Is this every rental property agent’s worst nightmare? Join the club
“Susan, has David paid his rent yet? It’s the 3rd of the month and I don’t see his rental payment in my account yet.”
“Oh hi, Louise. He actually smsed me on Saturday to say he was making payment on Monday first thing. Yesterday was a public holiday and he banks with a different bank so I expect payment to reflect today. I’ll call you as soon as it clears.”
“Thank you, Susan.”
“Susan speaking, hello.”
“Susan, it’s Louise. It’s Friday! Still have no rent in my account. Some of my debit orders bounced and now I’m being charged because David cannot pay rent! I’m so angry!”
“Louise, let me call him, okay?”
“Fine. Call me back.”
“Hello? This is Louise.”
“Hi Louise, it’s Susan. I couldn’t reach David on his phone and he is not reading my Whatsapp messages.”
“So what am I supposed to do now?”
“Lock him out. He hasn’t paid so why should he stay free? I bet he will pay very quickly when he comes home and realises the locks have been changed.”
“Am I allowed to do that?”
“You want your money, don’t you?”
“Susan speaking hello?”
“Susan, it’s Louise. I did what you said but I was just served with a spoliation application. David’s attorney approached the court and got a court order forcing me to give David immediate access to the rental property. I thought you said I could do this?”
“We are always taken aback when we see a rental property agency which has invested in branding, accounting systems, a company to hold trust funds, a company to advertise their properties, a company to do their inspections and a company to manage their work flow process risk it all by not educating its agents on rental property law,” says Marlon Shevelew, of Marlon Shevelew and Associates Inc, one of the country’s top rental property law firms, noting that by not imparting the correct knowledge it has implications on leases, mandates, tenant defences, legislation and case law. “On the flip side, having this knowledge allows for growth, insight into the industry and staying at the top of one’s game while, at the same time, protecting one’s reputation and buffering one’s self against potential claims by landlords and tenants; not to mention other agents and agencies who compete in the same market.”
Shevelew believes he has the answer – and it’s an affordable one too. The Rental Retainer Club has been running just over three years and has already amassed well over 300 agencies and individual rental property agents who come with their real-world questions and experiences in search of direction and certainty on very important matters.
“A sounding board allows an agent or agency to bounce ideas off, to raise questions with, and to express concerns to, all with the knowledge that it’s covered by legal privilege from an expert rental property attorney – a lateral and logical litigator and a landlord himself who knows legal process and legal forums in an out,” says Shevelew. “It is often times a priceless service.”
This is not hyperbole, either. What ended happening in the case between Susan and Louise and David was irreparable reputation damage compounded by a massive loss of income.
- It was a 12-month lease.
- Monthly rental was R20,000.
- Management commission was 10% (R2,000 per month).
- The breach took place in the 4th month.
The agent had to pay back R8,000 in management commission plus interest
Legal fees to the landlord for the opposing attorney’s fees: R11,000 (plus VAT) (the costs the attorney got against the landlord for the illegal action)
Legal fees to the landlord for his own attorneys’ fees: R5,000 (plus VAT) (the cost the landlord paid his attorney to oppose the spoliation application and to try and negotiate with the opposing attorney)
Damages the landlord suffered being out of pocket costs to deal with this situation: R5,000 (this was part of his claim against the agent)
Legal fees to the agent’s own attorney for defending herself against the landlord: R4,000 (plus VAT)
The agent ended up paying approximately R33,000 (plus VAT) in all
Wait, there’s more
The agent had to pay all these costs, but to add insult to injury, lost R16,000 commission from the reminder of the lease (8 months).
The agent is now a member of the Rental Retainer Club.
“This may be called a club but ask our hundreds of members and they will tell you it’s so much more than that,” says Shevelew.
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