Unit owners at the Rocks Resort at Currumbin Beach signed PAMDA forms 20a that duly authorised the managing agents to charge them for expenses incurred in relation to third party services.
These included general cleaning, Foxtel and window cleaning.
Although contractors performed end-of-stay tenancy cleaning for a fixed fee, the managers were – for example – called on to personally augment such services by conducting inspections, rectifying sub-standard work and addressing holiday makers’ ad hoc cleanliness concerns.
And in relation to Foxtel, the obligation of agent Peterson Management Services P/L was to test that the system was working before each new let, attend to tenants’ serviceability callouts and helping inexperienced users operate the technology.
Mr Peterson for the company swore that “if we had to reset a Foxtel box we might have to go back to a unit 3 times in one day”.
For these overheads, a mark-up was contained within the total ‘expense’ figure for each of the services specified in the form 20a and charged to the owners.
In relation to Foxtel, the additional charge was $29 per unit per month and in relation to cleaning, about $34 per clean.
The practice came to the attention of the Office of The Trading who breached the agent, claiming a contravention of the PAMDA s 141.
That section – like its POA s 90 counterpart – prohibits the recovery by an agent of more than the expense for the performance of an activity, “actually expended”.
But in the judgment of Queensland Civil and Administrative Tribunal (QCAT) member David Paratz, the company was entitled to charge the mark-up for the “service” contained in the PAMDA 20a appointment.
As the “service” supplied could not be classified exclusively as either an ‘expense’ or a ‘reward’ – because “it includes components of both” – the agent was entitled, he ruled, to charge a price for the service supplied that included both.
The OFT’s prosecution on those points failed.
Note however that POA s 90 now defines – in relation to ‘expenses’ – the term “actually expended” as excluding any component of agent “benefit”. This would appear to prevent agents from adopting similar practice in respect of appointments entered into under the POA.
Also of interest to the OFT was the managing agent’s practice of charging its 12% commission on gross holiday rents inclusive of an online booking agency’s own 10% take.
Judge Paratz ruled such practice was not prohibited under PAMDA because the appointment of Wotif was authorised by the unit owners; and it acted as the managing agent’s agent.
Thus the “amount collected” on which commission could be charged should be the gross sum collected by Wotif.
He sounded a caution that POA s 88 now provides the commission must be worked out on “the actual amount of rent collected” rather than the “amount collected”.
Given his conclusions as to the effect of Wotif’s ‘agency’ relationship, it is by no means clear that the new POA wording brings about any different result that occurred in relation to the Currumbin resort under PAMDA.