Management Agreement

[Fergus]

I am about to change pm however was reading the Management Agreement form of the new PM and as a special instruction they have added that if the property is offered for sale whilst tenented or sold to the tenent the agent will have exclusive selling rights and will be paid sales commission at the current statute rate. I am not planning to sell however feel that if the need arises this restricts my options some what . I was aware that if the tenant purchased then comission would be paid however have not had the exclusive selling rights before. am I being picky ?? your opinions would be appreciated

 

[Jamie]

I am about to change pm however was reading the Management Agreement form of the new PM and as a special instruction they have added that if the property is offered for sale whilst tenented or sold to the tenent the agent will have exclusive selling rights and will be paid sales commission at the current statute rate. I am not planning to sell however feel that if the need arises this restricts my options some what . I was aware that if the tenant purchased then comission would be paid however have not had the exclusive selling rights before. am I being picky ?? your opinions would be appreciated

Hi Fergus,

Dont sign it. All management agreements are tilted in favour of the agent - the Real Estate Institute that devises the management/sales agreements that agents use is there for the agent, not the landlord. This, however, is the first time Ive seen a PM insist on a clause entitling them to a fee should the property sell during the tenancy - this is sheer, unadulterated greed.

Feel free to cross out whatever sections of the agreement you feel are unwarranted, irrelevant, or downright ludicrous (as the clause you mentioned seems). If the agent wants your business, they will agree to a revised agreement without this clause. I would treat any agent that uses this tactic as highly dubious and would ask them to explain how this clause would benefit you as the owner.

If they insist on this clause staying in the agreement, look elsewhere.

Jamie.

BTW, never agree to the standard 90 day clause for removing a PM - if the PM is underperforming, why should you have to wait 3 months to sack them? I always make a point of removing this clause and inserting one closer to 4 weeks - remember, the PM works for you, not the other way around )

 

[quiggles]

This is a standard clause in the ACT contract. Cross it out. If they don't like it, tough - tell them you're hiring a property manager, not a sales agent. I also tend to restrict the amount of notice I'm forced to give them, on the basis that they are continually earning their job with me. Non-performance is the only thing that will get them sacked and a two week notice period is simply a courtesy that (if I do have to sack them) I may not even feel that I owe them. Two months (as i have been asked to sign for) is not on.

 

[duncan_m]

I am about to change pm however was reading the Management Agreement form of the new PM and as a special instruction they have added that if the property is offered for sale whilst tenented or sold to the tenent the agent will have exclusive selling rights and will be paid sales commission at the current statute rate. I am not planning to sell however feel that if the need arises this restricts my options some what . I was aware that if the tenant purchased then comission would be paid however have not had the exclusive selling rights before. am I being picky ?? your opinions would be appreciated

Grrr, it's underhanded sly little gotchas like this that really get my goat up about Real Estate Agents.

 

[Kiwi Investor]

Can you believe that !!
Personally I think a Real Estate who also does PM can be a conflict of interest.
I would not sign such A contract (it would get the black marker pen over it)and would be asking the Real Estate what exclusive right they have to sell your property for you should you decide to sell, they should pay you !!
I personally use specialist PM companies in NZ to manage my IP's, for this type of reason.
Report then to Fair Trading and the REIQ !!!

K

 

[agent 86]

Fergus,

Cross out bits like that and include some of your own unreasonable conditions.

A86

 

[liverpoolharryk]

Fergus,

For sure I would be crossing this out.

The PAMD form 20a Property Management Agreement is the form you need to sign & what I understand, a property management form only. It cannot be used in conjuction for any other reason. An agent needs a PAMD form 22a signed in order to sell your property, which should be signed seperatly. A quick phone call to the Office Of Fair Trading will tell you that. Years ago this was common practice among agents, but I have not seen an agent do it in a very long time, it's something I would never do!

David, Kevin, Asy would you agree?

Cheers
Jarrod
Jarrod Lane Real Estate