FAQs: The PO Form 6

Property Management,  Property Managers

The Property Management Support Service (PMSS) team fields up to 100 calls a week from REIQ members seeking clarity on certain topics – with the PO Form 6 being the trending topic of late. Have a topic you’d like us to cover in an upcoming edition of the PM Update? Email us at pmsupport@reiq.com.au!

Insurance

Q: Is it law for an owner 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

Q: 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 in Part 9 of the PO Form 6 that you state these as attachments so they 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 they may become the insurer by default.  It’s 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

Q: I’m looking at buying a rent roll. 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 that the agent who has purchased the rent roll 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 which 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 the agreement was entered into.  REIQ Members should contact the PMSS team for further advice in relation to these requirements.

Terminating a Form 6

Q: If a property is vacant and the owner wants to terminate the agreement with another agent, how much notice do they need to give?

A: Part 5 of the PO Form 6 requires the owner/agent to provide 30 days’ notice in writing for a continuing appointment. This applies for both a tenanted and nontenanted property. The period can be less if all parties mutually agree.

If the Appointment is a PAMD 20a, it is 90 days’ notice or less, although it mustn’t be less than 30 days’ notice.

 

Q: 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 if it is the PO Form 6). If the Appointment is a PAMD 20a, it is 90 days’ notice or less, although cannot be less than 30 days.

What this means is if an owner notifies the office they will not be renting the property out as they will be moving back in once the tenant vacates, you need to confirm in writing based on the notice requirements as to the date your Appointment will end. Once the agreement has ended, 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 any other property management topic can call the PMSS Team on 1300MYREIQ (1300 697 347) or email pmsupport@reiq.com.au.  Not a member? Join us today!

 

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