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Repairs, Maintenance & Fair Wear & Tear

16 September 2020

Taking care & looking after a rental property is a shared responsibility between tenants, landlords, and the Property Manager if managed by a Real Estate Agency.

The landlord is responsible for ensuring that the property is fit to live in and that repairs and maintenance are completed so that the property is in a reasonable state of repair. The tenant is responsible for keeping the property reasonably clean and undamaged and leave it in the same condition it was in when they moved in (fair wear and tear excepted). If the property is managed through a Real Estate Agency, then the Property Manager will act on behalf of the Landlord and will ensure that the property is fit to live in and is the go-to person, for the tenant to report any repairs or maintenance issues that arise during the tenancy.

What happens when maintenance and repairs are needed?

A tenant should contact their Property Manager or Landlord (if not managed by an Agency) as soon as possible and report the maintenance and/or repairs that are needed.

The Property Manager will need to identify how the maintenance and/or repair came to light. Was it due to damage caused by the tenant or just wear and tear?

If it was damaged caused by the tenant, then the tenant will be responsible for the reasonable cost of repairing, restoration and/or replacement to rectify the damage, however, if it is wear and tear, then the landlord will bear the costs.

What is ‘fair wear & tear’?

Fair wear and tear, is a term for damage that either naturally or inevitably occurs as a result of normal use and/or ageing. Another way to look at it is, fair wear and tear is damage that occurs even when an item is used competently and with care and proper maintenance. This covers property fixtures and items that deteriorate over time due to daily use and/or ageing.

Some of these are:

  • Worn kitchen benchtops
  • Worn handles or hinges
  • Scuffed flooring on the carpet on high traffic foot areas

On the other hand, it is not, wear and tear when the damage to the property is due to an accident, negligence, or even malicious.

Some of these are:

  • Burns on kitchen benchtops
  • Holes in the walls
  • Stains or burn marks on the carpet

As an example, carpet has an expected lifespan of 10 years, and therefore wear and tear consistent with its lifespan is expected, so daily walking on the carpet will result in wear and tear.

However, excessive staining, like from a spilled glass of red wine would not be considered ‘fair wear and tear’.

Somethings aren’t always as clear cut, so your Property Manager will need to apply some common sense and ask the right questions in order to make an informed decision on whether or not the damage is ‘fair wear and tear’.

Saying that fair wear and tear is not always something that requires repair, but simply needs to be taken into account based on the age and economical life of a fixture or fitting. Fair wear and tear always has to be a consideration, for example, at a final inspection at the end of a tenancy.

‘Fair wear and tear’ forms part of a Lease Agreement

The NSW, Residential Tenancy Agreement (Lease Agreement) and the NSW, Tenant Information Statement both reference the term ‘fair wear and tear’. Fair wear and tear is the responsibility of the landlord, and tenants are not responsible for paying for ‘fair wear and tear’, however, tenants need to be aware that it is there obligation to leave the residential premises as nearly as possible in the same condition, fair wear and tear excepted, as at the commencement of the tenancy.

There is though, excessive wear and tear, which takes into account, how long tenants have resided in the property or how long it’s been since things like repainting or flooring have taken place.

Excessive wear and tear, is wear from use that isn’t normal and that can come from a lack of overall care taken or just too many people residing in a property, above what has been agreed, as noted on your Lease Agreement.

Tenants need to be mindful that the cost of repairs, or the restoration of, the premises or goods leased with the premises if it is a result of damage caused by the tenant, other than ‘fair wear and tear’, may be deducted from the bond.

Landlords, what you need is a Property Manager that knows the difference and can step in accordingly, and tenants, you need a Property Manager that’s willing to take the time to Inspect the property and explain what’s what.

Antonio Mesiti is the Principal & Property Manager at The Management Agency, a local Property Management specialist offering a one on one and end to end service for his Property Investor clients. For more information visit; https://themanagementagency.com.au/about/

NSW Rental Reforms & Renewing Leases

5/3/2020

As a Property Manager, we spend a lot of time negotiating Lease Renewals as tenants’ leases come up to expire. My opinion is that it is ideal for both owners and tenants to have the security of having a lease in place.

With the recent NSW changes to Residential Tenancy Laws, I’m already seeing landlords reconsidering this and opting to have their tenants remaining on continuing agreements.

This is largely because of the changes relating to the costs incurred by tenants when they need to Break their Lease.

These changes are likely to see increased instances of vacancy periods and therefore loss of rent where the current lease arrangements provided landlords with much more security. For a landlord, being told that their property is vacant with little “compensation” being the Break fee, leaves them open to unpredictable and unforeseen vacancy periods.

“The question now, is it worth renewing a Lease, when they’re so easy for a tenant to break?”

Whilst a fixed-term lease provides tenants and landlords a period of security, with new legislation coming in on 23/3/2020, it’ll be easier for these leases to be broken by tenants so we might see more and more tenants leaving before the Lease expires simply because it’s more affordable to do so.

