The management agreement - the most important document in your business

Most would agree with the statement “if the management agreement is not completed correctly, we have no business”. The importance of understanding and completing the agreement cannot be overstated.

The basic principles of completing the management agreement with the landlord client include

·        Everything should be completed with something

·        There should be no blank spaces on the form *unless the form indicates to leave the part blank if it cannot be completed

·        Blankness creates legal argument and uncertainty

·        Public liability insurance details of the landlord is a must

·        All instructions from both parties should be as clear as possible

·        Title searches are strongly recommended as a minimum duty of the agent to verify ownership

·        Identification from the landlord is strongly recommended

·        Landlord disclosure statement is recommended to form part of the management agreement (available as part of the Real Estate Excellence PME system and Platinum Membership)

·        Signatures are a must from all parties

·        For quality insurance the licensee or senior staff member should review the management agreement prior to being finalised (as another set of eyes for risk management)

·        Best practice is to have all parties initial each page of the form

·        Ensure the landlord receives a copy of the completed agreement and evidence can be provided of this

Above are just some of the best practice principles of management agreement completion. Another recommendation is to offer a sign up over the phone service for absentee landlords; an appointment over the phone or Skype for landlords who cannot come into the office. Don’t just fax, email or post the agreement with ‘sign here’ indications. Consider your agency duty of care and professionalism!

Real Estate Excellence offers a 20 minute landlord sign up CD with explanation of their obligations plus a landlord listing booklet. Mention this blog to receive a discount of the service!  To view an example visit http://www.youtube.com/watch?v=mPSg3aTpnkQ

Real Estate Excellence can also provide a consultation review service of your management agreement for $220 including GST. The service includes the following

·        Review of your agency form and recommendations in writing of best practice

·        Explanatory notes for the landlord when emailing the agreement

·        Landlord disclosure statement

Services offered above are for Queensland only. NSW landlord listing booklet service is available.

For more information please contact Stacey Holt –stacey.holt@realestateexcellence.com.au

www.realestateexcellence.com.au