REIV Leasing & Managing Authority

[Lyne]

I’ve been sent the REIV Exclusive Leasing and Managing Authority (8 pages) document by the PM we consider using for our IP. There are a few things in the General Conditions that I’m a little concerned about and want to know what you think.


1-Where the tenant fails to take occupation and the Client is entitled to any forfeited rent, the Client will take all reasonable steps to recover any such amount(s) from the tenant and/or any other person for may be liable for their payment and to pay the professional fees from the amount(s) paid or recovered.
Does that mean that the PM won’t make any effort to recover the money and it’s all up to us to do so?

2-If the Property is leased and no rent is received by the Agent, the Client will pay the Professional Fees and Managing Fees on demand.

Is this a common/normal thing?

To anyone who has signed this document before, Do you sign it as is or have you found in there alot of things you are not comfortable with?

 

[Peter Parker]

I’ve been sent the REIV Exclusive Leasing and Managing Authority (8 pages) document by the PM we consider using for our IP. There are a few things in the General Conditions that I’m a little concerned about and want to know what you think.

You can bet your bottom dollar that anything drawn up by the REIV will be biased in their favour.

Nowhere is this most obvious than in the agreement's one clause that punishes the agent.

This is the 'Agent's Warranty that the Agent is an REIV member' on page 5.

The Agent warrants (and will confirm upon request) that the Agent is at this date a member of the REIV, failing which the Client (and any signatory for the Client) is released by the Agent from any obligation to pay any professional fees. This warranty cannot be deleted or modified.

Though worded to make it appear that it protects the client (landlord) from an obligation, it effectively coerces the agency into REIV membership with a potential loss of their fees.

The line about the warranty not being deleted or modified makes it even more onerous (in the eyes of the casual reader - I'm not sure how legal such restrictions are). It is strange that agents are promoting hard an agreement that is so prejudicial to themselves (in this case the freedom to join or not join an industry group).

In summary, the agent can misperform all they like but the agreement protects them. But if they drop out of the REIV then they risk losing fees even if their management of the property has been impeccable.

As for:

2-If the Property is leased and no rent is received by the Agent, the Client will pay the Professional Fees and Managing Fees on demand.

Maybe the agent thinks that landlords loss of rent insurance will cover it (noting that agents often encourage owners to take it out with company X, so I'm not sure if there's a referral commission there). So the landlord may not be out of pocket, but the onus will be on them to chase it up while the agent keeps the dough.

I did recently make an amendment to this provision - will be interesting if they notice - suspect not.

In summary, I'm no lawyer, but it looks as if the agreement protects people in the following order:

1. REIV
2. Agent
3 (distant). Landlord

Hence it is reasonable to conclude that REIV (like any trade union) advances the interests of member agents above its stakeholders (most commonly landlords and tenants) but it appears to advance its own interests above everyone's.

Much like a non-unionist strike-breaking 'scab' is worse than the most rapacious top-hatted capitalist, a non-member agent must be equally despised, and, if necessary for the propaganda war, vilified as being less trained or professional.

 

[mitch]

Gday Lyne ,

the agent that has a property of ours in Melb has just sold the rent roll and the new agent has sent through the same form.

In the general conditions 7.2 , l crossed it out and int the change ( if you cant collect the rent im not paying fee's ) and condition 7.1 says that " the authoriety may only be modified by the written consent of the agent " , l didnt like that either so as i'm moderfying the form , l crossed it out and int the change.

If they dont like my offer then they can decline to take on my property , if they dont return my altered authority then they must be accepting it.

We are not sheep , if you dont like or agree with an offer someone makes , ( in this case an offer to manage our property ) then change it or .... not.

And just becouse no one else does that ( changes the authority ) is not a good enough reason to have me run with the flock.Make the agreement one you're happy with .

Regards Mitch

 

[Xenia]

I'm embarassed for them. Those clauses are nothing but dodgy and proove that the agents are more intersted in their own commissions than looking after your property.

What would happen if you sign the agreement and crossed out those clauses? Tell them that you are happy to pay management fees but not when the property is vacant! What exactly would they be managing in a vacant property?

 

[Lyne]

Thank you SO much for your answers!

I will cross out and modify what I'm not happy with send it back and see what happens. Like you say Mitch if they're not happy, I can always go find another PM. I'll let you know what happens.

Cheers

 

[Lyne]

What would happen if you sign the agreement and crossed out those clauses?

Well, she’s not very happy with my changes.

She said we couldn’t cross and/or modify anything on this agreement. It voids it because it’s a REIV document blah…blah…blah. Also said that all PM’s members of the REIV are using this same agreement meaning I either sign this one in its original form or try to find someone who is not a REIV member.

if they dont return my altered authority then they must be accepting it.

Mitch, How long ago did you send yours out?

I did recently make an amendment to this provision - will be interesting if they notice - suspect not.

Spiderman, how can they not notice…….nah don’t tell me

Not sure what to do from here. I will let it sit for a few hours.

 

[mitch]

Gday Lyne ,

the first time l did the changes was with the agent that has just sold the rent roll and the agreement was verbal along the lines of " if you arnt collecting rent then what makes you think im going to pay you a commission ?" and l altered the authority to match our conversation.

This time l just sent it off to the new agent which was yesterday so if they dont like it no doubt l'll here about it.

Perhaps you shold talk to the boss , when l got the letter advising me of the change l called the existing agent and told them not to assume that l will run with the new agent and the next day the owner of the new agency rang me to introduce himself.

Regards Mitch

PS l also altered the authority period as well , they had a 365 exclusive and l crossed it out and put 30 days and l did tell him in our phone conversation that l was doing this .