Property manager’s overstep prompts autonomy concerns

According to Yahoo News, the property manager raised the rent by $50 per week without the landlord's approval, prompting the tenants to leave.

Despite raising their concerns with the property manager about the size of the increase and not wanting to lose “good tenants”, they were told the rent increase had already been accepted.

“But lo and behold, before the rise took effect, I received a notification that the tenants were ending the lease.”

The landlord then faced a vacancy situation and unplanned out-of-pocket marketing costs.

According to Barry Plant franchise development manager – property management, Emma Gordon, the situation could have been avoided with the right systems in place.

“A property manager should never change the rental amount without explicit owner approval,” Gordon said.

“There are far too many risks to the agency, including a renter vacating because of the increase, an owner’s pension being reduced due to increased rental income, or a renter becoming upset and confronting the owner, who may in fact be a friend or neighbour.”

She said there were numerous reasons why a landlord may not want to increase the rent on their property, and that ultimately it was their decision.

In some cases, she said the renter may be a friend or family member, or the owner may simply wish to maintain the rent at its current rate as a gesture of appreciation for a long-term tenant.

Gordon said that when landlords sign their property management agreement with an agency, there should be clear expectations for how the property will be managed going forward.

She said that communication between the parties should involve regular contact to discuss the property, with the annual rent review presenting a key touchpoint.

“It gives the agent the opportunity to share market knowledge, demonstrate familiarity with the client’s property, and remind the owner why they are their trusted advisor,” she said.

“I do not know why any agent would want to miss this valuable connection opportunity by implementing a rent increase without consulting the owner first.”

To ensure that the business was protected, Gordon said that all offices should have their expected processes and systems outlined to their staff and regularly discussed and updated.

“If one property manager acts independently and creates their own systems and procedures, it can create a snowball effect where other team members begin to follow that poor behaviour,” Gordon said.

“This exposes the agency to significant risk because you cannot control what you cannot see.”

“When everyone follows a single, clearly defined system and process, it becomes much easier to identify gaps if something goes wrong.

Gordon said that while property managers should have significant input over the processes that dictate their workflow, it needed to be a collaborative effort with business leaders.

“Suggestions can be put forward and debated, but ultimately management must determine the correct system or procedure, ensuring client satisfaction while minimising risk to the agency.”