A HAWK-EYED Perth landlord is warning fellow rental owners to double check their property management fees after noticing he was being whacked for GST twice by a pair of real estate agencies.
Ludwik Erhardt caught both Jones Ballard in Como and First Western Realty in Joondalup double dipping on GST payments and believes what both companies have called an administrative error might be widespread.
Both contracts stipulated a GST inclusive property management fee expressed as a percentage of total rental takings each month.
However, in both cases Mr Erhardt was charged GST twice — first included in the property management fee as agreed, but then a second time as a separate item on his monthly invoice.
Both companies refunded the money as soon as the error was pointed out and the amounts in question were small, but with some real estate agencies managing hundreds or even thousands of properties the potential pay-off is substantial.
Mr Erhardt said after encountering the issue twice in short succession he feared the practice might be widespread.
“It is not an obvious thing to pick up on your invoice,” Mr Erhardt said.
“Everything looks fit and proper and you are only talking about a handful of dollars each month, but if everyone is getting overcharged it would quickly add up.
“You are putting your property in their trust and you expect them to do the right thing for what you have agreed to pay them.”
Jones Ballard principal Nik Jones said error was a “genuine mistake by a staff member” when the property management fee percentage was incorrectly entered into the company’s account system.
“We have conducted a random audit of other properties under our management and have not come across any similar errors and believe that this was a one-off situation,” Mr Jones said.
He said each landlord’s account was independently audited each year and that Jones Ballard had not had a similar issue in its 11-year existence.
“However, in order to prevent the possibility of such a situation occurring again, we have improved our procedures ... and the general manager (now) double checks against the authority to ensure that all fees have been entered correctly,” Mr Jones said.
First Western Realty principal Russell Poliwka said the incident was “the exception rather than the rule” and that his company had increased its audit focus for all clients.
Real Estate Institute of WA president Hayden Groves said he had not heard of the issue previously and did not believe real estate agents were purposefully double dipping.
Mr Erhardt said he found it difficult to believe he was the only landlord who had fallen foul of GST double dipping.
Source: PerthNow, 10/6/18
If you're not happy with your current property manager, we'd love to chat to you about managing your property/ies. Contact us today.