deposited into a trust account? Again, because it’s not mandatory for property managers to operate one.
It is a question every rental property owner should ask their property managers. It’s not only the smaller players who don’t run trust acounts for rental monies. Sharma is a good example of this. Although his business traded as Property Management Out West Ltd, it was under the branding of Ray White Henderson.
At Quinovic Property Management, we view a trust account as imperative. It protects our owners’ money and the integrity of our property management services. All our rental monies come into a centralised trust account. Then they get disbursed directly and automatically to our rental property owners. This system means no rental monies are received or controlled by our individual branches.
At Quinovic Property Management Parnell, we ensure investment properties are professionally managed to the highest standard. We can also give you peace of mind, knowing your rental income is protected. We assist Auckland rental property owners put plans and strategies in place.
Have your Auckland rental property managed by Parnell’s property management experts. Discover how much your rental property could be earning with a rental appraisal. Follow the link below to complete our online form: