My Thoughts on Geoff White & REIV - Jude Jury & Executioners

My rebuttal to the Real Estate Institute of Victoria’s CEO Geoff White and recent commentary in: The Real Estate Conversation. Wednesday, September 7, 2016.

As I read White’s current article on Non-payment of rent a key focus in Victoria, I began to wonder if, the Real Estate Institute of Victoria’s CEO Geoff White and the REIV, believe they are nothing less than: Judge Jury & Executioners?

More to the point, this is as they lobby the State Government to implement changes. Changes that come across as nothing less than; blatant, blanket attacks on residential tenants.

Yet again, the Real Estate Institutes (REI’s) fail to take charge of the real and underlying problem, and pass on the blame to others. It appears easier in their eyes to blame the consumers.

In actual fact, the real issue is: the inadequacies of their members and other Real Estate Agents (REA) to perform a task, agencies are paid to do. 

As I read White’s commentary, I find myself ordering a double short black to calm my nerves.

Many of you will know, I don’t let comments or suggestions made by my fellow REA slide; particularly commentary that shifts the blame to the consumers. Although and strangely enough, many of my colleagues do keep silent.

Many REA accept that what comes out of the RE Institute’s offices is gospel and justified. Well, why should they believe otherwise? The REI’s are there to make their jobs easier and ask more from landlords and vendors, aren’t they?

How unfortunate it is nonetheless, for most of the general public. Silence exercised by the majority of the REA, with respect to bad judgments made by our industry leaders, is perceived and taken as an overwhelming acceptance. 

Not me, I won’t be silent on what can be fundamentally viewed as a push by bullies to hide the present inadequacies of the real estate industry, even if they are REI members.

White’s dialogue comes across to me more as a desperate attempt to make property management tasks easier, and at the predicament of others.

In this case the losers are both; tenants and landlords.

However, the REI’s simply can’t see beyond their chest beating. Or their grand-standing approach to seemingly fix an issue, they see as originating from consumers. An issue that in my view rather, it stems from within REI members and the industry. Explained in detail below.

No Sir! Although I’m a member of the REINSW, I cannot stand alongside my peers in this matter. Particularly as a move to introduce two objectionable changes;

·      Reduce the period for falling into rental arrears, from 14 days to seven days

·      Introduce a pet bond to cover any damage caused by pets in rental homes.

Hey! REIV and Mr CEO, please take a chill pill and ask yourselves these simple questions:

 1)   Why do most tenants fall in arrears in the first instance?

a.    Is it perhaps and because Property-Managers (PM) don’t follow up, nor bother to communicate with their tenants from the start?

b.   Maybe because, most property-management teams don’t implement proactive measures to monitor arrears?

c.    To some, it’s easier to write a termination notice than it is to contact, call, email and help tenants monitor their arrears.

God forbid that we should take property-manager’s precious time away from their Facebook and Pokemon hunting adventures.

2)   Why have so many offices lost the skilled property managers that knew how to manage?

a.    A cheaper option came along. Many Licensees, replaced the seasoned PM with teenagers that in the most part, couldn’t even manage a Pokemon Roundup in the CBD of Melbourne or Sydney.

Not trying to be disrespectful, however, but reducing office costs by reducing expert staff to reduce wages was always a disaster waiting to happen. Nevertheless, many property management offices have chosen this path.

I’m thinking, "having the latest sports cars means more to some Licensees, than training and keeping expert property-managers." Just saying…

3)   Do you seriously want to introduce a pet-bond?

a.    Again, if property managers were actually managing properly, there would be less property issues around the so called “pet-issues.”

b.   This will be administrative nightmare and a burden put on offices. No doubt costs involved, I’m sure will be passed on to landlords.

c.    This will only create more cases to be heard in the tribunals than fix the problem you think is caused by tenant’s pets. Again a further cost passed on to landlords.

We manage numerous properties across Sydney that are “pet-friendly.” I can say categorically, we have had few claims for damage caused by pets, over the many years in this industry. The few have been settled and worked out amicably with the pet owners.

Furthermore, our team manages many apartments that are pet-friendly and the formula that has worked well is through habitually performing routine inspections as prescribed by the Regulations.

I say “habitually performing” because, over the years we have inherited many property-management files from other agencies. Some of these files have even come across from brand-name agencies. What we have found to be the most common and obvious issues landlords have had with these agencies are:

·      Next to nil periodic inspections. In some cases, properties have gone up to 2 years, without an inspection. Even the tenants have commented about the PM absence; since the first and only time, the property manager inspected the property.

·      Enormous costs in repairs due to mismanagement of property.

Mr White, don’t punish tenants for the shortcomings of the real estate industry. Don’t act all high and mighty pointing fingers at tenants, all to try and hoodwink property investors and landlords; by turning their eyes away from the real issue.

The true problem is the lack of education and unskilled agents managing property.

Agencies are trying to run property management teams that are untrained and under skilled to have proper dialogue and resolve issues; yes, the meaning of the term “manage” in order to protect the client’s assets, our landlord’s properties.    

Again, I call for you and the REI’s to focus more on the lack of quality service being provided by our members and real estate agents, rather than to pin the blame on the consumers, in this case, the tenants.

I strongly feel that the call to introduce the above directives, will have the reverse effect; property managers will just become lazier, rather than work harder to manage the homes for their landlords. In turn, there will be greater levels of arrears and so called issues with pets, before the tribunal. All, at the expense of their landlords.

In other words, landlords will be the losers under the proposed changes, White is bellowing out.

My Warning to the real estate industry

A warning to property managers and the industry.

Don’t be too hasty to judge tenants that fall in arrears and others that have pets. Make it a point to communicate more with tenants and be more empathetic on all sides, before laying down the law. It will work out cheaper for your landlords in the long-run.

No, I’m not advocating for tenants to run amuck in both rental arrears, and damage caused by pets. The better avenue is communication rather than loss of time and money. Hanging around tribunals, is a loss of time and money for all parties concerned.

Furthermore, we are about to turn a corner. We are heading into a realm where tenants will have greater choices, as vacancy rates skyrocket.

Isn’t it a better option to:

1)   Attract a greater pool of tenants with pets, and get an extra $10- $20 per week? Or do you prefer to scare people off with a pet-bond of $500, $800 or $1000 as an upfront payment?

In my opinion, not even $1000 covers the damage caused by “bad-management,” that leads to most tribunal hearings in the first place.

2)   In the looming and upcoming oversupply of rental property, how long can your landlords keep their properties vacant?

You be the judge, but please, please refrain from your blanket attack on tenants; this is in no way assisting landlords.   

Last but no means least, be mindful that insurance companies are not keen on paying-out claims that lack documentation and proper level of service by agencies. Just like trying to claim on a car accident; when it is noted that the car had four bold tyres and the driver is a “P” plater.  

Edwin Almeida: Twitter - @justthink1