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Property management firms are deemed to be the Landlord where no other person is specified on the tenancy agreement

Scotney Williams L.L.B 1

I have had a number of cases where the owners of managed properties refuse to pay for essential repairs. This can be frustrating for the property management firms as they spend valuable time trying to persuade the owner that the repairs are essential. If the repairs are essential, then the owner and the property management firm have a legal obligation to get them done and in a timely manner. It is important that owners understand that property management firms are doing only what the law requires. They are not spending the owners’ money for the sake of it. Property management firms know only too well that owners want to derive a return on their investment and accordingly there is a need to keep a careful watch on what monies are spent on the property.

However, from the tenants point of view, if repairs are essential then they have to be done and that’s the beginning and end of it. If asking politely does not work then any tenant can bring an action in the Tenancy Tribunal to get the work completed. The tenant brings the action against the property management firm because the property management firm is the only firm they have dealt with. In fact the tenant may not even know who the owner is.

This action is known as a “work order” and these work orders can be particularly effective. The ‘work order’ specifies the work to be completed and the time frame within which it must be done.

I hear a number of property management firms recounting how the owners say they cannot afford the repairs. Affordability will never will be an excuse. If the owner genuinely cannot afford the repairs, perhaps it is time to sell the property and make a different form of investment. If a work order is made against the property management firm then they are compelled to complete the work.

The difficulty in this situation is that the tenant will bring an action against the property management firm and obtain a work order against that firm when the property management firm has done nothing wrong and was in fact trying to do everything correctly. The property management firm would feel quite justified in saying at the Tenancy Tribunal, “please don’t make the order against us, please make it against the owner, we have done everything expected of us but the owner refuses to place us in funds sufficient to complete the work”.

In 2004 in a case in Hamilton the Tenancy Tribunal made an order against the property management firm because they were the only target the Tribunal could aim at. Theirs was the only name recited as landlord on the tenancy agreement, there was conflicting evidence even as to who the owner was, they had not filed the application as ‘agent for the owners’ nor had the property management firm included the owners as ‘an other party’.

In short, if the property management firm is the only name on the tenancy agreement then the Tenancy Tribunal is entitled to treat the property management firm as “the landlord” for the purposes of the RTA.

What are the implications for the parties?

Property Managements firms should have a property management authority which authorises them to recite the names of the owners on the tenancy agreement. The property management firm should then recite the owners names on the tenancy agreement and in each case, record all steps taken to meet the tenants requirements to effect the necessary repairs. When all is said and done this is an “owner liability” issue, the repairs still have to be done just as if the owner was managing the property.

The owner should have a clear understanding of the obligations to effect essential repairs and simply get on with it, in the most economical way possible.

Tenants should always contact the landlord in writing and set out clearly what work needs to be done and ask for a time scale by which the work might be completed before taking any further steps.