Property manager calls for more regulation
A property manager is calling for increased regulation of residential property management.
Property manager David Pearse is calling for increased regulation of residential property management.
He has been involved in property management for more than 25 years, setting up Pukeko Rental Managers in 2010.
He says it’s time greater focus is given to improving standards and auditing business practices.
Legislative changes in 2010 allowing anyone in the business to charge a letting fee have meant cowboy operators have sprung up as a result, he says.
Mr Pearse wants to see compulsory training or minimum qualification requirements.
He says many property management companies sacrifice service by asking staff to handle large numbers of properties that are impossible to maintain.
“No property manager can effectively manage more than 100 properties at a time. Yet most real estate property managers have key performance indicators where they are required to manage between 150 to 300 properties which is mission impossible.”
It is common for unscrupulous property managers to use money held in trust for personal use while it is waiting to be paid out to the owners, he says. He is also anecdotally aware of many real estate companies “angling” rental properties they manage into a sale.
About 10% of managed properties come up for sale every year and a sale can provide 10 times the annual management fee.
Mr Pearse says the Real Estate Institute should not be involved in regulating the industry.
Rather, an ombudsman who knows the industry and has the power to step in and effectively address complaints would be a better option.
Currently, if a property owner is unhappy with the performance of their property manager they have few avenues for recourse except the courts, he says.
Property owners need to check who is responsible for managing the property, their qualifications and experience, the number of properties they manage, their vacancy rate for properties between tenancies, management fees, percentage of arrears in their portfolio, and whether they offer a methamphetamine testing service.
Chris Hutching for NBR NZ Property Investor
Wed, 12 Nov 2014
Wed, 12 Nov 2014
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Property manager calls for more regulation
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