If the client (landlord) or customer (tenant) suffers a financial loss, property damage or injury they could take action against your agency $$$.

The client is paying you a management fee for a professional service, which is no different to the responsibilities of a lawyer, accountant or doctor. You are expected to know the law and reduce their potential risk during the management process.

If a tenant fails to pay rent and damages the property and the landlord is out of pocket financially… can you prove that you undertook all necessary steps to mitigate (reduce) their loss?

If a claim is made against your agency for rent loss or property damage the following internal processes will be looked at:

(This is a summary of the main areas and does not cover everything that may be looked at)

1. New management process – did you make the landlord aware of landlord protection insurance to reduce their potential financial risk?

2. Tenant application process – what written evidence do you have regarding their references. What did the referrers say about the tenant? Was the application completed in full? Did you conduct a tenant database check? Did you take the bond upfront prior to the tenant moving in? Was the landlord part of the application acceptance process?

3. Conversation notes – Do you have a record of all conversations that have taken place between the landlord and tenant? It doesn't matter how trivial you think the telephone conversation was. The more notes that are taken will reflect the amount of contact you have had with them.

4. Email records – Do you have a record of all emails that have been sent to and from the landlord and tenant?

5. Internal processes – Do you have a document trail highlighting that your department adheres to systems. It is often that one checklist that you were too busy to complete or finalise that will be the one that turns into a liability claim.

6. Issuing of notices – Do you issue the appropriate notice for a breach of the tenancy (particularly rent arrears) on the day that it can be issued? Failing to issue a Notice to Vacate or Termination Notice within the correct time frame can lead to a greater rent loss for the landlord.

7. Routine inspection process – Do you utilise a system for ensuring that all properties are inspected. That one property that you could not access on the inspection day… that then slipped through the follow up process could be the one that results in an injury claim or excessive property damage that went un-noticed. Do you send detailed reports to the landlord?

8. Maintenance process – Do you utilise a system for tracking all maintenance – tenant requests, quotes and invoicing? Do you follow up maintenance issues from your routine inspections? Do you ensure that the landlord is aware of all pending maintenance? Do you keep detailed records of all conversations about maintenance work?

DON'T CUT CORNERS – YOU MIGHT GET CAUGHT… WHEN YOU FIND YOURSELF IN COURT