New Zealand Property Investors' Federation

The NZPIF is the umbrella body for 20 local Property Investors' Associations throughout New Zealand.

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16-06-2011

Wellington landlords out of pocket after company closure

Landlords.co.nz

Landlords with Wellington property management firm Jericho Residential Property Management have been left out of pocket after the company unexpectedly shut.

Property owners received an email from the company on Friday saying it had ceased trading and that a liquidator was to be appointed to "settle up company finances."

While efforts to contact Jericho have been unsuccessful, Quinovic Kent Terrace principal Matt Watson said he had been approached by ten landlords formerly with Jericho, all saying they are owed money.

"What we've been told by the landlords, the owners I should say, is that they haven't been receiving rent when there has been a tenant in place and the tenant claims they have been paying rent. So for one reason or another the tenant's been paying rent, the owner hasn't been receiving it."

Rent Wellington's Robin McCandless has also been approached by former Jericho clients and said he had been told the same story.

"With the tenants we're working with we've ascertained that they have paid rent to Jericho and its not been forwarded on to the owners."

McCandless said he was unaware of why Jericho has shut down, but that "landlords are out of pocket."

One key thing both Watson and McCandless said property owners should check about a property management company was whether it kept money in a trust account, separate from their business management account.

"If a trust account is correctly administered even if the company goes bust all the money owing to the owner should be safely in the trust account, therefore the owners shouldn't lose anything," McCandless said.

His comments were echoed by Watson, who said the Quinovic franchise was set up in such a way that the independent head office audited the trust accounts of the 26 offices three times a day.

"With an outfit where there's no independent check of the trust account then I think there is a potential there for weakness, there is a missing check," he said.

"If you're an owner of a property you just want to be sure there is some safeguard on the money that is coming to you."

Source: Landlords.co.nz

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