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REIQ Journal : October 2008
Property Management 41 Routine inspections and best practice By Stacey Holt, Senior Best Practice and Policy Advisor, REIQ Most real estate and letting agencies conduct routine (periodic) inspections on behalf of their lessor client every three to four months but there is no legislation specifically regarding these inspections. Of course, sound risk management and best practice suggest a prudent agent would complete routine inspections on a regular basis and report the findings to the lessor in writing. DESPITE THE LACK OF specific legislation in this area, property managers must remember that there are numerous sections in statute law that indirectly deal with this obligation. For example, agents must “act in their client’s best interest” and “act with skill, care and diligence”. Common law duty also imposes a fiduciary (position of trust) obligation on agents, as it is reasonable to expect that property managers are experts in their field and will be trusted by their lessor clients. Users of the REIQ Schedule to the PAMD Form 20a, should be mindful of the contractual obligation to the lessor. Term 8.10 states in part that unless otherwise agreed and expressed within the schedule, the agent will inspect the property at least once during a six-month period. Planning for routine inspections Regardless of the size and structure of a rent roll, most real estate agencies have similar practices when carrying out routine inspections. Most agencies break their rent roll into batches according to geographic location – rather than according to tenant – to carry out inspections. When a new tenancy commences, the property is batched into the next run for a location and the inspection is carried out according to when the due date for that location falls. Few property managers conduct inspections by tenant, as it would not be uncommon to have to drive longer distances across town to complete a batch for the day. If your agency is currently batching property inspections by tenant, reconsider the practice in the interests of time management and business efficiency. REIQ Journal October 2008