Risk Minimisation Guarantees

Definitions

1. In the Tenant Vacancy Guarantee and the Rental Yield Guarantee, the following words have the following meanings:

   • Handover means the date on which physical possession of the property is handed over to you

   • Base Period/s means

     • the period of 6 weeks commencing from Handover, or 

     • if the property becomes vacant during the Guaranteed Period, a period of 6 weeks from each date on which a tenant vacates the property

   • Base Rental means the the lower rental amount expected to be paid by a tenant, as advised on the signed written appraisal provided to you by the Property Manager at the time you purchase the property, fixed for the Guaranteed Period 

   • Guaranteed Amount means the amount which is 92% of the Base Rental amount

   • Guaranteed Yield Amount means the shortfall between the Guaranteed Amount and the actual amount of rent paid by the tenant

   • Guaranteed Period means the period of 2 years commencing from Handover

   • Nominated Manager means DPN or, if DPN does not provide property management services in the relevant area, an agent or property manager recommended and approved by DPN to manage the property.

Tenant Vacancy Guarantee​

2. Subject to these terms and conditions, if during the Guaranteed Period, your property remains unrented for longer than 6 weeks after handover, DPN will pay you the Guaranteed Amount, fortnightly in arrears calculated from the day after the expiry of any Base Period until your property is tenanted or the end of the Guaranteed Period, whichever comes first.

   Example:

   If the Base Rental is $600 per week and your property is not tenanted for 12 weeks after handover of your purchase, DPN will pay you $552 per week (which is 92% of $600), in respect of each week from the 7th week after handover until the property is tenanted. DPN will pay $1,104 per fortnight for each of the 3 fortnights the property is vacant.

   If the property becomes vacant at any time during the Guaranteed Perioda new base period commences, and no Tenant Vacancy guarantee applies for the first 6 weeks after the tenant vacates. DPN will then pay you $1,104 per fortnight commencing from the 7th week after the tenant vacates until a new tenant is located or the end of the Guaranteed Period.

Rental Yield Guarantee​

3. Subject to these terms and conditions, if during the Guaranteed Period, the rental income for your property is less than the Guaranteed Amount, DPN will pay you the Guaranteed Yield Amount. The amount payable is calculated quarterly in arrears from the day the lease commences, until the tenant vacates the property, the rental income achieved reaches the Guaranteed Amount, or the end of the Guaranteed Period, whichever comes first. The Rental Yield Guarantee applies to each lease term within the Guaranteed Period.

   Example:

   If the Base Rental is $600 per week but the property is rented for $500 on a 12 month lease, then the Guaranteed Yield Amount is $52 per week (being 92% of $600 less $500), payable from the day the lease commences.  DPN will pay a total of $2,704 for the 12 month period, with payments made quarterly in arrears.​

   If the tenant vacates the property after 12 months or the property becomes vacant at any time within the 2 year Guaranteed Period, no Rental Yield Guarantee payments will apply while the property remains vacant. If the property is rented for $500 on a new 12 month lease, the Guaranteed Yield Amount of $52 per week will apply until the rental income achieved reaches the Base Rentalor the end of the 2 year Guaranteed Period, whichever comes first.

​Conditions which apply to both the Tenant Vacancy Guarantee and the Rental Yield Guarantee

4. DPN is only prepared to provide the Tenant Vacancy Guarantee and the Rental Yield Guarantee on condition that you:

   1. appoint the Nominated Manager for the Guaranteed Period; and

   2. that you comply with these terms and conditions.

5. Only one of the Tenant Vacancy Guarantee or the Rental Yield Guarantee is paid in relation to any given period of time. 

6. If you terminate the services of the Nominated Manager within the Guaranteed Period, then you must within 14 days of the date on which you terminate the services of the Nominated Manager, repay to DPN, in full

   1. all amounts paid to you by DPN under the Tenant Vacancy Guarantee; and

   2. all amounts paid to you by DPN under the Rental Yield Guarantee.

7. Two lot strata titled properties and single title dual key properties are treated as a single property, and the Base Rental will be the combined amount for both properties.

8. In listing the property for lease, you must:

   1. ensure that the property is advertised at a rental amount consistent with current market rates as advised by the Nominated Manager, which may be less than the Base Rental;

   2. not refuse any reasonable tenant application which has been vetted and approved by the Nominated Manager (for example, you may not reject a tenant who has children or pets); and

   3. appoint a power of attorney or otherwise authorise another person (ie the Nominated Manager, or a relative, friend or associate) to make decisions in relation to the letting of the property if you are on holidays or otherwise unavailable;

   4. not interfere with the defined processes of the Nominated Manager, which are aimed at securing a good tenant as quickly as possible for the best possible rent, which may include advertising the property before it’s completed or available for rent, making decisions in relation to the most appropriate method of advertising the property, offering (at your expense) a maximum 2 week free rent period or other value-add, or reducing the initial advertised price to current market rates as advised by the Nominated Manager;  and

   5. act reasonably in relation to any other decision which may be required regarding the renting of the property in addition to the matters referred to above. 

9. If you do not comply with these terms and conditions, DPN is entitled to terminate the Tenant Vacancy Guarantee and / or the Rental Yield Guarantee by written notice to you.  If DPN terminates either the Tenant Vacancy Guarantee and / or the Rental Yield Guarantee, you are not required to repay any amounts paid to you by DPN.