“How much do you have in the trust account for me?”
When hiring a property manager to manage your rental property there are many things you should look for. One key factor is how are they handling your money?
I was reading a decision in BCFSA regarding the Special Compensation Fund, (link is below) where the party involved stated they were unaware of exactly how much money he owed to his clients. What is the Special Compensation Fund you ask?. When funds by a Property management company or Real Estate company are held in trust the interest earned is deposited in a fund Called the Special compensation fund. Interest earned on funds held for security deposits is not part of this fund as that interest may be owed to the tenant. This fund is a source for clients to recoup funds they may have been owed by the agent due to misappropriation of the funds.
All Licensed Property Managers in BC are governed by the same authority which is BCFSA and must follow the same rules and legislation. The real estate service rules has a section on the requirements every brokerage must adhere to when handling client funds. With Rental Property Management the rent and security deposits collected can be held in an account on behalf of the client or a pooled trust account. In either case the brokerage is required to keep records of all transactions in and out of the accounts, and for the pooled trust account keep a separate ledger of the transactions for each client.
The reasoning for the brokerage above identifying they were unaware of the amount of funds they had for their clients was due to them moving funds from the trust account to their general account to pay company expenses. This is a clear violation of the rules regarding management of the funds.
When hiring a property management company always request or demand a monthly statement of the activity at your property. This statement should clearly show the funds coming in and the expenses coming out of your account. It would also show you a balance of the funds held at the brokerage in your name. If you are not receiving a monthly statement, it is possible your property manager is not following the rules regarding managing your money, they might not be licensed most importantly you need a new property manager.
An interesting read click below
https://www.bcfsa.ca/media/3119/download
Need assistance managing your rental property, Cartref Properties can assist you, call today to discuss your needs. You can find more information about us at: www.cartrefproperties.com
