Exclusive Managing Agency Agreement NSW: What You Need to Know

If you`re a property owner in New South Wales (NSW) and looking to rent out your property, you may have heard of exclusive managing agency agreements. But what exactly are they and how do they work?

An exclusive managing agency agreement is a legally binding contract between a property owner (the principal) and a licensed real estate agent (the managing agent). It entrusts the managing agent with the responsibility of managing the day-to-day operations of the property, including finding and screening tenants, collecting rent, and carrying out repairs and maintenance.

But what makes this agreement “exclusive”? It means that the principal cannot engage any other managing agent or rent out the property themselves during the term of the agreement. This gives the managing agent sole responsibility for the property and ensures that they`re motivated to work hard to secure the best possible tenants and rental income for the principal.

Now, let`s delve deeper into some of the key features of an exclusive managing agency agreement in NSW:

Term of the Agreement

The term of the agreement is the length of time that the principal agrees to engage the managing agent`s services. The term is usually between six months and two years, but can be longer or shorter depending on the agreement reached between the parties.

Commission and Fees

The managing agent`s commission is the fee that they charge for their services. The commission is usually a percentage of the rent collected, but can also be a fixed amount or a combination of both. The commission rate can vary, but is typically between 5% and 10% of the rent collected.

In addition to the commission, the managing agent may charge other fees, such as a letting fee, lease renewal fee, or maintenance fee. It`s important to clarify all fees and charges in the agreement to avoid any surprises down the track.

Responsibilities of the Managing Agent

The exclusive managing agency agreement outlines the managing agent`s responsibilities, which can include:

– Finding and screening tenants

– Collecting rent and bond payments

– Preparing and executing lease agreements

– Carrying out routine inspections

– Arranging repairs and maintenance

– Handling disputes and complaints from tenants

– Preparing regular financial statements for the principal

It`s important to note that while the managing agent is responsible for the day-to-day operations of the property, the principal remains the ultimate decision maker.

Termination of the Agreement

The exclusive managing agency agreement can be terminated by either party, but usually requires written notice. The agreement can also be terminated if either party breaches its terms or if the managing agent`s license is suspended or cancelled.

Conclusion

An exclusive managing agency agreement is a valuable tool for property owners looking to rent out their property in NSW. It provides peace of mind by entrusting the management of the property to a licensed professional, while ensuring that the principal remains in control.

If you`re considering engaging a managing agent to manage your property, it`s important to choose a licensed and reputable agent who has experience in managing similar properties in your area. And as always, carefully review and understand the terms of any agreement before signing on the dotted line.