Conflict between Selling Agents and Restricted Letting Agents has caused problems for agents, guests, owners and resident managers.  A clearer understanding of the rights and objectives of the parties involved can produce more satisfactory outcomes.

The changes introduced by the Property Agents and Motor Dealers Act 2000 do not resolve this issue for holiday rentals but do provide an improved basis for handling the issues involved.  

Owners of managed units have a right to sell their property at any time.  They will do this by appointing a selling agent.  The rights of the selling agent to inspect the property and the requirement of the letting agent to attract guests to generate income for the owner and the letting agent can become conflicting objectives.  Frequently, owners ignore the conflict and expect the two agents to complete their tasks independently.   

Under the Real Estate Agency Practice Code of Conduct in the PAMD Act, clause 37 requires the real estate agency (selling agent) to immediately give written notice of their appointment to sell to any agent (restricted letting agent) responsible for the management of the property.  This step is an important new requirement in that no inspection should be arranged until this written notice is received and the selling agent is identified.  Most owners as a courtesy will inform letting agents of their plans but at times this does not happen. 

Where the unit has permanent tenants, the position of inspections is addressed by the requirements of the Residential Tenancies Act 1994.  The Act requires the selling agent to provide to each of the letting agent and the tenant, a copy of the RTA Form 10 "Notice of Lessors Intention to Sell the Property" on receiving the listing.  The Act further requires a RTA Form 9 "Entry Notice" to be provided to the letting agent and the tenant for each inspection with a prospective buyer. 

This practice is law for permanent letting and both the letting agent and selling agent must be aware of and act in accordance of these requirements.  Failure to do so attracts a penalty of $1,500.00 if prosecuted under the Residential Tenancies Act 1994. 

The sale process for holiday units is quite different in that there is no process under any legislation to interrupt the holiday guest.  The holiday guest has the right to a holiday free of hassles of property inspections.  The letting agent, selling agent and owner must reach satisfactory arrangements regarding inspection times and possible sale. 

Conflicts often result from the following issues: 

• Demands by the selling agent for immediate access for inspections.
• Letting agents protecting the rights of holidaying guests to quiet enjoyment.  After all, most guests are on holiday because they need a break from hassles.
• Selling agents interfering in the letting process and seeking management of the property from the new owner.
• Letting agents restricting access to the property in an attempt to safeguard his letting business.
• The owner wanting to maximise rental income while expecting the selling agent to produce a buyer.
• Letting agents needing access to the potential buyer before a sale is finalised, to ensure that expectations of rental income and use of the property by the new owner are realistic.  Later disappointment for the owner usually comes from a purchase on emotion and invalid data rather than sound financial analysis.
• Selling agents failing to advise buyers of forward bookings, exposing the letting agent to possible litigation from guests with forward bookings.

Resolution of these issues requires a willingness of letting agent and selling agent to work together and recognise the rights of the four parties involved.  QRAMA recommends that the owner block out some time for the property to be free of holiday rentals so inspections can be planned.  If the owner wants to sell, he must expect to give up some letting income to achieve his main objective.  Frequently this requirement is not realised until the letting agent discusses the issues with the outgoing owner. 

Once an owner has decided to sell, it is usually beneficial to all parties if the letting agent provides assistance to facilitate the selling process.  After all, the owner is unlikely to make changes to the unit once they decide to sell.  The most positive outcome is for a new owner to join the letting pool as early as possible.  Hence the other objective is for the manager to develop a positive and helpful relationship with the new owner as early as possible, preferably during the buying process.

Holiday guests have made successful claims for compensation against letting agents because of their lack of pleasure and enjoyment resulting from interruptions for property inspections.  Letting agents must have their objectives clear and understand the rights of all parties. 

When the property for sale is occupied, at times it is sufficient to allow the prospective buyer to see a similar unit elsewhere in the building which may be vacant.  This inspection usually will determine if the property that is for sale meets the buyer's broad requirements and interest. 

The resident manager is in the "people business" and continually must balance the rights, requests and demands of owners, guests selling agents and others.  These skills are often tested when a property in the letting pool is being sold.  To simply say that the property is occupied by a holiday guest and therefore is not available for inspection is not enough.  Some solution must be offered.   

The guest has the right to uninterrupted use of the property and QRAMA supports this position.  At times a request to the guest, with sufficient notice and explanation (previous day), may allow an inspection to take place.  Such an arrangement is purely at the guest's discretion.   If an inspection takes place in these circumstances, a gift from the owner (through the selling agent) may be appropriate.  The gift may be flowers, wine or the cost of a pleasant lunch but some appreciation should be made of the guest's co-operation. 

Hence some planning is needed by the letting agent and the selling agent when a property is for sale.  Both parties must agree on a process for inspection requests. 

• The selling agent must provide written notice to the letting agent before any inspections take place. 
• The owner's requirements should be ascertained.  Does the owner want to block out times for inspections or confine inspections to change-over times. 
• The guest must be advised that he does not need to allow an inspection and requests should be restricted to exceptional circumstances.  If the request is granted, a suitable gift to the guest would be appropriate.

Some resident managers have reduced the problems by qualifying for a full real estate licence.  When more than 25 units are in the letting pool, this is usually a financially viable option.  The resident manager can then handle both the letting and selling and ensure that the future of his business is better protected by attracting investors who will use the letting pool.