 

Close to a Lease expiring your options are to either;

  • Not renew a Lease and have continuing agreement where tenants provide you with 3 weeks’ notice to vacate at any point

Or

  • Renew a Lease where tenants can break the agreement by paying a set break fee as outlined below

New mandatory set break fees for fixed-term agreements

Mandatory set fees when a tenant breaks a fixed-term agreement early will apply to all new fixed-term agreements that are 3 years or less. This applies to agreements that are entered into from 23 March 2020 onwards.

The break fees are:

  • 4 weeks rent if less than 25% of the lease had expired
  • 3 weeks rent if 25% or more but less than 50% of the lease had expired
  • 2 weeks rent if 50% or more but less than 75% of the lease had expired
  • 1 week’s rent if 75% or more of the lease had expired.

Using the example of a 12-month tenancy agreement, a tenant would only be required to provide two weeks’ rent to their landlord (that is, an amount equal to two week’s rent) to end their agreement early, if seven months (or 58%) of the agreement had expired.


I’ll be speaking to my clients on a case by case basis as Leases come up for renewal throughout 2020 but already, I am hearing “What’s the point of a Lease”.

The consensus is that at least getting 3 weeks’ notice on a continuing agreement gives you more lead time to advertise and show the property to secure new tenants, it’s all about minimising vacancy here.

As a Property Manager, it’s my job to maximise my landlords investments, and where leases are renewed at a cost to landlords it might not be the best investment to all clients when you consider a lease can be broken in the last 3 months and all the owner will receive is 1 weeks rent as the set break fee.

While there are many other changes to legislation coming in, which I’ve covered in my posts, I feel this change will have the greatest impact on both landlords and tenants.

Landlords face uncertainty in terms of the higher probability of lost income and Tenants face not having the offer or opportunity to renew their lease and get some long-term security in their homes.

My opinion is that there are no real winners here, unfortunately.

While it may sound advantageous to tenants being able to more affordably break their lease and move, long term investors may simply be turned off investing and may simply not offer the tenants that want to secure longer leases, the option.

As an investor, will I be renewing my tenant’s leases? Probably not, unless I’ve got tenants that really demand it and where I feel they’ll give me the courtesy of some notice of their vacating rather than none.

“What’s crucial here, is keeping good working relationships with tenants. Relationships where tenants will communicate any changes in circumstances to their Property Manager. So that we will get the heads up and some notice, even though the tenant doesn’t technically have to provide it.”

As Property Managers, it’ll be in our, and our client’s best interests that we keep our eyes and ears open and are attentive to our tenant’s movements and their circumstances.

Antonio @ The Management Agency

Changes to Residential Tenancy Laws – Read here for Updates

25/03/2020

Amidst the current Corona Virus climate, we’re adapting to the changes to the Residential Tenancies Act.

Whilst some of the new regulations surrounding Agents licensing won’t be enforced for a grace period of 6 Months, most agencies have already implemented new procedures surrounding their tenancies being compliant.

What are we hearing so far:

  • Owners not particularly liking tenants having their contact details, privacy concerns and the reasons why they have enlisted a Property Manager
  • Less emphasis on wanting fixed term leases, a lose lose for all maybe

The positive:

  • Tenants can sign electronic leases without needing a witness, a streamlined process for all

We’ll all adapt and innovate, as we must in these times.

Stay safe, Antonio


The latest release of up to date information issued by the Office of Fair Trading can be found here.

More information to follow here below as it comes to hand.

Antonio @ The Management Agency


9/3/2020

Further information is coming to light with regards to the changes coming into place on 23/3/2020 with many Property Managers hopeful we’ll have the complete outlook within the coming weeks, especially when it comes to the time frames in which all of the changes need to be in place, where some of these are immediate and others won’t be.

Here are some points I’ve been reading about;

  • New Leases from 23/3/2020 will need to list one of the Landlords points of contacts, whether it be an email address or phone number, this is set to be a requirement and a non-negotiable.
  • All Landlords will need to read and sign a “Landlord Information Statement” this will ensure that all landlords are aware of all of their responsibilities when a Lease is entered into, we are yet to get our hands on a copy of the prescribed form.
  • Similar to Smoke Alarms, properties will need to be tested and certified for Water Efficiency at the beginning of tenancies where Water Usage is being charged and recouped from tenants.

More to come as we approach the commencement date of these reforms,

Antonio @ The Management Agency

Read more

Tenants’ Rights & Responsibilities

17/9/19

You have a lease, right? Well all of your rights and responsibilities are listed there but countless times I’ve signed up new leases and tenants just want to sign and get their keys.

I get it, you’re about to embark on several painful hours of moving and unpacking.

This can mean some nasty surprises along the way, such as water usage bills and the cost of breaking a lease. So, any Property Manager would highlight to a new tenant what they have to know and must read, but I’m going to try to simplify and outline what your BASIC rights and responsibilities are here. You still need to read your lease though and before signing it.

  • Paying Rent

Not one to play around with, this responsibility stands regardless of any issues being unaddressed.

There are other avenues to have any complaints heard and addressed but not paying rent leaves you vulnerable to having your tenancy terminated.

