Property management: Is your tenant living in squalor?

Property management: Is your tenant living in squalor?
Property management: Is your tenant living in squalor?

My observation on Sydney is this - what can we really expect from an industry in which standards have been diminishing for some time?

Recently, I was called out to inspect a property that our office was to gain as a new management. It had been previously managed by a prominent agent from the local  area. However, prominence does not always reflect quality, and the standard of service.

The property

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The property was a home built approximately 50 years ago. It was fibro, with a garage, and partly renovated. It was clean and tidy for the most part, but perhaps this has been what was needed for the agent to become complacent.

The issues, outside of the tenant’s living standards, are:

  • No safety switches to the main electrical board;

  • Accumulation of mould around the perimeter in two bedroom ceilings;

  • No balustrades to the landings around the porch area exposing a four foot drop to a concrete slab.

I warn you, if a landlord has these issues, they are a potential liability. For an untrained property manager who isn't aware, or looking, for the issues, they may not see them as a problem and will leave them unaddressed.

However, these were not even the most concerning problems that I found with this property.

    The alarming issues were the following findings:

    • The garage was converted to living quarters without any local government approvals;

    • The garage was not fitted with smoke alarms, although it was obvious someone was using it as a bedroom;

    • The rear garage door opening to the swimming pool area was not secure;

    • The main house smoke alarm had not worked for the last 18 months.

    The blame

    While it's not about who blames who, it's important to think about. Where would the blame lie should anything happen? This is the key legal question in a dispute should someone suffer a loss or injury as a result of the state of the property, so you want to be asking it before anything does happen.

    So, who is at fault?

    We would be quick to blame the landlord, from the property manager's position. However, the landlord may be ignorant of the situation and regulations.

    Is ignorance really an excuse? This question prompts the following argument: both the tenant and the landlord are relying on the professional, the real estate agent. Can you see how convoluted the argument will be once it reaches the courts? And at what price?

    The industry

    In my personal opinion, the industry standards have weakened and have dropped through the basement in some areas of our industry.

    Property management, an area close to my heart and where greater attention needs to be placed as we deal with people, has had the misfortune to being the most affected. Low standards have been allowed to creep into the industry.

    Then there is the added misfortune of low fees being charged by agencies due to pressure from landlords and the competition around. This is adding to the phenomenon of offices reducing costs and employing very young and unqualified people as property managers or property officers. But can you blame the real estate agencies when it only takes a weekend course to obtain a property management certificate and you can reduce wages by employing younger agents?

    This just about says it all, doesn’t it?

    Where did the seasoned property managers go, the managers that were able to identify possible issues and deal with these on a preventative mandate as opposed to a reactive process, and why did they leave?

    Unfortunately, most have left the industry to work on property sales, a straight forward job in most eyes - once sold you can forget about it.

    Sad but true, most property managers have left due to landlord’s unwillingness to rectify issues. These issues cause long term issues for the property managers, and then the tenants take it personally. Then there is the economic strain that most offices cannot afford to pay seasoned property managers due to fees being so competitive.

    The solution

    This is perhaps the sixty four thousand dollar question, what is the solution?

    My first call is for a greater distinction in certificates between 'property management agents' and 'sales agents'.

    The second call is for local and state governments to seriously look at the current conditions of rental dwellings and adopt 'spot property audits' not audits on property files in agents' offices but rather, inspections of the actual properties being rented out.

    Yes, it may be a pipe dream but do we have to wait until someone is seriously injured or dies before something is done? 


    Edwin Almeida is managing partner and licensee-in-charge of Just Think Real Estate

     



      Edwin Almeida

      Edwin Almeida

      Edwin Almeida is managing partner and licensee-in-charge of Just Think Real Estate.

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