25 Sep 2025
Words Michael Young Informer

Don't Let It Slide

If your letting schedule draws inspiration from ARAMA’s letting schedule, or has had one or more experienced eyes cast over it, then you more than likely have a clause along these lines:

“ … once per year, on reasonable notice, the letting agent may increase their fees and/or charges, other than the commission rate, by a maximum of either [insert your lucky number here]% or CPI, whichever is greater.”

The general purpose of that clause is to ensure the letting agent can increase their fees and charges, which have become more costly year on year, so that you are:

(a) not out of pocket generally; and/or

(b) making slightly more for work you perform, to account for CPI increases.

In short, this cost escalation clause is aimed at preventing the erosion of your letting income.

The Road to Hell is Paved with Good Intentions

In the past few years, I’ve all too often been asked by clients, “What can I do to pass on these exorbitant/increasing costs? They’ve gone up 25% in the last three years alone!”

When I ask my clients if they’ve been increasing their own fees and charges annually, their answer is unfortunately an all too sheepish, “I’ve never done that.

My owners are all so nice, and I wanted to keep them happy. So, I kept prices for everything the same.”

If this sounds like you, then you need to change your mindset, quickly. Think of it as being appropriately compensated for the hard work you put in, day in, day out.

By not increasing your fees and charges appropriately each year when the option is available to you, you’re effectively eating away at your commission and (potentially, significantly) reducing your net income.

Gently Does It

If you haven’t increased your fees and charges in some time, it’s usually not advisable to increase fees by leaps and bounds to make up for those missed years unless you’ve got a spectacular relationship with your letting pool owners.

Big changes tend to spook even the most stoic investors. Rather, consistent and gradual increases are usually the way to go.

If you have an option of, say, between 5% and CPI, but CPI is sitting at 4%, maybe see how 4.5% (or 5% if you’ve got a good relationship) goes down with the owners.

If you’re not entirely comfortable with communicating increases to your owners, think about engaging an expert to help get your communications right.

What if a Big Move is Needed?

A big move can sometimes be the only option and can involve scenarios such as:

(a) a dramatic change to your fees and charges because it just doesn’t work anymore; or

(b) transitioning from the old PAMDA Form 20a to POA Form 6 (which if you care about your accountant and/or lawyer, you’ll do sooner than later, please); or

(c) a comprehensive overhaul of your letting appointments.

In these situations, it’s worthwhile getting a lawyer involved to help with drafting the schedule/s to your appointment, so they’re customised and tailor-made to suit your letting business and the scheme/s you’re operating in.

Getting legal advice is crucially important if you’re in a short-term letting business and operating a serviced strata scheme within the meaning of the Corporations Act (e.g., hotel, motel, resort or serviced apartment complex).

The Bottom Line

Keeping your schedule of fees and charges up to date, and appropriately increased year on year, should mean your net profits remain where they should be — in your hip pocket — and not elsewhere, such as subsidising an owner’s costs.

Having an up-to-date letting appointment and schedule of fees and charges may even help achieve the best possible result when it comes time to refinance or sell.

If you’d like help to update your letting appointments, or communicate with your owners, don’t be afraid to reach out for assistance. We’re here to help. END

Michael Allen is a Senior Associate at Bugden Allen Group Legal where he specialises in property and commercial matters, including dispute resolution/litigation, advisory and transactional work. Michael holds a dual degree Bachelor of Laws/Bachelor of Information Technology from the Queensland University of Technology, and a Graduate Diploma in Legal Practice, and is an associate member of the Australian College of Strata Lawyers. michael.young@bagl.com.au