this presentation

Managing the growing risk in
Property Management
Andrew Cox - PropertySafe
Session Goals
 Strategies and benefits
 Outcomes & Solutions - Re-gaining control
 Current State of play
 New Expectations
 How systems & processes can protect you
Strategies & Benefits - deliverables
Protect your business from legal damages claims resulting
Injuries to Tenants &
Management of maintenance tasks
Increase rent roll value (your superannuation)
Protect your Agency in a highly litigious “grey area”
Automate processes and create true audit trails
Save you time & cost managing maintenance
Why are we here? - Understand and accept that things are out of control
1 in 10
1 in 2,000
Property Management Realities
Deaths / Injuries are too common
6 week period 2014 – NSW only
16/3/2014 – Mother and 3 mth old baby fall from balcony at Central Coast –
balcony barrier broke, baby died
14/3/2014 – 6 yr old girl had nearly drowned at Winston Hills
9/3/2014 – 17 mth old baby boy strangled on blind cords near Kempsey
4/2/2014 – 15 mth old baby girl strangled on blind cords at Quakers Hill
30/1/2014 – 16 mth old baby girl strangled on blind cords at Hornsby.
ALL preventable.
Property Inspections – Greater demands on PM’s
Was… just ensuring that the property is clean etc.
But now… a responsibility to ensure a safe
environment exists.
Balconies, decks, pools, glass, smoke etc
Legal Clarification – Duty of care to the tenant
There is NO DOUBT that your Duty of Care to the
Tenant has been established.
(Wu v Carter) found that real estate agents also owed
a duty of care to warn the tenant and/or the landlord
of any dangerous defects in the premises of which it
was, or ought to have been, aware.
ClarkeKann Lawyers review article - Property Agents: Are you aware of the extent of your duty to tenants?
Position Statement
November 2014
Property managers are well trained and provide a high-quality service
within their specific area of competency.
In general, however, they do not possess any specific building skills or
the like that enable them to form an opinion that could, or should, be relied
upon by interested parties in relation to safety standard compliance and risk
Not meeting safety standard compliance requirements can have
serious consequences for tenants, landlords and property managers.
Position Statement
The REIQ recognises the growing pressure on property managers to meet
legislative requirements relating to the condition of rental properties and managing
the sometimes competing demands of lessors and tenants in relation to such
If repair and maintenance issues are not properly monitored and managed by
property managers, this can trigger mismanagement claims by landlords.
Claims of this nature can be expensive, time consuming and can cause extensive
damage to the reputation of an agency. In extreme cases, a legal claim may lead
to the demise of an agency and the loss of personal assets.
Why the Change?
Fundamentally, this change has been driven through the Courts.
They, in turn, have been reacting to:
1. Growing social pressures to protect tenants – social groups +
2. Increasing reported incidents of personal injury – media focus;
3. Coroner’s recommendations;
4. The significant growth in commission focused
legal firms.
1. The indemnity will protect me!
• Hunt v RTA NSW [2010]
• O’Rourke v Johnston [2009]
2. If I don’t know, I can’t be held responsible!
• Gration v C Gillan Investments Pty Ltd [2005]
• Wu Vs Carter [2009]
3. It won’t happen to me!
• 1 in 10 agents get claims every year
Ramifications of claims for Agents
 Significant risk exposure
 Lost time / money fighting claims
 Damaged Agency & Brand reputations
 PI Insurance will substantially increase
 Rent roll maybe devalued
 PI cover is inadequate – businesses are at risk.
The desired result – risk reduction & transferral
Avg. 350 properties
Avg. $2M PI Portfolio Cover
Avg. $20M PL Cover
Regaining Control
Accept that you cannot control
everything now, BUT control what
you can.
Transitional Challenges – Claims against Agents
Pre 2002
LOW CLAIMS (1 in 2,000)
• 2006
Smoke Alarms Mandated
• 2008
Wu vs Carter
• 2009
Hunt Vs RTA
• 2012
Diefenbach Coroners Report
• 2013
Robinson Coroners Report
• 2014
Blind Cords, Pool, Window Openings
2018 - 2020 - est. Legalisation
1 in 10
1 in 7.5
LOW CLAIMS (1 in 2,000)
So what is the SOLUTION?
Achieved via a 2 stage process:
1. Identify and manage safety hazards, and
2. Adopt workflow systems & processes that
control and reverse the risk.
1. Hazard identification in rented properties
Julian Sexton – Senior Counsel – Opinion
Recommend safety inspections with the
appropriate skilled people (immediate risk reduction)
Document the Landlord’s response
Advise any issues if inspected
Remind / follow-up, and
Create accurate audit trails
And it's simple…… Each step you take reduces your exposure
Step 1 - Outsource your Risk
• Recommend a suitably skilled and qualified
inspection service
Step 2 - Inspect or follow-up
• Organise the inspection or remind the
Landlord of the necessity.
Step 3 – Inform the Landlord
• Ensure the information from the inspection
is supplied to the Landlord
Step 4 - Remind
• Ensure that you remind the Landlord of any
outstanding issues
© Copyright August 2013
Key tips for dealing with Landlord
Let the Landlord know you are not a building expert, don’t
be afraid to say it !
Educate Landlords about the importance of Tenant safety &
about their existing liabilities
Recommend a trusted service….nicely, be firm but fully
accept that it their right to decline
Carefully document the decline or non-response
Ensure any maintenance request is made in writing with a
documented response, date and time.
Key tips for dealing with Trades Suppliers
Respect and appreciate your Trades but you are the client,
ensure you are in control
Ensure that all jobs are scheduled with all informed
Get a photo of the completed work
Get the tenants to verify a satisfactory job is done
Trades supplier verification is critical Insurance/license)
Outsourced Inspection & Report options
A complete risk identification
and mitigation system,
focused on risks associated
with Health and Safety within
Residential Properties.
Safety reports need to cover more areas
Compliance legislation, the most litigious risk items and the highest injury areas related
to properties.
Smoke Alarms & Fire Safety Items
Pool Fencing & Gates
Electrical Hazards
Fireplaces & Fixed Heaters
Gas Leakage
Tree Hazards
Hot Water Hazards
Internal Stairs & Balustrades
External Balconies, Decks & Stairs
Window Height Hazards
Glass Doors & Panels
Safety Switch
Slip & Trip Hazards
Moisture & Mould
Curtain & Blind Cord Hazards
Other General Risk Areas
2. Systemisation & Documentation (60% of claims)
Implement an automated workflow
system to ensure nothing is missed
Automate communication & reminders
Have a detailed event log ….just in case!
Current PM world
• No time
• Stressed
• Thankless
• Unrelenting
Desired PM world, here now
Ideally adopt a system that;
• Free’s up your time
• Provides greater control
• Is integrated
• Is Mobile
Work flow system essentials
Should be your Personal Assistant
 Available 24/7 on all devices
 Works for you when you aren’t even there!
 Provides significant time & $$$ savings
 Eliminate Risk & errors
 Automate communications & reminders
 Works with trusts, integrated with Apps
 Accurate and complete reporting & audit trails.
Real time Dashboards & Reporting ?
Capture & manage all jobs on one live screen ?
Smart Technology
with full integration ?
Create audit
for Tribunal or
Insurer in
8 seconds ?
Key Takeaways
 The environment has changed, agencies are exposed
 PM’s cannot meet the expectations themselves
 Doing nothing is not an option
 The 2 step solution is to CONTROL what you can, by:-
1. Recommending a suitable service
2. Ensuring you have the best systems & processes
 Adapt, grow and prosper.
Thank You.
eg. Procrastinating
eg. Training staff
Eg. No reason calls

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