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REIQ Journal : September 2008
38 PROPERTY MANAGEMENT of insurance policies for tradespeople and contractors on file and implement reminders in their follow-up systems to ensure they are renewed. In the situation where a lessor wishes to carry out their own maintenance, or have it dealt with by an unknown third party (such as Uncle Charlie down the road), property managers should inform the lessor of their concern and recommend that the lessor does not carry out their own maintenance. They should also recommend that the lessor seeks their own legal advice regarding this practice and contact their own public liability insurance provider. The lessor will require coverage in the event of an incident at the rental property while the lessor is there, or an event that occurs as a result of the lessor carrying out certain works. The property manger should ensure that this conversation is recorded in writing, and that the lessor receives a written version of the conversation. File this written record with the management agreement. In addition, the property manager should not prepare a work order for any third party the lessor chooses to appoint (such as Uncle Charlie) unless they are satisfied that the third party meets the three-step criteria listed previously. Once again, confirm your concerns in writing to the lessor, and pass the burden of risk and concern back to them. Property managers should also ensure that all lessors have a public liability policy to a minimum value of $10 million. Refer to term 4.16.1 of the REIQ Terms and Conditions annexed to the PAMD form 20a. Most licensees have the adage of “no insurance, no management” which is a sound risk management practice. REIQ Journal September 2008 Best practice system five: Conducting regular inspections and maintaining accurate records Property managers should ensure they have systems in place to carry out regular routine (periodic) inspections. As a minimum, Carter Newell recommends that inspections are carried out at least once during a sixmonth period. This is in line with the agent’s contractual obligation with the lessor according to term 8.10 of the REIQ Terms and Conditions annexed to the PAMD form 20a. The recent forum discussed the importance of carrying out visual inspections of properties, in line with term 7.7 of the REIQ Terms and Conditions annexed to the PAMD form 20a, which states that “the agent is not a licensed engineer, architect, builder or any other type of professional or tradesperson, and is only responsible to report to the lessor on matters that are readily apparent on a visual inspection…” Conclusion The forums were well-attended and group discussions were robust. Feedback indicated that the sessions were of great value to property managers, who are sometimes placed in difficult positions when dealing with property maintenance issues. In summary, prudent professional property managers should ensure that file notes of ALL conversations with tenants, lessors and third parties are recorded according