澳洲Australia property Property Manager wants 6 mth fees up fron


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My property has just been leased for 6 months and the tenants have paid all the rent up front. The property manager wants to be paid all of their 6 months worth of management fees up front also. However, I want to pay the property manager each month. The property and agent are in Perth. Do I legally have to allow them to deduct their full 6 months worth of management fees up front?  

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Is the PM going to pay your rent all up front too? If not, tell him they are dreaming....I think you will find the contract says PM gets paid monthly - and is unrelated to when the tenant pays the rent.  

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If your tenants have paid upfront for 6 months, do you not think that the PM has earned the right to claim their commission for that period as well? Its no different if they had collected 1 months rent and they had the right to charge 1 months commission.  

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Hi All, Thanks for your comments. They are saying that they will forward me all of the 6 months rent, less fees so far (entirely reasonable), and they want to also retain their 6 months management fees and $500 to hold in trust for any minor repairs, etc.

As far as I am concerned, their commission (letting fee) is of course due to them now, and the first months management fees. As for the remainder of the management fees, I want them to actually "manage" the property before I pay them this. I have proposed I pay the management fee on a monthly basis by direct debit. The agent has dragged their heels a bit and not impressed me at all so far. This is a new IP and new agent. Curious to know what my legal obligations are here....:confused:  

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buzzlightyear said: ↑
If your tenants have paid upfront for 6 months, do you not think that the PM has earned the right to claim their commission for that period as well?Click to expand...
No they haven't earned their commission, as their job is a Property Manager and requires on going services, not just collecting their commission.  

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battler said: ↑
No they haven't earned their commission, as their job is a Property Manager and requires on going services, not just collecting their commission.Click to expand...
I agree with this. They haven't done 6 months worth of work.  

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They are entilted to the percentage of rent recieved as agreed in your contcact regardless of the period the rent was recieved.  

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Hi Xenia, does this mean they are entitled to it "up front" .... even though they have not done the work yet? Thanks.  

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Hi Red Ten

Yes, they are entilted to their portion of the rent, the contract you have with them binds them to an agreement to manage the property regardless of when and how much the tenant has paid.

they still need to manage the property. If they do not and there is a breach of contract you have the rights to cancel the agreement and the money paid to them needs to be refunded. It is in their best interest to do the right thing by you and by the tenant. Sounds like an awesome tenant!  

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Isn't the percentage of rent charged (the method used to calculate the fee) for all aspects of managing the property not just the collection of rent?

If collecting the rent is only part of PMing then I wonder how they can justify collecting the fees prior to work being completed.  

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Xenia said: ↑
Hi Red Ten

Yes, they are entilted to their portion of the rent, the contract you have with them binds them to an agreement to manage the property regardless of when and how much the tenant has paid.

they still need to manage the property. If they do not and there is a breach of contract you have the rights to cancel the agreement and the money paid to them needs to be refunded. It is in their best interest to do the right thing by you and by the tenant. Sounds like an awesome tenant!Click to expand...
A brothel was just shut down this week down the road from my office. 12 months rent paid in advance for a residential house. Great te:eek:nants I suppose but the neighbours and coppers were less than impressed.  

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I am with Weg. Property management is more than collecting the rent, it is about ensuring repairs are done and the property is well maintained.

The contract says PM's are paid for Property Management, and that fee is simply based on the rental amount. It seems irrelevant when rental money is received; the PM simply hasn't completed the property management part of the contract until each month is finished, so how can they claim the fee?

Let's just add this to the mix. Your contract with a PM is usually 3 months before you can cancel? Suppose you were not happy with your PM and you wanted to cancel the arrangement in 3 months time, but they have already taken out their 6 months of fees. It would be extremely difficult to get this money back, especially if the arrangement was terminated as a result of poor performance.  

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Simple. Why don't you find a new PM.

Unless, of course, you are in an agreement with them.

Ask them to show you the relevant regulation in writing where they can take 6 months fees in advance.  

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If the tenant didnt pay the full months rent i bet they would be charging you the same monthly fee? it wouldnt be less because the tenant paid less thats for sure ! i had a month where i had repairs and there wasnt enough to pay the fees i had to hand it over.
If they inist on it maybe you can say to them you will but only with a heavy discount for paying the fees in advance say 10%? bet they will take the monthly payments then :)  

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froggy said: ↑
If the tenant didnt pay the full months rent i bet they would be charging you the same monthly fee? it wouldnt be less because the tenant paid less thats for sure !Click to expand...
repairs are completely different from the pm fees.

i think you will find that the pm fees are a percentage of the rent received - so that if the tenant doesn't pay the rent for a month, the pm doesn't fees don't get paid that month.

i think it entirely fair for the pm to deduct their 6mths fees from the rent (as a percentage of rent received), as there will be no further rent coming in for 6 months for them to deduct their fees from.

works both ways.  

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Pushka said: ↑
The contract says PM's are paid for Property Management, and that fee is simply based on the rental amount. It seems irrelevant when rental money is received; the PM simply hasn't completed the property management part of the contract until each month is finished, so how can they claim the fee?Click to expand...
I haven't got any of my lease contracts immediately handy, but are you sure about the wording? My first thought was that the PM's fees are taken out as a percentage of rent received. That works both ways; when a tenant doesn't pay, the PM doesn't get paid either.

Most of this is just speculation, though. I'd expect Xenia will know the fine print on the contract - which is the *only* thing that matters here. Red Ten, do you know exactly what you have signed for?  

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lizzie said: ↑
repairs are completely different from the pm fees.

i think you will find that the pm fees are a percentage of the rent received - so that if the tenant doesn't pay the rent for a month, the pm doesn't fees don't get paid that month.

i think it entirely fair for the pm to deduct their 6mths fees from the rent (as a percentage of rent received), as there will be no further rent coming in for 6 months for them to deduct their fees from.

works both ways.Click to expand...
totally agree. i would be pleased to get rent in advance and understand agent gets the percentage as per contract. naturally they would still be doing regular inspections etc as per their agreement.
regards.  

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I too, feel that the agent taking their fees is no big deal. It is a percentage of the rent & if you are receiving the rent, they should be receiving their fees. I would, however, object to them keeping a portion to pay for repairs. You can always be invoiced for them, should they be needed.

On the other hand, the Agent is probably within their rights (the agents on the forum can confirm/deny this) to keep the entire amount in their Trust Account and only pay you each month.

I know which of the two options I'd prefer.  

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I think as a matter of equity you should both be treated the same. If you want your rent released from their Trust account now - for accommodation that you haven't yet provided - then you should also release their PM fees now - for property management that they haven't yet provided.

Or, you can both leave the money sitting in the Trust account, and both wait until you've earned the income.

But I think it's extremely hypocritical if you want all the rent to be paid to you in advance, but not pay the PM in advance.  

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ozperp said: ↑
I think as a matter of equity you should both be treated the same. If you want your rent released from their Trust account now - for accommodation that you haven't yet provided - then you should also release their PM fees now - for property management that they haven't yet provided.

Or, you can both leave the money sitting in the Trust account, and both wait until you've earned the income.

But I think it's extremely hypocritical if you want all the rent to be paid to you in advance, but not pay the PM in advance.Click to expand...
couldn't have said it better myself!  

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