blanket indemnity for the agent to be paid by property owner?

[needtolearn]

Hi, we are about to sign a property management contract and notice that one of the terms of the contract is as stated below:

". Agent Indemnity:
The owner hereby indemnifies the agent against any actions, suits, demands, claims, costs or other expenses brought against or made upon the agent or incurred by the agent arising out of this authority".

Is this a fair and acceptable condition for us IP owner to accept? Have anyone signed property management contracts recently? Can you share with us what you think of this? Thanks a lot for any helpful inputs.

 

[boomtown]

Cross it out. If the agent complains tell them you expect them to take responsibility for their own actions.

Ask them to explain to you what is it that they are going to do that they cannot take responsibility for.

 

[mattysavager]

It's normal.

In QLD, and I'm sure it's the same in other states, the state government writes those clauses.

No agent in their right mind would sign a management agreement without a rock solid, air tight indemnity. If you cross it out, I can almost guarantee that they will walk away.

In reality, the managing agent makes almost no decisions. They offer advice, and allow the client to make decisions - The client gets to make the final decision on approval of applications, maintenance, rent increases, lease period & terms, repairs, advertising.

Usually these clauses DO exclude indemnity when the agent fails to comply with the agreement - i.e. they do not carry out any routine inspections (if that service is specified in the agreement).

It's a bit like the director of a company having a personal assistant to arrange things on their behalf (take calls, organise meetings). Would you expect that assistant to take responsibility for decisions of the director that result in the collapse of the company? Certainly not.

 

[thatbum]

Might as well leave it in because that type of clause would almost certainly never hold up in court anyway.

If they stuff up and cause the owner loss, then they're probably going to be liable anyway - it doesn't matter if they try and sign themselves out of liability.

<- Solicitor.

 

[Terry_w]

A real estate agent is acting as your 'agent' in the legal sense. This means they do things on your behalf so they should be indemnified to a certain extent. If they act outside the scope of the agreement then the indemnity would generally not apply, nor would it apply to fraud committed by them etc.

 

[Scott No Mates]

as terry said the agent must work within their authority if they go beyond this then it is at their risk.

 

[eunicebrail]

Discuss that thoroughly with the agent because you don't want to enter into a full obligation if you have some doubts regarding the contracts as well as other possibilities that are in there. Better to clear it first before you agreed to it and sign the papers.