FAQs: The PO Form 6
The REIQ's Property Management Support Service (PMSS) team has put together some frequently asked questions from property managers about the PO Form 6.
Q1: Is an owner lawfully required to have to have $10 million public liability insurance before we can manage their property?
A: No, it isn't law. However, if you use the Realworks version of the PO Form 6, it's a Contractual Obligation for the owner to obtain and maintain insurance policies for term and condition 4.15:
4.15.1 public liability providing cover to a minimum of $10 million;
4.15.2 provide to the Agent, upon request (no more than annually), a certificate of currency of the insurance taken out in accordance with Clause 4.15.1
Q2: Why is this a Contractual Obligation? Does this mean we can cross it out and still manage the property if we want to?
A: The Realworks version of the PO Form 6 has a schedule and essential terms and conditions attached to the Statutory PO Form 6. It's imperative that you notify your client in Part 9 of the PO Form 6 that the Schedule and Essential Terms and Conditions form part of the Statutory PO Form 6 (see example below).
The Schedule and Essential Terms and Conditions have been developed by Carter Newell Lawyers. If an owner doesn't hold or maintain public liability insurance and a tenant or their visitor suffer an injury at the rental property, which isn't attributed to negligence by the property manager/agent, then the agency will have a greater exposure to risk.
The requirement to insure is included in the Essential Terms and Conditions for the protection of the Appointed Real Estate Agent in the event of a claim.
RENT ROLL ACQUISITION
Q3: I'm looking at buying a rent roll, all owners have signed a PO Form 6. Do I need to have all new PO Form 6s signed by the owners?
A: Section 113 of the PO Act allows for the assignment of the PO Form 6 so it's not a legislative requirement for a new PO Form 6 to be completed and signed by the owners for the new managing agent.
It is, however, a requirement of the agent who has purchased the rent roll to provide a Notice of the Assignment of the Appointment within 14 days of the Assignment. The REIQ has developed a template which is available on Realworks that meets the prescribed requirements for the Assignment of Appointment Notice.
Note: If the Appointment is on the PAMD Form 20a there are different requirements depending on what the client has agreed to and the date of the appointment. REIQ Members should contact the PMSS team for further advice in relation to these requirements.
TERMINATING A PO FORM 6
Q4: If a property is vacant and the owner wants to terminate the agreement with the current managing agent, how much notice do they need to give?
A: Part 5 of the PO Form 6 requires either the owner or the agent to provide 30 days' notice in writing for a continuing appointment. This applies for both a tenanted and non-tenanted property. The period can be less however both parties would need to agree to this.
If the Appointment is a PAMD 20a, it is 90 days' notice or less, although it mustn't be less than 30 days' notice.
Q5: An owner has moved back into their property and they're being unrealistic about their expectations of the bond claim and compensation from the tenant. Didn't the Appointment end when they moved back in?
A: No, the Appointment needs to be terminated with at least 30 days' notice (or less if mutually agreed in the PO Form 6). If the Appointment is a PAMD 20a, it is 90 days' notice or less, although it cannot be less than 30 days.
What this means is if an owner notifies the agency they will not be re-renting the property as they are moving in, you need to be clear as to when the Agency Appointment will terminate.
You will need to confirm in writing to the owner the date the 30 days' notice will take effect. As of this date, your Agency Appointment will have ended and you can no longer act on the owner's behalf. If there are ongoing bond issues requiring RTA dispute resolution or a QCAT hearing, the owner will need to self-represent.
Naturally, on the termination date you would provide all necessary documentation for the owner to do so. For example: entry condition report, exit condition report, photos etc. In the event the owner self-represents they can request you be a witness at a QCAT hearing.
REIQ members seeking further advice on this topic or others can email the Property Management Support Service on firstname.lastname@example.org or call 1300 697 347. Not a member? Join us today!
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