A management agreement is a contract between the owner and Magain City Realty.  It defines what services are the responsibility of the property manager and what tasks remain with the owner. Additionally, this agreement will include any applicable fees for these services. 

Before a management agreement is signed, an inspection of the property should be conducted to ensure that the property meets management standards, housing standards and a historical search done to make sure the person actually owns the property.    A rent appraisal of the property and discussion around expectations on rent and the fees charged by Magain City Realty should have been discussed with the owner prior to sending a management agreement out for signing.

Legislation 

The legislations applying to management agreements are:

• Land Agents Act 1994 (licensing of an agent and authority to act in writing)

• Competition and Consumer Act 1995 (advertising and acting with due care)

• Equal Opportunities Act 1984 (approving a tenancy)

• Privacy Act 1988 (applies if a business earns over $3M in revenue)

Variations to the agreement

Any term or condition made in a management agreement can be varied if agreed to by both parties.  This could be but not limited to fees, services etc. 

While REISA (Real Estate Institute of South Australia) will accept variations via email, best practice is to do an addendum which both parties can sign.

Extending a management agreement period

After the term of management has expired, it is generally recommended that a new agreement be entered into for a further fixed period.  However, this is not general practice for two reasons:

1. Each time the tenancy agreement is extended, the period of the management agreement is automatically extended

2. It gives the owner the opportunity to renegotiate the terms and conditions or worse, move the property to another agent.

Sole Agency 

A sole agency is an agreement where a single real estate agent is appointed for the purpose of the marketing and letting/selling process of a property. 

Magin City Realty will only act under a Sole Agency.

Termination of a sole agency

This can only be done by:

·        Mutual agreement

·        Expiry of the marketing period if the property is not leased

·        Provision of 21 days written notice from the landlord prior to the expiry of notice to end the agreement.

Fiduciary duty of a property manager 

Fiduciary relationships exist when a person has undertaken to act in the interest of another and not his or her own interests.

The management agreement falls under contract law and the relationship is between the Agency (not the property manager) and the owner.    The owner can sue the agency under contract law for negligence and breach of contract.

There are 4 main duties:

Loyalty

·        put the clients interest above your own

·        not put yourself in a position of conflict without informed consent

·        must not make a profit from their position without informed consent

·        act in the best interest of the client and in good faith

·        disclosure of any information which may benefit the client in negotiation

·        obey all lawful order that the client gives them

 Care

·        use skills to the best of their ability on behalf of the client

 Confidentiality

·        keep any information given to them about the client, their business, financial or personal affairs confidential

 Accounting

·        account for all funds entrusted and not combine client/customer funds with their owner personal/business funds.   Trust Accounts are used for this purpose

Rental Appraisals

Before agreeing to bring on any new property for management, it is important to:

·        physically inspect the property to ensure it is up to expected standards

·        conduct a rent appraisal

Rental appraisals should be done by comparing similar properties which are being let or recently let in the same area with similar features.

This can be done by:

·        reviewing current properties listed with Magain City Realty

·        RP Data for a Comparable Market Analysis

·        reviewing realestate.com.au, Domain and similar websites

Your findings should then be discussed with the owner and a rent range determined for marketing to commence.   

It is always important to remember that, if the owner wishes to start at a higher rent than you would expect to achieve, it is best practice to do so.  If you have no success in letting the property within a week or two, feedback is essential to help negotiate the rent back to a more achievable figure.

Termination

The landlord may choose to terminate a management agreement when:

·        the lease ends and they require vacant possession

·        the property is to be sold at the end of the tenancy

·        the property is to be renovated

·        they elect to transfer management to another agent

·        they wish to self manage

·        Magain City Realty have breached terms of the agreement

Should a landlord wish to terminate management during a tenancy period, they are required to give 60 days' notice.

If the landlord wants possession of the property immediately, City Realty is entitled to charge management fees which would have been payable for the 60 days period on rent collected.

Termination of management at the end of the lease period does not incur penalty.

Role of BDM

The business development manager works in strategic planning, sales management and prospecting for new clients to help grow the rent roll and are key members of the team.

Responsibilities may include:

·        Identifying opportunities in target markets

·        Generating leads through networking or cold calling

·        Developing relationships with clients

·        Keeping up with industry changes

·        Assessing the client's needs and ability to meet those needs

·        Follow up on new leads and referrals