Promises and paper trails – a timely reminder for property managers

The very recent Queensland Civil and Administrative Tribunal (QCAT) decision of Krisztina Hever v Livia Szikora [2026] QCAT 374, is a timely reminder that property managers who engage contractors will bind their lessor clients to paying the contractors’ costs - and failing to document instructions, lessor authorisations, and confirmation of insurance claims can leave everyone exposed.

In this decision, QCAT touched on issues that arise regularly in residential property management: verbal quotes, no written contracts, insurance disputes, and the question of who is ultimately on the hook for payment of contractor invoices when things go wrong.

Background

A Jimboomba investment property owner engaged a Queensland real estate agent to manage his property after the previous tenants had left the house in poor condition. The property manager was instructed to return the property to a lettable state and was asked to arrange repairs which would be claimed under the lessor’s landlord’s insurance policy. As part of this work, the property manager engaged an experienced house painter to repaint the interior and parts of the exterior of the property.

The painter attended, assessed the scope, and provided a verbal quote of $16,300 to complete the works. The property manager accepted the painter’s quote. The acceptance of the quote was not documented and no written contract was prepared. The painter completed the works on 19 October 2023 to a reasonable standard.

It later transpired that the lessor’s landlord’s insurer rejected the claim in respect of the house painting, on the basis that the property had not been in a good state of repair at the start of the previous tenancy, and that the damage reflected the poor construction and maintenance of the property rather than tenant damage.

Faced with a bill he had expected his landlord’s insurance policy to cover, the lessor refused to pay for the outstanding painter’s invoice, claiming he had never authorised the work, the cost was excessive, and that the agent and painter had colluded against him.

A partial payment of $1,920 was made by the property manager in January 2024. The painter pursued the balance of $14,380 in QCAT, naming the property manager and lessor as respondents to the claim.

Decision

The lessor originally maintained that he was unaware of the painting works at the property, but later conceded that he had intended for his landlord’s insurance policy to cover the cost of the painting. Member Paratz AM accepted the property manager's evidence that she had directly discussed the need to repaint the property with the lessor, communicated an estimated cost of $15,000–$16,000, and that the lessor had instructed her to proceed. Member Paratz also noted that the lessor's belief that his insurance policy would cover the painting costs necessarily implied prior knowledge that the works were being undertaken.

Under section 13 of Schedule 1B of the Queensland Building and Construction Commission Act 1991 (Qld) (QBCC Act), a domestic building contract for works exceeding $3,300 must be in writing, dated, and signed by both parties. At $16,300, with no written contract, the painting works did not comply with the QBCC Act. However, the absence of a written contract does not leave a tradesperson completely without remedy. Member Paratz applied the principle of ‘quantum meruit’ (grounded in the law of unjust enrichment), which states that when a party performs work in good faith, they should not be denied fair payment simply because the contract fails to comply with statutory formalities.

Assessing the fair and reasonable value of the work performed, Member Paratz awarded payment of the invoice to be made in full by the lessor.

Best practice advice for property managers

In this instance, the painting quote was communicated verbally from the painter to the property manager, and then verbally from the property manager to the lessor, and as such, QCAT was required to consider the evidence of both the property manager and lessor and make an assessment as to whose evidence was more credible. Whilst the evidence of the lessor on this occasion was not compelling, if written records of quotes, instructions, and authorisation were kept by the property manager, it is possible that the proceedings could have been avoided entirely. This claim was filed twice, heard over two days, and took almost three years to resolve. No out-of-pocket expenses were awarded to the property manager in defending the claim.

This decision is a timely reminder of how important it is for property managers to keep detailed written records of the scope of their instructions to arrange works at a property, to obtain written quotes from all contractors and/or tradespeople, and to keep detailed written records of a lessor’s authorisation of quotes before work commences.

The QBCC Act’s requirements^[1] for contractors to provide written contracts for building works exceeding $3,300 applies broadly to most works which would be completed on a residential property^[2]. Whether or not a contractor and/or tradesperson is well known to the property manager, it is crucial for property managers to obtain written quotes and contracts for works which exceed $3,300 before work commences in order to prevent any disputes.

Further, where landlord’s insurers are involved, property managers should ensure that any work being completed outside of the insurers’ authority should be communicated to the lessor, and the lessor should remain regularly updated of the insurers’ instructions and/or indemnity decisions in order to prevent later disputes surrounding works which may not be insured.

This dispute arose almost entirely because the lessor, and to some extent the property manager, assumed that an insurance payout would follow. The claim was ultimately denied, and the property manager was then tied up in litigation that consumed years of time and goodwill.

If works are being commissioned on the expectation that an insurance claim will succeed, property managers should clearly communicate in writing that the lessor may need to fund the works themselves if their insurance claim is rejected. If the lessor still wants to proceed, those instructions should be documented.

Read more about property management: The binding effect of a clerical error in a lease renewal.

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