REIQ Essential Terms and Conditions

[strangep]

Hi everyone

I've recently purchased an IP in the inner southern suburbs of Brisbane. It's almost ready to be let and I've been interviewing potential property managers in order to find the best deal.

In the negotiations I've asked to include a number of special conditions under Section M of the Property Management Agreement that's normally completed in Queensland. One of the conditions I've asked to be included specifically relates to a clause in the REIQ Form 130 Essential Terms and Conditions that reads as follows:

11.1 The Lessor indemnifies the Agent and therefore must pay the Agent for liability, loss, or costs the Agent suffers or incurs from all actions, claims, demands, damages, and expenses arising out of or in respect of its capacity as Agent of the Lessor.

My solicitor and the Property Owners Association of Queensland have both advised me that this clause is very much in favour of the Agent and could allow them to avoid costs that arose out of some fault or failure to act on the Agent's part.

The condition I proposed to try to limit the liability being imposed on me by Clause 11.1 reads as follows:

The Lessor does not indemnify the Agent for any liability, loss, or cost the Agent suffers or incurs from any action, claim, demand, damage, or expense arising out of or in respect of its capacity as Agent of the Lessor where the action, claim, demand, damage, or expense arises out of failure, fraud, or negligent conduct by the Agent.

At this stage none of the Agent's I've contacted have indicated whether or not they would be prepared to accept this condition.

Can anyone out there comment on whether I am being too pedantic on this. As I am based overseas and this is my first IP I am just looking to protect my rights as much as possible from the outset.

Can anyone suggest an alternative clause that may suit both sides?

Alternatively, does anyone know of a Property Manager who may be prepared to accept a condition such as the one I'm proposing?

Any suggestion or comments greatly appreciated.

Thanks

Paul

 

[bbg2003]

Just cross the clause out, initial it and give it back to the agent.


best wishes
bbg2003

 

[strangep]

Thanks bbg

Tried that and it wasn't acceptable to them...that's why I've tried to come up with a solution that's fairer for everyone involved but so far haven't had any takers.

Cheers

Paul

 

[bbg2003]

Have you tried a jenman agent, since they are supposedley against those reiq (unfair) contracts?

 

[strangep]

Hi bbg

No, I hadn't contacted any Jenman agents but I do know of one in the area so I'll contact them and see how they stack up.

There must be thousands of IP owners in Queensland who have signed these REIQ agreements though, all containing this clause 11.1. Am I the only one who is concerned about the implications of this or have others sought ways around it??

I'd be grateful for any feedback.

Cheers

Paul

 

[chris_qld]

Special terms

Paul,
I posted weeks ago. The address is http://66.111.38.199/forums/showthread.php?s=&threadid=8176

I have been modifying the special terms based on my experience and recommendation from others:

M. Special instructions to agent:
(1) The agent indemnifies themselves and therefore must pay themselves for liability, loss or costs it suffers or incurs from all actions, claims, demands, damages and expenses arising out of or in respect of its capacity as agent of the lessor.
(2) The agent agrees that the lessor is allowed to terminate the Appointment by giving 30 (thirty) days notice in writing to the agent.
(3) The agent and the lessor agree that no commission and fees are due after the date of lessor’s written notice to the agent terminating the Appointment owing to negligent conduct, failure or fraud by the agent.
(4) The agent must obtain the client’s approval before ordering goods and services if the price of the goods or service exceeds the amount authorized in Item 6.3 on the PAMD Form.
(5) The agent will immediately inform the lessor details of all the repairs and maintenance carried out.
(6) All contractors and tradespersons engaged by the agent to carry out repairs etc. at the property should have a current license with the Building Services Authority and have the appropriate insurance. The agent has no financial interest in awarding work to them.
(7) The agent will contact the lessor for non-emergent repairs without delay and will accept lessor’s recommendation with regard to choosing the contractors and tradespersons.
(8) The agent will carry out inspection three monthly and will provide a copy of all inspection reports. The agent may be permitted to conduct inspection four monthly when the lessor is satisfied with the conditions of tenancy after a period. The lessor will inform the agent in writing.
(9) The agent agrees to involve the lessor in the inspection of the property when the lessor requests.
(10) The agent will attend Small Claims Tribunal hearings.
(11) The agent will supply legible copies of tenancy paperwork within 7 (seven) days if requested.
(12) The agent agrees to notify the lessor of all breaches within 3 (three) days.
(13) The agent agrees to consult with the lessor prior to refunding bond.
(14) The agent is to request in writing a forwarding address from the tenant on termination of the tenancy.
(15) Agent will request tenant to complete “REIQ Agreement to Terminate Fixed Term Tenancy” FM 123 on notification by the tenant of early termination.
(16) Tenants should not be relatives or friends of agent’s staff.

N. Special conditions for tenancy:
(1) The lessor/agent to be the first point of contact for emergency repairs.
(2) The agent uses the Special Terms of the Property Owner’s Association of QLD.
(3) Only persons named in the tenancy agreement are allowed to reside in the premises.
(4) No installation of fixtures and fittings to the place is permitted.
(5) The tenant/s must frequently test the smoke alarms installed to ensure they function normally. The tenant/s will buy the batteries at their own cost.


Chris