  • Breaking your Lease

Circumstances change and so is the legislation surrounding this, there are a couple of options for breaking leases within the agreement so know which one you are agreeing too before signing as that will apply despite pending legislation changes. Just know what you’re up for if you do need to move before the Fixed Term of your Lease expires.

  • A Right to Quiet Enjoyment of the Premises

Noise complaints, unapproved access to your home and other instances where you’re being disturbed are well documented and covered within your lease agreement. You have a right to enjoy the property peacefully and quietly. Access to the property should be approved by you in most instances.

Neighbours have the same right so you in turn must insure you’re not impeding on anyone’s else’s rights.

  •   A Property that is in a good state of repair

Repairs and maintenance, especially of an urgent nature, need to be acknowledged and attended to within reasonable time frames. These timeframes are well documented within your lease.

Make sure you report any issues in writing to your agent or owner so it’s well documented. Reporting repairs and issues also protects you as having fulfilled your obligation to notify your agent or owner so that they can then make arrangements. Get to know what’s classed as urgent and what isn’t and ensure you’re provided with contacts of preferred Emergency tradespeople.

  • Specific Building By-Laws

Each building has its own set of By-Laws and you need to be provided with these at the time of signing the lease so you know what to comply with.

  • A Condition Report

You must be provided with an In-going Condition Report at the time of your Lease Commencing, not after it’s commenced. This report should list the areas within the property and list the condition of fixtures within that area.

If you don’t complete a copy of the report within 7 days of your lease commencing, agree or disagree and make additional comments than the original report handed to you will be taken as being agreed to.

“Completing and submitting this report within the 7 days is the first thing you can do to ensure you get your bond back at the end of your tenancy.”

  • Complaint Handling & Resolution

Every tenant has a right to have their complaints acknowledged and addressed, you can go straight to the Principal of any agency with your complaints, lodge a complaint with the office of fair trading who will investigate the issue, there are tenancy advocacy services as well as lodging an application to the tribunal for a hearing of your matter.

First up though, speak to the agent or owner about your issue and document it, if all else fails you have other avenues.

  • Renewing a Lease

When your lease is coming up to expire, ideally, you’ll be offered a new lease, if not then reach out and request a new lease if it’s your preference to have some ongoing certainty. Neither party is obligated to renew the lease but that doesn’t mean you need to vacate and can stay on indefinitely.

So in summary:

  •  Always pay rent on time
  • Breaking your lease, Read your lease and stay tuned for legislation changes
  • You have a right to peace and enjoyment of the premises, and you need to allow that of others as well
  • Property should be in a good state of repair, the onus is on you to report issues as they arise
  • Get to know your building By-Laws if you’re in a Strata Plan (Apartment complexes)
  • There are several avenues to get your complaints, issues heard or advice
  • Ask about renewing your lease even if it hasn’t been offered if you want the certainty

Lastly, you deserve (and have a right to) a reasonably responsive and courteous service so don’t settle for less.

If you need advice feel free to reach out, if for some reason I can’t answer your query then I can point you in the right direction.

Thanks for reading and if you have some left over downtime? Read your Lease ?

Antonio

Setting up, Styling & Settling into your new home

12/6/2019

When you’re looking for a new home it’s likely you will see a property while either an owner is residing there or the tenants that are set to soon vacate so you’ll get a rough idea of spacing and configuration.

Sometimes you’ll see a bare vacant property that for some can be hard to imagine or get your head around configuring it, and many prospective tenants are turned off easily when they just can’t see the potential.

But if Italians can make homes by carving into the calcareous rock (see pic by me taken today) in Matera, then you can make a home too!

Every property has potential to become a home and have seen many stunning transformations from bare and boring to homely and stylish.

For the most part a rental property is what it is so be sure to be generally happy with the flooring materials, light fittings and window coverings.

TIP: For whatever approvals are given through verbally, back that up with an email to confirm the conversation.

So after the physical move get the stylish & homely vibes you’re looking for;

  • Unpack

Start unpacking by focusing on the bedroom and bathroom so that somewhat of a normal routine can start up straight away and then onto the kitchen and living areas.

Whilst art, pictures and personal items aren’t priority do start unpacking and laying pictures around the house to get an idea of where they work best.

  • Lighting

For the most part lights are what they are, and what’s provided but bare bulbs can be easily shaded with essentially cheap and easily installed coverings

Floor Lamps, Table lamps, bench lamps- go crazy and set a mood with your lighting. Add floor lamps to dim and barren corners, table lamps on a kitchen bench or hallway console table.

  • Flooring

Rugs and Runners can cover anything so you can sometimes see past what’s there, saying that a lot of tenants specifically don’t want or can’t live with carpet whereas others love it.

  • Furniture

Few people, owners or tenants, are going to go and replace all of their furniture just because they’re moving into a new property so importantly- take a tape measure to viewings and check things like your Fridge space, washing machine space and Lounge to see if these will fit.

