Owner Policy: Advance Rental Payments & Disbursements

Company Position:

Property Providers’ vision is to “Help People Live Better” by being Sydney’s most flexible residential rental company. This vision is driven by three core values: Passion, Performance and Partnership. Importantly, we seek profit not through dollars and cents but through the pursuit of our guiding principle that all meaningful long-term partnerships have a strong foundation of mutual investment, respect, risk and commitment. We aim to create these virtues in all our relationships and touch points with long-term leasing tenants, short-term rental guests, employees, suppliers, partners, and our property owner partners.

Purpose:

To establish a clear and consistent policy for the advance remittance of rental income to property owners managed by Property Providers.

Background:

Property Providers manages both short-term and long-term rental properties.  As a result of working with affluent clientele it is not unusual for large amounts of rent maybe paid in advance by guests/tenants.  There are countless reasons why guests/tenants may pay elect or offer to pay upfront (i.e. to simply secure the property, negotiate a deduction, harness currency fluctuations, minimize tax, advanced accounts payable processes in large organisations may make it easier to pay 1 invoice vs 10 etc).   Naturally in these cases our owner partners may request advance remittance of rental income to meet their financial needs or may expect the funds to flow to them in advance as well.  Although this may seem straight forward there are complexities in relation to these requests that also need to be effectively managed in advance to ensure a harmonious relationship between all three parties involved in the transaction: the tenant/guest/, the Owner/Partner and the Agency.

Objectives:

To adhere to NSW trust accounting regulations and compliance in relation real estate transactions.
To fulfill the agency’s fiduciary duty to property owners, tenants, and other stakeholders by ensuring responsible financial management of rental income and expenses.
To support owner/partner’s cash flow needs and provide flexibility where it can be clearly and effectively managed.
To protect guests/tenants’ exposure to risk which is outside of the owners/agency’s circle of control and influence.
To support and the agency’s financial integrity and brand.

Policy

Where there is a stable long-term lease in place, Property Providers’ will remit rent up to 1 month in advance which is aligned with industry standard, legislation, and our management agreement.
Where there is a variable and more flexible short-term rental in place, Property Providers’ will remit one month in arears (pro-rated) as we need to remit on what has happened in reality verses what we may forecast or “think” will happen.
Generally, the agency not able to remit additional time/rent in advance.  In extenuating circumstances, the owner is welcome to submit a written proposal to the agency for careful considered and reviewed by senior management.
When/where advanced payments are approved agency’s property management commission will increase by ¼ of the amount on the signed management agreement. 
Any approved request will require the owner to indemnify the agency against all existing and future liability as it relates to guest/tenant who the rent has been paid for. Any unforeseen issue (i.e. compensation because of acts of God for example) will be directly managed by the owner with the guest/tenant.

Mechanics:

Special advance payments requests must be made in writing and strong supporting rationale as to why the agency and guest/tenant should approve an advance rental payment.
The request will be reviewed internally, and the owner/partner will be advised as senior managements position in relation to the request.
Any approved request will require the owner to indemnify the agency against all existing and future liability as it relates to guest/tenant who the rent has been paid for. Any unforeseen issue (i.e. compensation as a result of acts of God for example) will be directly managed by the owner with the guest/tenant.
Any advanced rental payment to an owner will require an additional signed agreement which indemnifies the agency of any/all actual and contingent liability in relation to the relevant guest, tenant and property. This indemnity will encompass all liability (not only financial or rent but also Labor costs at the agency rate card to manage any rent disputes).  The agency will also require a current and valid credit card as security prior to releasing the rental funds to the owner/partner.

Rationale:

Irrespective if the agreement is under a Long-Term Lease or a Short-Term Rental Agreement all funds are held and transacted securely through a registered and quarterly audited Australian Trust Account.  As a result, it should be clear that no party involved in the transaction is making money from these funds as they are held in trust for a very good reason which clearly is adequately protect all parties involved.
Our policy has been created to manage risk effectively and proactively.   Good intentions do not replace poor judgment.  Unpredictable things happen which can have traumatic effects on the validity of a rental agreement and therefore the rental value of a property.  Residual and ripple effects from Acts of God, Construction/Renovations, Undesirable Neighbours, Family Law Disputes and Personality Conflicts can be significant and should not be underestimated.  In most cases, these considerations are out of the agency’s circle of influence and control.
Any exemption or exception to this policy, needs to be exclusively at the owners/partner’s risk.

Review and Amendments: This policy will be reviewed regularly and updated as necessary to ensure compliance with relevant regulations and best practices.

Effective Date: This policy is effective as of January 1^st 2025