Policy: Owners Renting Another Managed Property

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. This policy has been created in line with our guiding principle that all long-term partnerships have a solid foundation of mutual respect, mutual reward, mutual investment, and mutual risk.

Document Purpose:

The purpose of this document is to clearly communicate Property Providers’ policy for owners, with active properties under management, to rent other properties under Property Providers’ management and use rental income earned to pay for these stays/rentals.

Background:

As Sydney’s most flexible residential rental agency, we want our owners, their friends and families to use flexible rental options for their benefit. Some examples include when an owner’s property may not be available for personal use due to guest bookings, maintenance or other circumstances; owners may wish to rent elsewhere to visit another part of Sydney; rent another property to accommodate friends and family; or to stay elsewhere to vacate their own property and capitalise on rental opportunities. This policy provides clear guidelines to ensure transparency and fairness while safeguarding the interests of all parties involved.

Policy Objectives:

To be clear, consistent, reasonable and fair.
To support our fiduciary responsibility and duty of care to all property owners, guests and tenants.
To minimize both reputational and financial risk for all parties.
To manage expectations, and minimise confusion and potential conflict.
To maintain the scope of the Agency’s authority.

Agency Policy:

Owners renting properties, which are not their own, for their own or their guests’ usage do so using realised funds held in trust within their account ledger or with payments received into our trust account based this criteria:

Standard Business Practices:

All booking or rental requests made under this policy must be proposed and agreed to in writing.
Owners renting properties do so under the terms and conditions of the applicable rental agreement, being either the Property Providers short-term rental terms and conditions, or the agreed lease terms, whatever is the applicable contract under which the rental applies.
All owner bookings for alternative properties using monies held in the Agency’s trust account from rental income must be presented, reviewed, and approved in writing by the Agency Principal before a booking or lease can be under this policy.
Each rental period is to be treated independently under separate agreements and are independent transactions of one another. For example, a booking in an owner property cannot be contingent on a booking in an alternative property or a guest booking being realised or whether a booking is not approved by the alternative property owner.
The owner booking is considered confirmed only once payments have been received in our trust account according to the applicable rental agreement.
Property Providers reserves the right to decline an owner booking / rental request in an alternative property if it conflicts with operational needs, disrupts other guest reservations or tenancies, or if it violates this policy; or if the booking is not approved by the alternative property owner.
Last min bookings or changes with under 7 working days from request to arrival or to extended period unfortunately cannot be considered if monies are being paid from the owner’s trust ledger.
All agency guest and owner policies and conditions apply including, but not limited to, guest cancellation policy as shown in the short-term rental terms and conditions, owner cancellation policy and anti-money laundering policies.

Payments & Financials

Owners must pay for the refundable security deposit, booking fee and booking deposit and any applicable credit card fees via their credit card before entering the property.
There must be adequate realized rent (net rental income) from the owner property ledger is required to cover the entire booking/rental under the rental terms of the alternative booked property. If funds held in the owner’s trust ledger are less than the total amount owing, the balance is to be paid in full by an alternative payment method such as a credit card or bank transfer and settled in our trust account by the due date as defined by the booking payment terms and rental agreement. All booking / rental transaction costs, including credit card fees (where applicable), are the owner’s cost.
Payments for the booking cannot be made using unrealised funds from future or in-progress (in-house) bookings. For the avoidance of doubt: net rental income is only disbursed into the owner’s ledger at the end of the month per the managing agency agreement terms. Net rental income is only disclosed to owners once end-of-month processing has been finalised and income has been disbursed into the owner’s ledger and the final monthly statement generated. Special disbursements will not be considered if this policy is in place. Under no circumstance can the agency appropriate money held for an owner’s forward bookings for a current stay in another property.
A trust account transfer administration fee of 5% of the total gross booking value of the owner’s stay or lease, or a minimum of $500 + GST, whatever is greater, will apply to all agreed funds transfers under this policy.
Cancellations or amendments to owner bookings or leases in alternative properties under this policy will follow the usual cancellation terms of this booking or the break lease conditions. All applicable tariff changes, amendments and/or cancellation costs unless otherwise agreed by the agency and any other impacted party in writing, will apply. This includes where stays are cut short, modified or cancelled before or after check-in/arrival.
Where payment is not received, for short-term bookings, the agency reserves the right to charge $50 per day or 5% interest compounded monthly (whichever is greater) until the funds are transacted/recovered or cancel the owner’s booking for lack of payment. Any funds not paid under the lease will revert to the terms of the lease.
In any significant circumstances where a booking is impacted by issues outside of the agency or owner’s control such as Acts of God or force majeure events such as natural disasters; a property becomes uninhabitable or requires urgent repairs or remediation in circumstances that threaten the guest/tenant’s health and safety; Government travel restriction; or where house rules are broken or at serious risk of breaking house rules (e.g events or parties, malicious damage ); payments not being made; or change in ownership, and the terms of this policy, booking or lease are frustrated or at risk, the agency reserves the right to hold all monies in trust and charge the owner’s credit card for any outstanding balance of the alternative property booking/rent or the owner may resolve the balance payment with a confirmation of direct deposit transfer of the balance within 24 hours of being notified of this event. For the avoidance of doubt, a cancellation in the Owner’s property does not automatically enable the owner to cancel their own stay or lease; usual cancellation terms apply for each instance.

Operational Mechanics:

The owner or agency personnel submits a written proposal or request to Senior Management for review/approval.
The Agency Principal will review the request and financials to ensure that the request adheres to this policy. If it does not, adjustments or recommendations may be put forth by the agency to the owner for their review and agreement in writing.
If approved a special case will be created with clear instructions to the trust accountant who will execute the transactions.
The owner’s booking /lease will be processed within our system, and they will receive the applicable correspondence, confirmations and instructions supplied to other guests/tenants.
On or before the date of payment, the owners’ trust account ledger will be debited accordingly, and this will appear on their rental statement.
All credit card information will be held securely in our PCI DSS-compliant software.
The owner will be treated the same as a guest or tenant and, although you as our client will be a high priority, our team will follow our usual processes and procedures.
Upon exit, the owner’s security deposit/bond will be refunded within 7 working days or appropriate charges applied if applicable.

Rationale:

This policy has been drafted after reviewing several use cases over years of operation. Property Providers feels that this policy aligns not only our core purpose of Helping People Live Better, our values (Passion, Performance and Partnership) as well as all our agency processes, procedures, and policies. We hope this clear framework benefits not all our partner clients.

Effective Date: This policy was last updated in July 2024