  • Walls & Art

While most rental properties should stick to a neutral color scheme, some don’t and orange or green walls will not be to everyone’s taste. If it’s a deal breaker you can apply on the basis that specific areas are painted or request permission to DIY once you move in.

  • Windows

Outdated or simply ugly blinds can be easily replaced with ready to hang blinds or curtains if you really want to update these. Just be sure to store what was there for when you do hand the property back. Some Ikea or Freedom curtains can work wonders.

TIP:

If in doubt you shouldn’t hesitate to contact your property manager to see what’s allowed and what isn’t and they should be able to assist so ask questions without reservation.

Properties are otherwise offered “as is” so what you see is what you’ll get if you don’t ask beforehand.

Welcome Home!
Antonio

Tips on Preventing and Managing Mould

22/2/19

Property Managers fear it, tenants hate it and owners are usually just confused by it but it is unfortunately a part of life in many properties in Sydney so we have to talk about Mould.

Why it’s a thing, why it’s an issue and a serious sticking point when it comes to renting, managing it and who exactly is responsible. So here goes!

Despite the common belief that there is always an underlying building issue or source of its appearance in many cases it just isn’t so as many properties are susceptible to mould due to factors such as a lack of natural light and ventilation and allowing a property to be ventilated to outside is a big factor in allowing mould to grow and spread.

Mould’s organisms (part of the common fungi group) are airborne everywhere, indoors and outdoors. It is in moist and inadequately ventilated areas’ that inhibits its growth it thrives on moisture and organic material.

Another important note is that mould needs to be cleaned / killed as it appears but not just from walls, from clothing, glass and window frames really wherever it appears and thoroughly. It will otherwise continue to grow if the environment allows it to. All forms of mould have some potential to cause health problems.

The responsibility of a mould issue can be summarised by Landlords being required to address any dampness issue, i.e. a leak or water penetration issue that is causing the problem, however a tenant must ventilate the premises and is advised to clean mould as it appears.

There are ways in which mould can be managed and in a Residential Tenancy it does require some effort on the tenant’s part so here are some tips I’ve gathered from NSW Health, the office of fair trading, experience as well as other agents.

Some Important Points:

  • If not removed/ cleaned then mould will grow and spread. Mould can be removed using either a household bleach, specific mould cleaning product or wiping down the area with Vinegar.
  • The appearance of mould does not always indicate that there is an underlying issue i.e. a leak or water penetration issue.

How to Prevent Mould and Manage it

Allow and ensure proper ventilation as preventative meaning;

  • Ventilate areas to the outside, windows and doors whenever possible and practical
  • While drying clothes, either hanging or using a dryer, ensure you ventilate or do so in a cool area of the property to ensure less moisture is held in the air
  • Use any available exhaust fans or vents in bathrooms or laundry
  • Dry clothes and footwear thoroughly prior to storing them
  • Do not block any fan vents and keep free of any build up
  • Allow Sunlight into the home whenever possible by opening blinds during the day
  • Doors and windows should be open whenever practical, overnight condensation on windows should be allowed to dry or dried out where possible
  • Furniture and items should not be pushed up directly against the walls, as this creates dark airless areas allowing for mould to grow
  • Dehumidifiers do work when used, most agents or landlords will happily supply one when requested, they draw moisture out of the air in affected areas, they may not be a permanent solution but they do what ventilating would do when you can’t ventilate properly or securely

“Regular ventilation and cleaning of any mould that appears should prevent re occurrence”

Mould Removal Australia has kindly compiled a Fact Sheet on the prevention and treatment of mould, if you’d like a copy just send through an enquiry and i’ll send it over to you.

Hope this can somewhat dispel some theories and thoughts about Mould, let me know if you have any other thoughts or want to ready about any other issues. I’m all ears!

Oh & the Pic is actually Marble because… ewww Mould.

Antonio 🙂

10 Tenant FAQ – Answered

26/10/2018

It’s unfortunate but many tenants know first hand that not all agents are approachable, so here are my 10 Questions that a Tenant may have answered.

I really could’ve come up with 50 of these so will continue on these if they’re what you want to read, let me know!

As tenants have come and gone through properties I’ve managed and off to other agencies or to become property owners, I always like to leave off telling a tenant that if they need any advice they can always call – a free service that I offer – and many call on that. So if there’s anything you need to or want to know, reach out and i’ll do my best 🙂

  1. How can I secure a Property with a Pet?

Always ask if a property is Pet Friendly or if they’re considered, a lot of owners are coming around to the fact that tenants come with Pets. Include Photos of your Pet and references if you have them with your application, if you’re moving down the track really try to get a reference from the agent for your Pet in writing in case needed later on. As long as you do the right thing and follow any special conditions you’ll be fine.

 

  1. How do you choose which applicant to approve for a property?

A Property owner makes the final decision on whom they accept for their property based on the information provided and the references received. In most cases Agents can make recommendations but not the final decision. I find owners look at suitability based on what the tenant is looking for as well, some of these factors can be;

-Short Term VS Long Term

-Confidence in ability to pay the rent

-Positive references from previous rental agents or landlords

 

  1. What should I know before I enter into a Lease?

You should always read a lease, back to front, before signing request a copy, even if it’s just the blank document and any Special conditions so you can prepare any questions ahead.

