Additional property management costs

Question from Anthony updated on 8th November 2019:

I have just had my home fully insulated to comply with the new regulations. I currently pay 12% management fees to a property manager to manage the property which I assume covers managing maintenance and works. I have just received a statement with the invoice for insulation and also on the statement was fees of $800.00 as well. When I questioned them they said that was their commission for organising the work. Is this legal - given they already charge me a management fee?



Our expert Bernard Parker responded:

The agreement that you have with your property manager will specify whether the manager can charge you a commission on arranged maintenance. Generally, the standard management fee covers tenancy matters, rent collection and day-to-day management of the property. This does not usually include maintenance, which is additional to the regular duties.

It is easy to understand if you think of the difference between “property management” (normal, day-to-day management) and “project management” (additional projects). I suggest you look at your agreement with the property manager. If it specifies a commission rate for arranging and paying for maintenance, then the manager is entitled to do so.

Bernard is principal of Quinovic – Kapiti-Mana. Quinovic's outstanding people and systems provide the most professional, effective and reliable residential property management service in the NZ market for over 30 years.

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