Navigating new management with an existing tenancy agreement

Has your agency been appointed to take on the management of a property where there's an existing tenant in place?

If you're unfamiliar with the process of taking over the management of a property with existing tenants in place, it's important to pay extra attention to your responsibilities as the new agency or property manager. Typically, this scenario occurs when:

• a Lessor changes managing agents during the term of a tenancy;
• a self-managing Lessor appoints a property manager during the term of the tenancy;
• a rent roll has been sold/purchased during the term of a tenancy; or,
• the premises has been sold with the tenancy in place and the buyer appoints a new managing agent on settlement.

In taking over the management, as the newly appointed agent it's your responsibility to notify the tenant in writing of the change of managing agent, as well as any changes to the method and place of rent payment¹. At this stage, you're also required to seek mutual acknowledgement of this change in writing from the tenant.

Further to this acknowledgement and not in place of, you're also required to comply with Section 206 of the Residential Tenancies & Rooming Accommodation Act (RTRA Act) which notifies the tenant of the change of agent details. Section 206's written notice is a separate letter available via Realworks and must be sent within 14 days of taking over the management of the property.

The completion of a Section 206 notice means you don't have negotiate a new mutual agreement to end the current agreement and the signing of a new General Tenancy Agreement Form 18a updated with your details - a convenience for everyone involved.

It's also important to note that Section 206(3) of the RTRA Act allows you to stand in the Lessor's place at QCAT proceedings, although you're required to show documentary evidence that you represent the Lessor. Standard Term 43 of the General Tenancy Agreement Form 18a allows for agents (property managers) to stand in the Lessor's place at Tribunal unless a special term states otherwise.

For further clarity on how to manage a property with existing tenants, refer to Standard Term 43 of the General Tenancy Agreement Form 18a and Section 206 of the RTRA Act below:

Standard Term 43: Lessor's Agent

• The name and address for service of the Lessor's agent is stated in this agreement for Item 3.

2) Unless a special term provides otherwise, the agent may:

(a) Stand in the Lessor's place in any application to a Tribunal by the Lessor or the tenant; or,

(b) Do anything else the Lessor may do, or is required to do, under this agreement.

Section 206 of the RTRA Act states:

Lessor's or Agent's Name or Other Details

1) On or before the day the tenant starts occupying the premises, the Lessor or Lessor's agent must give a written notice to the tenant stating:

(a) the Lessor's name and address for service; or,

(b) if the Lessor has an agent who is authorised to stand in the Lessor's place in a proceeding prescribed under a regulation (the prescribed proceeding) - the agent's name and address for service. Maximum penalty - 20 penalty units.

2) If a detail mentioned in the notice changes, the Lessor or agent must give written notice of the change to the tenant within 14 days after the change. Maximum penalty - 20 penalty units.

3) If details of the agent mentioned in Subsection (1)(b) are given to the tenant under this section, the agent stands in the Lessor's place for a prescribed proceeding and, for example:

(a) the proceeding may be taken against the agent as if the agent were the Lessor;

(b) a tribunal may make an order against the agent as if the agent were the Lessor; and,

(c) settlement may be made with the agent as if the agent were the Lessor.

4) In this section - address for service means:

(a) for an individual - the individual's place of residence or place of business; or,

(b) for a body corporate - the body corporate's registered office or place of business.

Sources:

¹ Item 9 and Item 10 of the General Tenancy Agreement Form 18a.

REIQ members - do you have more questions? Email ask@reiq.com.au or call 1300 697 347 to speak to a member of our Property Management Support Service team.