Basically, be aware of your rights and responsibilities while at the same time you’re getting educated as to the owners’ responsibilities as well, it goes both ways.

Know what else you’re paying for, Water Usage etc. Make sure you’re issued with the office of Fair Trading’s New Tenant Checklist and ask any questions before signing!

Another important factor, unless expressly put in writing, you’re taking the property “as is”.

 

  1. I’ve signed a Lease, what happens next?

Something I always push for is that tenants complete their part of the condition report and return it to the Agent within 7 days of the Lease commencing, if not the agents copy of the report without your amendments or additions is taken as accepted and will be used at the final inspection when you move down the track.

Report any repairs and maintenance in writing and be sure to connect utilities in your name.

 

  1. Is there anything I need to do ahead of a Routine Inspection?

Not necessarily, a quick tidy and clean does the trick but importantly highlight any issues to your agent (or owner) before hand so they can look at these on the day and report them appropriately.

Being home is preferred if you can really so you get a chance to highlight any concerns to be noted at this time.

 

  1. I have an issue, what do I do?

Communicate! Put any repairs or concerns in writing, email will suffice, and speak to your agent or owner. If you’re going to be late with rent, your living situation has changed or something is bothering you.

 

  1. How often should rent be paid and how do I know where I am up to?

As long as it’s on time then the frequency should not matter, always allow additional days for Electronic Transfers and if sharing you’re best off to pay your rent in one consolidated payment. Keep records or ask the agent for a ledger or receipts.

Most agents offer online access to your rental account, showing receipts, payment due dates etc.

 

  1. What’s an Urgent Repair and what isn’t?

Your lease lists these as a breakdown or failure of any essential service is an Urgent Repair.

So, No Water, Hot Water, Cooking facilities, Power or an unsecure premise is urgent. Your agent should have provided you instructions at your lease’s commencement but if not, the law is quite clear cut here. Urgent repairs can’t be delayed unnecessarily and you can go ahead and arrange them if it’s out of hours as long as it’s reasonable and could not wait.

 

  1. My Lease is coming up to expire, what’s the process?

Discuss the process with your agent but also put it in writing whether you’d like to resign or will be vacating. Notice periods change once the lease has expired so be aware of timing and communicate any decisions or requests. In most cases Agents will review with a view to request a new lease ahead of the lease expiring.

 

  1. How do I finalise my tenancy once I’ve moved?

After having given notice you should have been issued with some clear instructions on finalising rent to your vacate date and how to go about arranging a final inspection. Follow the agents process and try to be present at the final inspection if you can. Make sure you give the agent your new address and bank account details for the bond refund. If in doubt about any of the process, ask questions, moving is stressful enough without hitting any additional hurdles!

Up next I’m thinking a Q&A with me, so will need an interviewer! If there’s anything else you want to see here I’m open to suggestions!

Antonio 🙂

Updates Below: Tenancy Reforms, change is on the way!

Update: 4/12/2018  2019 Residential Tenancy Act: Stages & Timing

A recent update by the Real Estate Institute of NSW indicates that the reforms will be rolled out in two stages in 2019. Exact commencement dates of the new legislation hasn’t been announced as yet but will be sure to keep this updated. The below outline from the REINSW gives some approximate timing and the stages in which the changes will come into effect.

The stages ahead and timing

The anticipated approach is that the changes will be tackled in two stages:

1)      Stage 1: Domestic violence related reforms (this would include a declaration form in the schedule to the Regulations)

2)      Stage 2: Remaining reforms.

Stage 1

NSW Fair Trading are looking to commence stage 1 prior to March 2019. This means that targeted consultation will occur over the coming weeks on the declaration form which has been issued to REINSW (the rest of the domestic violence changes are reflected in the Act). REINSW Legal Counsel and the RTA Sub-Committee have held their first meeting to discuss the declaration form and its content, and REINSW will be lodging a Submission on the declaration form by 28 November 2018.

Stage 2

NSW Fair Trading are looking to implement stage 2 later next year. NSW Fair Trading have informed REINSW that formal consultation on the stage 2 reforms is not planned to occur until after March 2019.

In any case I’m assured that the REINSW will be keeping their members in the loop which I will then update here.

Thanks for following, Antonio

Update: 30/10/2018

Having attended an Information Session today held by the Real Estate Institute of NSW on the Residential Tenancies Act it appears changes are imminent.

What has arisen out of the reforms are definite changes, though alot of detail and “grey areas” are needing further clarification. The vast majority of these changes are not retrospective.

