Propertyscouts Dunedin

Would all the cowboys please leave the building - 9th Aug 2011

Would all the cowboys please leave the building Sometimes there’s not a lot you can do about bad press which has the potential to impact on one’s own business. Case in point- Greg Ninness’s recent Sunday Star times article titled ‘rental agency mayhem’. In the article Ninness highlighted that yet another Auckland rental agency had ‘done a runner’ - leaving residential property owners thousands of dollars out of pocket and that property management was a ‘soft target for cowboys’. Trump Assets Management and City Gardens Management, which managed many tenancies in the City Gardens high-rise complex in downtown Auckland (often apartments were sold off the plans and investors offered ‘package’ management deals) had followed Wellington Company Jerico Residential Property Management in closing their doors leaving clients out of pocket, the article reported.
Ninness wouldn’t have had to look far to find a Real Estate agent happy to make comment which predictably pointed the finger at changes to the Real Estate Agents Act. Before those changes Real Estate agents had a virtual monopoly on the property management business, according to the article – which afforded Landlords and tenants protection because Real Estate agencies are required to operate trust accounts which must be audited every 3 months.

What rubbish. It’s like saying if you insure your car you will never have an accident. Propertyscouts was successfully operating as a property manager well before the changes to the Real Estate Agents Act. And, a three monthly audit is hardly likely to stop a property manager employed by a Real Estate company from legging it with your rent, except that clients of a Real Estate firm may be able to claim against a fidelity fund for reimbursement if something does go wrong with their funds.

If you are a Propertyscouts landlord/tenant or thinking about using our company you may be interested in what we do to mitigate your risk. Firstly both Jeanette and Milton as the two business owners have between us considerable business risk analysis backgrounds, Jeanette for the IRD and Milton for the Police and Department of Internal Affairs. Our business structure means that fraud by either owner would be almost impossible with all financial transactions requiring sign off by both of us. No employee has the ability to conduct financial transactions on accounts containing Landlords funds. Also, a large scale fraud would be akin to business suicide and financially wouldn’t make sense.

But a close analysis of the article reveals that the fraudulent ‘property managers’ didn’t operate at all like we do at Propertyscouts and that there were plenty of warning signs for landlords in advance of the thefts. Erratic reimbursements to landlords to the extent of having to ring to chase up payments, unable to make contact with property managers, account numbers changing and bonds not being lodged. Any one of these ‘warning signs’ should be a clear indicator that you are probably dealing with a cowboy – and you should …ask them to leave the building.

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