Terminating Property Management Agreement

[agagan]

Hello Everyone,

I have a investment property in QLD listed for rent. The property has never been rented and is vacant now for more than 5 weeks . As the agent could not find a tenant, would it be possible to terminate the contract with the real estate agent immediately without incurring any charges or do I have to give the agent 90 days notice as stated in the PAMD 20a

Regards,
Gagan

 

[Propertunity]

......or do I have to give the agent 90 days notice as stated in the contract.

So your question is really: "Do I have to abide by a contract condition that I read and signed up to?"

Gagan, you should be able to have a conversation with the agent, and weasel out of the deal. Sorry to hear about the vacancy. Have they been advertising and doing Opens for you? ....or is the rental market really that bad?

 

[Nash13]

I have a investment property in QLD listed for rent. The property has never been rented and is vacant now for more than 5 weeks

Drop the asking rent? Maybe your not meeting the market, dropping the rent a few dollars per week wont hit your bottom line as much as another 3-4 weeks of an untenanted property will.

 

[Tom Ipswich]

I was under the impression that without an existing tenancy agreement the notice period was irrelevant. I'm ashamed to admit I don't know the intricacies of the agreement though.


If you are happy with the advertising, may I suggest dropping the rental price? You'll find that if you're advertised at or below market value (not necessarily a bad thing) you will attract high quality 'value-aware' tenants. What feedback has your Property Manager offered?

 

[sharpcq]

While legally, an agent can hold you to the management agreement then if the property is vacant then most will let you go immediately. There is only one R/E in my area that actually enforces the Notice period.

Have you considered obtaining another agent/property manager to market/work in conjunction with your current agency?

 

[lee.omare.com.a]

I suggest you explain the situation to the agency licensee and ask if you can terminate without consequence. They might say no problem as a gesture of goodwill. In NSW another strategy is to threaten Tribunal if the agency has managed your property poorly which will spook any agent. Cheers

 

[KathrynF]

Hi There

I'm a PM in QLD and most agencies that I have encountered won't enforce the Notice Period on a vacant property. By law, we are supposed to but technically, there is no income being generated and thus what are they losing? Also, my idea of the Management Agreement is that you are signing for them to provide you a service. If they are not providing this service, you should have every right to terminate immediately.

They may try to get their advertising expenses out of you though.

I have heard that with the new amendments to the Property Agents Act, this may be one of the things that is being addressed.

I always say to my clients who are unhappy, discuss it with the licensee and put forth the reasons why you are unhappy. Most would be prepared to let it go to save face.

Best of luck.

 

[beachside]

I get wiser with every PM agreement. My current one has a clause where the agreement can be terminated by the owner without prior notice if not tenanted. . Don't be afraid to add your own conditions, and never more than 30 days notice to terminate. Most realize that a PMA with conditions is better than none, although some franchise agencies have a very high opinion of their services and won't budge on anything ....and don't get the management!

 

[MichaelGilbert]

I never refused an owner who wanted to end the management agreement. If it was not tenanted I would let them go straight away and if it was in the middle of a tenancy I would ask for a week to get everything tied up so it was ready for the next agent or the owner to take over. I could not manage a property on behalf of someone who didn't want me to. Just would not be good business. So I agree with most of above - have a chat to the agent I'm sure they'll just let you out. (apologies for possibly being late on responding).

 

[beachside]

And most agencies I have spoken with look at it in the same way, although some take longer to think about it than others. Once again, the independents are more flexible/personal in their thinking, franchise agencies tend to place business over mitigating ill feelings.

 

[Dazz]

Looks like weaselling out of contract conditions that have been fully agreed and executed by both parties is not limited to only one section of the community.

Is your integrity that low in your own estimation that you'd be prepared to go down that path ??

 

[sharpcq]

Looks like weaselling out of contract conditions that have been fully agreed and executed by both parties is not limited to only one section of the community.

Is your integrity that low in your own estimation that you'd be prepared to go down that path ??

Did I really just read that?