So what do we know for sure:

  • Changes to Break Lease Fee’s are set out to a one off fee dependant of the time period lapsed of a fixed term agreement
  • Changes to way in which Tenancies subject to circumstances of Domestic Violence are treated and finalised
  • Rent Increases in a Periodic Agreement limited to once in every calendar year
  • Landlords will be required to complete an information statement that confirms they are aware of their rights and obligations before a Tenancy Agreement is entered into
  • Smoke Alarm issues and repairs will be deemed an Urgent Repair
  • Landlords will have other obligations to meet as to Standards surrounding being fit for habitation an example being adequate power points in each room
  • Properties that are not separately metered for utilities incl. water can not have charges passed onto tenants; An example being that Granny flats and some duplexes will not be able to charge water usage to tenants where the meter isn’t read separately by the water board
  • A prescribed list will be drawn up to clear up what “reasonable” Alterations to a premises are, therefore allowing tenants to make set out alterations but permission must be sought in any case

So more to come on this as well and more changes as I’ve heard much discussion about reviews surrounding Rental Bonds and what will be some clarity around Mould and Responsibilities.

What I do look forward to, is a transition towards Real Estate becoming recognised as a Profession which is currently being lobbied. This could see the creation of a Real Estate specific commissioner overseeing the industry instead of Real Estate coming under the NSW Fair Trading umbrella. This set of Professional Standards is likely to come about in 2019 following on from reform and changes surrounding Real Estate Agent Licensing and changes to Continuing Professional Development which is being set out at the moment.

What will that mean, Real Estate Agents will have a much higher standard of training and licensing entry into Real Estate roles.

For the time being, all remains the same while the Residential Tenancy Acts’ new set of Regulations is drawn up.

Interesting times as always to be a Property Manager but also a Landlord or Tenant and not only is there much work to be done on these and further reforms, there is a great need for Education across the Property Management and more widely the Real Estate Sectors and this education must then be passed onto Landlords and Tenants who all have a vested interest in this space.

That’s what I plan to continue doing with both my blog and down the track newsletters, sharing valuable and relevant information. I also plan to do this one on one with my Owners and Tenants so that everyone knows where they stand and in turn add value to everyone’s experience with The Management Agency.

I appreciate you following these updates and am sure there will be much more to come!

With Thanks,
Antonio

 

Updated: 18/10/2018

Reforms Passed

Reforms to the Residential Tenancies Act have passed without amendment, according to the Real Estate Institute of New South Wales.

These major changes affect the real estate industry, landlords & tenants.

REINSW President Leanne Pilkington said the Residential Tenancies Amendment (Review) Bill 2018 has passed and REINSW is now commencing the first phase of educating the property management community.

“It is important for our profession to understand all of the changes that the new Bill includes. We will be conducting intensive Training Sessions in 17 locations across the state beginning in Sydney next Thursday 25 October and runinng to 29 November 2018.

“The second phase will follow the release of the Regulation, which are the guidelines that dictate how the act should be applied.

“REINSW with the support of the REINSW Property Management Chapter Committee and a dedicated Sub-Committee which formed in June 2015, worked tirelessly to specifically identify those areas in the current legislation requiring reform.”

Ms Pilkington said while many of our lobbying efforts have been adopted in whole or part by the Government, a lot have been ignored, such as the Government’s proposed changes to:

  • Alterations to property
  • Break fees
  • Domestic violence
  • Rent increases, and more.

The bill will now be sent to the Governor of NSW for his assent. A date for the reforms to be implemented is yet to be disclosed.

I will be attending an REINSW session covering the reforms in Late October so more details to come!

 

Original Post: 26/09/2018

The NSW Rental market is constantly changing and growing, more than 820,000 households live in a rental property and the demand continues to grow with more and more people renting and renting for a longer period of time.

Yes, we’re heavily governed by the Property Stock and Business Agents ACT (PSBA) and the Residential Tenancies Act (RTA) and we need to be considering how many people live in rented premises and rent out their properties.

Under section 227, the Residential Tenancies Act must be reviewed every 5 years to determine whether or not the objectives and terms remain valid and appropriate. This current review process started back in 2015 and is now finally being debated this week in NSW Parliament.

Much is being said in the media about what is and what isn’t up for discussion.

There seems to be some certain changes in regards to:

  • The ability for tenants to make minor alterations to properties.
  • The introduction of a new minimum standard for properties.
  • The ability for tenants to get rectification orders from Fair Trading for repairs.
  • Restricting rent increases for periodic leases to once a year.
  • The ability for victims of domestic violence to break a lease without incurring a penalty.

The biggest debate stems around “No Ground Termination Notices” and the large majority of people that want to see the ability for landlords to terminate on No Grounds gone all together.

Some years back the notice period was increased from 60 Days to 90 Days and tenants are allowed to leave at any time within the notice period without giving counter notice. That took some time to register with landlords but has always worked well, it’s given tenants ample time to find a new home and the flexibility to secure it.

It’s unfortunate that issuing a Termination notice is being viewed as retaliatory where in most cases the owner genuinely needs their property back, to live in, to renovate, to sell.

All in all, there are some good changes that will help our many tenants make themselves at home and give them some certainty.

It does appear that Owners’ will be left with less certainty if tenant’s will able to break their leases with smaller penalties leaving them open to vacancy, re letting costs etc. No one seems to be all that sympathetic though.

