There are clear signs that some tenants are struggling to pay their monthly rentals. High electricity and fuel costs impact on a wide range of consumer prices and many people are struggling to make ends meet. Retrenchments are also becoming more common as companies struggle in the current economic climate.
Non-payment or late payments are creating headaches for landlords, many of whom are already under pressure to keep up with bond, rates and levy payments on investment units that were bought during the boom years. Their expectations of good returns have been dashed and, in many cases, their units are losing value. In areas where non-payment is endemic, maintenance is being neglected and whole blocks of flats or specific neighbourhoods become notorious, which in turn affects rentals that landlords can realistically expect tenants to pay.
Compounding the problem for some landlords are unscrupulous operators acting as rental agents. Cases are surfacing where landlords take steps against tenants who are late with payments, only to discover that the “agent” has received the money but neglected to transfer it to the landlords’ accounts. Such agents are often not even registered with the Estate Agency Affairs Board (EAAB) and do not have a trust account as required by law.
It is difficult, time consuming and expensive to seek redress and it is vital that landlords take great care when selecting managing agents to avoid this sort of problem. Landlords should choose their agents as carefully as their tenants to minimise financial exposure. A good managing agent will screen tenants very carefully by subscribing to a professional and reputable registered credit bureau like Tenant Profile Network.
Landlords should make sure that prospective agents have a current and valid fidelity fund certificate, that they are indeed registered with the EAAB , and that they have the necessary infrastructure to collect rentals on time.