 

[Dazz]

Did I really just read that?

Pray tell, do you regularly break contract commitments ??

Do you fully encourage other parties to break contract commitments with you ??

I've had a look on your website, and you don't mention that you support such dreadful behaviour ??

 

[sharpcq]

Pray tell, do you regularly break contract commitments ??

Do you fully encourage other parties to break contract commitments with you ??

I've had a look on your website, and you don't mention that you support such dreadful behaviour ??

Our satisfaction guarantee

Assuming you didn't look close enough? Our satisfaction guarantee covers it.

A client breaking contract when conditions aren't being met I do support and even encourage. The reality is some agents have the drive and commitment and some are pure lazy and aren't worth the percentage they charge.

If any of my properties were vacant for 5 weeks then clearly I haven't done my job - regardless of the vacancy rate!

 

[sharpcq]

Change your agent...

And also this link, Dazz.

 

[Dazz]

Our satisfaction guarantee

Assuming you didn't look close enough? Our satisfaction guarantee covers it.

I stand corrected on the 2nd point - you obviously do encourage other parties to break contract commitments with you. No point having a contract if it ain't binding.

How'd you go with the first and primary point though ?? Do you regularly break contract commitments ??

The whole concept is a nonsense imho.

 

[wylie]

I see the second point as not breaking a contract, but I'm assuming sharpcq will "buy out" or manage for free the break notice period under the old agency agreement. That way the fees due during the notice period are paid to the old agency (and they do no work to earn those fees), whilst the new agency manages for that same period for no cost. At least that is how I read it.

This is quite common and is not breaking the original agreement.

 

[sharpcq]

I stand corrected on the 2nd point - you obviously do encourage other parties to break contract commitments with you. No point having a contract if it ain't binding.

How'd you go with the first and primary point though ?? Do you regularly break contract commitments ??

The whole concept is a nonsense imho.

If I was in contract with someone who wasn't holding up their end of the deal, then I wouldn't hesitate to look for a way out. You're an idiot if you don't.

If we are getting down to it, a management agreement really isn't effective until such time a tenant has been secured. After-all you can have a management agreement in place with 2 or more agents consecutively.

Any agent who tries to enforce the notice period without a tenant in place is clearly desperate for the business and I would question their ethics from the get-go.

 

[beachside]

Getting back to the main point

I could not manage a property on behalf of someone who didn't want me to. Just would not be good business.

So for everyone except Dazz, it would be an amicable divorce and minimizing further ill feelings, but a break in contract .......agreed to by both.

For Dazz, frustrated with bad management and voicing his concerns (and Dazz being Dazz would speak up ), he would put up with bad management because he would not dare suggest breaking the agreement, even though the agent would be willing to agree to this.

Can you imagine if the agent said "I realise we have not lived up to your expectations and I am an not happy in the service we have provided either, would you like to change agents - I won't hold you to the agreement, just let me know and I'll work with you and who is taking over". Dazz says "no way, you are not weaseling out of the agreement."

A pin is heard hitting the floor, just before the agents bottom jaw.

 

[Dazz]

For Dazz, frustrated with bad management and voicing his concerns (and Dazz being Dazz would speak up ), he would put up with bad management

....you're making about 4 bad assumptions with your post....let me just deal with the quoted portion.

The first of which is I would get myself into this contractual situation in the first place. Bzzzt....wrong.

Unlike some people, I seriously consider all aspects of a contract before entering into one. I'm one of those boring types who actually read the fine print.....I suppose because one of my main tasks nowadays is to write the fine print.

Executing a legally binding contract is a big deal for me, because I honour my commitments made within the contract. I expect the other party engaging with me to approach the contract with the same level of responsibility.

I would never "put up with bad management".

It is for this reason I do not enter into management contracts, especially with residential property. Gagan on the other hand takes a differing view....and hence he must entertain this prospect.

The fictitious conversation you just made up involving me could never happen.

The other 3 reasons, based on the above, don't even get to the starting line, so there is no point addressing those.