It doesn’t seem that any changes will occur to No Grounds Notices at this Review, but who knows, the next review is only two years away!

All I know is that as an owner or tenant if you can’t keep up with all of this, you’ll soon find out how valuable your agent is because it’s on us to know! I’m waiting for the final bill to pass and will then get reading ?

Here’s a comprehensive list of what the reforms include:

Under the Residential Tenancies Amendment (Review) Bill 2018, the government’s proposed changes to rental reforms in NSW include:

  • If the property is in a strata scheme, the landlord or landlord’s agent needs to pass on a copy of the by-laws before the tenant enters into a residential tenancy agreement.
  • The creation of an offense for a landlord or landlord’s agent if they pass on a completed condition report to the tenant after the signing of the residential tenancy agreement, with a maximum penalty of $2,200.
  • The creation of an offence for a landlord or landlord’s agent if they do not sign an acknowledgement on a residential tenancy agreement, or if a landlord’s agent fails to sign the acknowledgement of the residential tenancy agreement without a statement from the landlord in writing that the landlord has read and understood a rights and obligations information statement.
  • If rent is paid via cheque, receipts are allowed to be sent to the email address of the tenant.
  • Requirements for rent increases do not apply to fixed terms less than two years that specify when, and the amount by, the rent is increased.
  • Rents paid in a periodic agreement are not allowed to be raised more than once a year.
  • New minimum standards for properties have been introduced, which include:
    • basic access to electricity and gas;
    • structurally sound buildings;
    • adequate natural or artificial lighting as well as ventilation; and
    • adequate outlets for lighting, heating and appliances.
  • Liability for damage to properties caused by someone else is not imposed on a tenant, or co-tenant, if a domestic violence offence is involved with the co-tenant.
  • Landlords can have access to premises without the tenant’s consent to take photos or visual recordings of the interior to advertise the property for sale once in a 28-day period, as long as reasonable notice is given and must not include tenants’ possessions in photos or footage.
  • Only landlords can carry out repairs to smoke alarms, with the exception of certain kinds of smoke alarms, with a maximum penalty of $2,200 for failing to repair.
  • In matters involving a Tribunal about repairs, more consideration is given to time frames and reasonable diligence.
  • Tenants who require urgent repairs can get rectification orders from Fair Trading.
  • Landlords will not be able to unreasonably refuse minor alterations, such as picture hooks.
  • The termination of an employee or caretaker residential tenancy agreement cannot be earlier than 28 days after the notice to terminate was given.
  • The termination of other fixed-term tenancies must be on or after the end of the fixed term and no earlier than 30 days after the notice to terminate was given.
  • The termination of periodic tenancies must be no earlier than 90 days after the day the notice was given.
  • Landlords cannot give a termination notice to a tenant solely because of their failure to pay rent, water, electricity, gas or oil charges unless the charge has not been paid for at least 14 days.
  • In matters involving a Tribunal about the termination of a tenancy due to unpaid water charges, the termination is only valid if the landlord has requested payment from the tenant within three months of the bill’s issue.
  • Tenants may give a termination notice if they enter into an agreement by misleading statements that are proven to be concealing certain facts.
  • Tenants may give a termination notice if the property is included on the loose-fill asbestos insulation register during or before the commencement of the tenancy without informing the tenant.
  • Te/ants or co-tenants can give a domestic violence termination notice without any penalty if they are a victim of domestic violence, which is defined as:
    • The tenant or co-tenant being a victim of a domestic violence offence where the offender was declared guilty during the tenancy.
    • The tenant or co-tenant has the protection of an active DVO.
    • The tenant or co-tenant is protected against family violence by a domestic violence offender.
    • The tenant or co-tenant has been declared by a competent person to be a victim of domestic violence.
  • The break fee for fixed-term agreements less than or equal to three years is dependent on the percentage of how much of the fixed term has expired:
    • less than 25 per cent: 4 week’s rent;
    • 25 per cent to less than 50 per cent: 3 week’s rent;
    • 50 per cent to less than 75 per cent: 2 week’s rent; or
    • 75 per cent to 100 per cent: 1 week’s rent;
  • The creation of an offence for when a landlord or a landlord’s agent lists a tenant or co-tenant’s personal information in a residential tenancy database if the tenant or co-tenant terminated a tenancy due to domestic violence, with a maximum penalty of $2,200.
  • The creation of an offence for database operators to charge fees for giving copies of personal information in a residential tenancy database to that person.

How to live peacefully in Strata Complexes

13/9/2018

Apartment Supply coming to the Sydney and Melbourne markets was detailed in a recent report compiled by David Scutt in the Business Insider.

-The number of units in Australia could increase by 10% over the next two years according to analysis by CoreLogic

-61.8% of this expected increase in supply is to be absorbed by just Sydney & Melbourne

-Over the next 12 months and additional 94,000 new units will be completed nationally!

Against these figures, supply may well meet demand whereas for years it’s been more demand than supply. Not necessarily true of all suburbs though where there will always be more demand for the same levels of supply such as Sydney’s eastern suburbs.

