Ready to break up with your agent and terminate your management agreement? Here's how..
The good news is we offer a switch from your agent kit which you can download for free from the RentBetter website, but we wanted to go through this in more detail in this article.
The steps below assume you already have an existing arrangement with an organisation or a property management company. They might be the agency that sold you the property in the first place or someone else you’ve been working with to manage the property.
In the break up is to ‘understand the agreement’ you have in place. Typically in that agreement you’ll find a ‘termination clause’ which will outline the timeframes required to end the agreement also known as a notice period. It is quite common for us to see a 28 day (4 week) period, but sometimes you’ll find it is longer or based on another specific and agreed event.
This means if you plan to terminate the agreement, you would give this amount of time as notice. Firstly this provides a courtesy to the existing agency to let them know there will be a change and adjust accordingly, and also it gives you time to review the necessary documents and prepare your tenants for the time when you take over.
Is to either ‘send a formal letter’ or email to your agent with a written formal notice of the end of the arrangement. As a courtesy it might also be nice to follow-up with a phone call to confirm receipt, but this depends on your situation and comfort making the call. Typically the letter includes your name and contact details, the address of the property and the end date.
You can take advantage of the standard template included as part of the switch from your agent kit and download a copy for your own use.
Is to ‘request the relevant documents’ relating to your property and current lease. From the moment you issue the termination of the agreement until you receive the keys and formally take over, you are really in a position where you are managing that the documents/artefacts that you have requested, as well as the property are returned in an acceptable way.
You’ll want to take the time to review the documents and ensure everything makes sense prior to the handover date.
The things to ask for are fairly straightforward, but it can be a bit tricky so it is worth asking for the information early. Ask for a copy of the current lease agreement, condition report (entry, and interim reports), the keys and inventory of the keys, tenant ledger, report on maintenance and expenses and transfer of the bond over to the landlord.
We often hear from our customers that because there is often a disconnect between a back office finance or book keeper at the agency and the property manager you deal with, might mean the information you’re getting from the person in the front office or on the ground is a bit different or not totally transparent given someone in the back office was handling the financials and money.
It could be that it’s an old lease with years of payments, or something else involved, but it’s worth spending a few minutes checking that it all makes sense before the handover. At the end of the handover period their willingness to review the ledger and documents will be limited and having a record of when an event occurred or an amount spent on a repair is important to make this a clean break.
When switching from the agency, the transfer of the bond will happen with the local regulator or authority which is where the bond is registered. The account where the bond sits prior to the handover is with the agent, and there is then a process where the agent will transfer the bond account over to you as the landlord. So now the same bond will be held in the landlord’s account.
It should be pretty straightforward, but sometimes the administrative process is delayed, and it’s worth clarifying when the agent plans to do this. Basically just switching over an account
The final step is to ‘communicate the change to your tenant’. Let your tenant know the specific date on which the change will occur and which payment will be the switchover. Right after the last payment you would want to get in contact with the tenant to let them know the change will occur from the next payment period to avoid them paying their payment to the wrong place
So in conclusion, you’ll review your agreement, send your termination letter, and then request and review the relevant artefacts. The goal is to take over the management, so although the steps are not rocket science, it’s worth having a guide while you’re doing it.
If you’re using the RentBetter platform to do this, head to RentBetter.com.au and log in. On the my properties page you can click on the lease set-up button to set up your tenant and send them an invitation.
You’re welcome to get in touch with any questions or if you need any help as you’re going through the process.
If you’re like most Australian investors, a good percentage of your wealth and savings are connected to an investment property. Having a property manager you’re not happy with is not quite the same as accepting a bad meal at a restaurant or a bad fare in a taxi or uber.
It is your investment being managed by someone you either don’t trust, don’t like, or are not satisfied with the level of service you’re receiving. Some concrete actions when you’re considering a change:
No! While some management agreements might have longer durations or a termination clause with specific requirements, there is no penalty or fee required to move away from a property manager
When you’re ready to make the switch, you’ll find the RentBetter Platform offers a broad range of tools and technology to help you through the process. Whether you’re searching for a new tenant or you want to set-up a tenancy, or you already have a tenant in your property, the RentBetter Platform can help you through the process.
We typically look at managing a property as a lifecycle with many entry points rather than a single linear process. You can read more about the 5 steps for self-managing your property or register for a demo to check it out yourself