Self manage your rental – good or bad?

Just wanted to share a quick story about a recent situation that I had to fix up for an owner.  Not the standard self managed rental disaster I can tell you.

I was contacted by a new landlord who had recently settled on their new investment.  A week after the property had settled, the property manager (from the office that sold my poor landlord the investment) contacted her to collect management as it would be too hard for her to sort out!

Needless to say, this poor new investor was stuck!  So she gave me what information she had for me to fix the situation.

Long story short, the vendor had self managed his rental property, sold it, and at the last minute, advised for settlement that his tenant was 2.5 months behind in rent and that he was keeping the bond!  Now, beyond that, since getting the illegible lease agreement, it turns out that the self managed rental property had been paid for in cash!  The vendor never provided receipts and did not even lodge the bond with the RTBA!  (All big no no’s that can lead to $6000+ in fines for breach of the Residential Tenancy Act).

So, I love a challenge.  I was given the vendor’s details from the sales agent (slight breach of the privacy act there), and I explained to the vendor politely that he must have been given incorrect advice to breach the residential tenancy act so many times and if he could please transfer the $1000 bond to our office so we could lodge the bond (1.5 years after it was paid).

I also contacted the tenants, who advised that it’s their own fault for not getting receipts for the rent.  So either way, no one seems to be able to prove their paid to date as the vendor did not keep appropriate records!

The resolution, the purchaser (my very happy new landlord), receives rent from settlement from the tenant.  The tenant has agreed that the settlement date can be their paid to date and we sign them up on a valid lease.  We also get them to sign a bond lodgement for to lodge the bond and manage it from there.

As for the Vendor – should the tenants or the purchaser wish to report his actions, he still risks all those fines.  According to the Vendor, he also lost 2.5 months worth of rent (I think a little bit of business karma there because the property was sold subject to the lease and the tenancy which was made out to be secure and not in debt until the very last minute obviously to make the sale more attractive).

All in the day’s work for an experienced property manager!

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