What this obviously means is that a large proportion of the population will be living in Strata complexes, so how can everyone ensure they’re By-Law given rights to quiet enjoyment of their premises? Well it’s a challenge for many and as a Property Manager we can see first hand the issues that it can present.

I would safely say that most issues that arise within Strata complexes involve, noise, parking & smoking. Some complaints escalate quickly it’s not always easy to find middle ground so where ongoing disputes are involved it can make for a pretty uncomfortable living situation.

A Strata complex should have a set and clear set of By-Laws in place and hopefully an effective Strata Management Agency involved, and there are some good ones.

So how can everyone get along when you have so many people, personalities and even routines living in such close quarters?

Everyone needs to pay their part really so here’s some tips to Strata Living having been there myself and having managed many issues in Strata complexes in my time.

-Flexibility; Everyone needs to give a little and make allowances, the occasional party and differing personalities need to be handled delicately at times. Listen and be flexible, usually an issue is just a passing one that can be dealt with and moved on from once resolved.

Awareness; know your Strata rules and By-Laws so you know your rights but also your responsibilities, remembering that these rules apply to all in the complex so all are equals!

-Get involved; Many people couldn’t be bribed into attending a Strata meeting but if you want action, change or improvement you’ll need to grit your teeth and get in there. Be heard and make your vote count. If the building needs maintenance then report it, it is your home.

Respect; common property is owned and shared by all so seek approvals to use common property and always be mindful of others when in common property. Creating a nice building community is as simple as saying hi or a smile when checking the mail.

-Talk; If there’s a problem then talk about it with your neighbour(s), people don’t always know what they’re doing wrong so a simple conversation helps to alert others nicely without the need to escalate an issue and without you letting it fester and build frustration.

Whilst I relate all of these tips to common sense I think it’s an appropriate reminder that if you’re going to live in a Strata complex that you need to be open minded, every Strata complex will have a different make up of demographics and personalities all there for their for their own specific reasons but one commonality is the desire to peacefully enjoy their home and that’s everyone’s basic right.

Research suggests Private Rental Growth is not all positive

3/8/2018

With an Increase in Private Rentals, why employ or rent via a Property Manager?

According to a recent report carried out by the Australian Housing and Urban Research Institute the private rental sector between 2006 to 2016 has grown by 38%, meaning that more than 2 million Australian households are rented/managed privately.

It is predicted that this rapid growth is set to continue with the increasing number of Owners and Tenants using online platforms to either secure tenants or to rent a property. Portals such as Facebook are making it easier for people to line up these informal arrangements.

The report also finds that this is having an effect on the market by inflating prices on the “room rental market” where the private rental market was traditionally seen as a more affordable option.

Owners and Tenants should be aware that these portals and apps do not do a lot for the protection of user’s rights as they appear to be, for the most part unregulated.

Real Estate Agents are bound by the Residential Tenancies Act that sets out regulatory protection for all parties involved, whereas the alternatives such as Rental Bidding App’s allow for increased competition in the Private rental market which leads to people being priced out of the market.

So why should Owners and Tenants use a Property Manager?

Tenants:

  • You have a legally binding Tenancy Agreement governed by the Residential Tenancies Act in place providing you protection of your rights
  • You are issued with a condition report documenting the state of the property you are moving into and are given an opportunity to document any discrepancies
  • Your rental payment history is recorded with receipts and ledgers
  • Ensures that your bond monies are appropriately lodged and safe guarded
  • Be issued with a rental reference at the end of your tenancy from a reputable agency which will come in handy down the track and particularly when looking for a new home as a reference from an agent carries more weight than one from a private landlord
  • Ensure that you have avenues to have urgent repairs dealt with and that any other issues are addressed promptly, professionally and in accordance with the Tenancies Act

Owners:

  • You have a legally binding Lease Agreement governed by the Residential Tenancies Act in place providing you with protection of your rights and awareness of your responsibilities
  • Your properties condition is thoroughly documented before, during and at the end of each tenancy
  • Your financials are recorded, documented and reported therefore making financial tracking and end of financial year tax assessments seamless
  • An agent ensures that you are compliant in all of your obligations under the Tenancies Act and further ensures that the tenant is fulfilling their responsibilities – An agent should be educating their Owners and Tenants as to their respective obligations
  • Outsourcing the day to day management to a Property Manager eliminates lost time and much stress to Owners

There is much more involved in the renting process beyond these points listed and a lot of what Property Managers do cannot all be listed here.

Regulations are constantly reviewed and changes are regularly implemented. A licensed and experienced property manager is required to keep up to date with all ongoing changes to legislation.

A Private Owner, or Tenant for that matter, can find this all difficult to navigate and in unregulated territory Owners and Tenants do leave themselves vulnerable.

 

I suspect that in the Private rental market, a lot of what is Best Practice to most Property Managers’ may be missing. Having a Property Manager in place ensures that Owners and Tenants clearly know where they stand and acts as a mutual point of contact for all parties.

For Owners and Tenants there is a lot of risk and uncertainty  that is eliminated when you employ a Property Manager, well a good one!