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Ending property management agreements in WA

Discussion in 'Property Management' started by smallbuyer, 4th Jul, 2016.

  1. smallbuyer

    smallbuyer Well-Known Member

    Joined:
    25th Jun, 2015
    Posts:
    110
    Location:
    WA
    Hello,

    Curious about how the process goes with ending an agent management agreement. The standard agreement has an option saying if the contract expires then each party needs to give the other 28 days’ notice to end the agreement. However if notice is given before the end of the agreement is there any requirement to give a set period of notice or can you just say the management will end on the final day of the agreement? Could the agent be advised a few days or a week before the end of the management? I am concerned if I give an agent 28 days’ notice they won’t do anything for the last 28 days except collect commission.

    Cheers

    Smallbuyer
     
  2. thatbum

    thatbum Well-Known Member

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    Perth, WA
    I don't have a copy of the standard agreement in front of me, but it does cover this process. If you can link it to me or something I can explain.
     
  3. smallbuyer

    smallbuyer Well-Known Member

    Joined:
    25th Jun, 2015
    Posts:
    110
    Location:
    WA
    Hello,

    Sorry for the quality had to convert it from a pdf. This is the relevant parts in the standard WA agreement. My view is if you advise the agreement will end at the end of contact their is no requirement to give notice as long as you advise this in writing before the last day of the contract. Also liquidated damaged cant extend beyond the last day of the contract if the owner wrongfully terminates prior to the end of the contract. What do people think?
    Cheers


    This part is where you fill in your details, generally people choose agree
    At the conclusion of the Term the Lessor AGREES I Disagrees: (cross out whichever does not
    apply) to extend the Term until twenty-eight (28) days written notice of termination is given by either


    This part is in the contract conditions at the bottom
    This Agreement may be terminated by:

    the Lessor if the Property Manager falls to substantially perform Its obligations under this Agreement and such failure continues for twenty eight (28) days after written notice complaining of such failure is given by the Lessor to the Property Manager; or

    the Lessor without giving prior notice should the Property Manager have been guilty of a fundamental breach of the terms of this Agreement: or

    the Property Manager giving not less than twenty eight (28) days notice In writing to the Lessor.

    In the eventthatthis Agreement iswrongfullyterminated by the Lessor during the Term, the Lessor will pay to the Agent as and byway of liquidated damages a sum equivalent to 50% of the Management Fee which

    which would otherwise be payable to the Property Manager for the unexpired period of the Term. The Lessor agrees that payment of the liquidated damages in this clause is a fair and reasonable pre-estimate of the

    the damages likely to be sustained by the Property Manager If this Agreement Is terminated prior to the expiry of the Term and reflects the real loss or damage likely to be suffered by the Property Manager.

    The Real Estate Institute of Western Australia (Inc) considers that the liquidated damages rate of 50% referred to in sub-clause 3.2 above provides an accurate calculation of the actual damages that would usually be suffered if an agreement is terminated In a manner that attracts liquidated damages.
     
  4. thatbum

    thatbum Well-Known Member

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    Perth, WA
    What did you choose?

    It looks like you're missing some of this clause when typing it back out btw.

    From the wording so far, it looks like you're still stuck for another 29 days at least after the end of the management term.
     
  5. mik

    mik Member

    Joined:
    3rd Jul, 2015
    Posts:
    7
    Location:
    WA
    This is a good lesson for you since it shows that you were happy to sign a document that heavily favours the agent and does not protect you as the owner.
    I (as an owner) always delete the section relating to paying an agent damages and I also replace the 28 days notice period with 7 days. I've never had an agent object to these changes.
     
  6. smallbuyer

    smallbuyer Well-Known Member

    Joined:
    25th Jun, 2015
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    Location:
    WA
    Chose Agree so the management keeps running at the end of the agreement if it isn't cancelled before hand.

    Most managements i have dont have any penalties which is definitely the way to go.

    If the management was terminated effective immediately say a week before the end of the agreement would only a week of penalties be due?
     
  7. thatbum

    thatbum Well-Known Member

    Joined:
    18th Jun, 2015
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    Location:
    Perth, WA
    Its arguable on the wording, but its also arguable that the PM would be entitled the penalties for the full notice period.

    Overall though, I don't know why you just don't talk to your agency and work something out.