Written by: Natashia Blank
For many landlords, a property management company takes the stress out of owning an investment property. They handle the day-to-day tasks like collecting rent, organising repairs, and ensuring tenants follow the lease. But what happens if your property manager doesn’t live up to their responsibilities?
In some situations, their actions (or inaction) can cause financial loss or legal trouble. If this happens, you may have grounds to sue your property management company. Below, we look at the most common reasons landlords take legal action in Queensland.
Reason #1 – Breach of the Management Agreement
Your relationship with a property manager is governed by a management agreement. This is a binding contract that sets out what services they will provide. If the property manager fails to perform those duties, they may be in breach of contract.
Examples include:
- Failing to conduct routine inspections.
- Ignoring or neglecting to follow your instructions on repairs or tenant issues.
- Not providing accurate financial statements.
A breach of contract may entitle you to compensation if you can prove their failure caused you loss.
Reason #2 – Negligence Leading to Financial Loss
Property managers owe landlords a duty of care. If they act negligently and you suffer loss as a result, you may have a case for damages.
Common examples of negligence include:
- Failing to properly screen tenants, resulting in rental arrears or property damage.
- Ignoring tenant complaints that escalate into costly repairs.
- Not lodging the bond with the Residential Tenancies Authority (RTA) as required.
If their inaction directly causes you financial harm, you may be able to sue for negligence.
Reason #3 – Mishandling of Rent and Finances
A property manager has control over significant sums of money. Mismanagement of those funds is a serious breach of trust.
Issues that may lead to legal action include:
- Late or inconsistent rent payments to the landlord.
- Deducting unauthorised fees or expenses.
- Misappropriation of rent or bond money.
Because property managers are required to operate trust accounts under strict legal rules, mishandling rent or bond money may also amount to a regulatory breach.
Reason #4 – Failure to Comply with Queensland Tenancy Laws
For residential tenancies, property managers must comply with the Residential Tenancies and Rooming Accommodation Act 2008 (Qld). If they fail to meet these legal obligations, both the landlord and the tenant can be affected.
Examples include:
- Not issuing breach notices correctly.
- Failing to meet deadlines for repairs.
- Using the wrong forms when taking action against tenants.
These mistakes can result in delays, financial penalties, or disputes escalating to the Queensland Civil and Administrative Tribunal (QCAT).
Reason #5 – Poor Maintenance or Safety Oversight
Landlords rely on property managers to ensure a property is safe and well-maintained. If a manager ignores maintenance issues, it can have serious consequences.
For example:
Failure to arrange urgent repairs such as broken locks, plumbing leaks, or electrical faults.
Ignoring safety compliance issues like smoke alarms or pool fencing.
Not following up on tenant-reported hazards.
If a tenant or visitor is injured because of poor maintenance, both the landlord and property manager could face liability. A landlord may also sue the manager for failing to uphold their duties.
Reason #6 – Breach of Statutory Duties
Property managers must act in the best interests of their landlord clients. If they act dishonestly, provide misleading information, or put their own interests first, this may amount to a breach of their obligations under the Property Occupations Act 2014 (Qld).
Examples include:
- Misrepresenting repair costs to gain personal benefit.
- Making decisions without the landlord’s consent.
- Providing false information about tenants or rental arrears.
If you relied on their advice and suffered financial loss, you may have a claim against them.
When to Seek Legal Advice
If you suspect your property manager has breached their duties, it’s important to:
- Keep written records of emails, agreements, and notices.
- Document any financial loss or property damage.
- Follow up on issues in writing so there is a clear paper trail.
In Queensland, you can submit a complaint against a property manager to the Office of Fair Trading before moving to formal litigation. However, if the matter is serious or involves substantial loss, court action may be necessary.
A solicitor can assess your situation and advise whether you have a strong case to sue your property management company.
Disclaimer:
The information contained in this article is for general informational purposes only and is not intended to provide legal advice or substitute for the advice of a professional. This information does not consider your personal circumstances and may not reflect the most current legal developments. Should you need advice, please contact our firm for targeted information relating to personal your situation.
Greenhalgh Pickard’s Litigation Team
