With new rental laws that came into effect from 23 March 2020, both existing and new landlords have to make sure they're up to date and following the changes to ensure their investments run headache free.
The new laws do increase protection and certainty for tenants but they also afford significant protection for landlords. They set out the rights and obligations of landlords as well as tenants.
The clarification on repairs and maintenance will increase transparency between the landlord and the tenant and reduce disputes.
Let take a look at the changes and what they mean for you...
Minimum Requirements to be Habitable
There are seven requirements that a rental property has to meet at the start and throughout the tenure of the tenancy to be considered fit for habitation. The rental property should be:
Naturally and artificially lit in each room, other than storage rooms and garages.
Connected to electricity and gas and have adequate electricity and gas outlets.
Adequate plumbing and drainage
Infrastructure for the supply of hot and cold water for drinking, cleaning and washing or connected to a water supply service.
Contain bathroom with toilet and washing facilities with adequate privacy for the user.
Meeting the minimum standards does not automatically qualify the property as fit for habitation. There are further conditions to be met such as those for health and safety.
-The landlord or agent must not conceal any material information from the tenant or make false or misleading statements before the signing of the agreement.
-The landlord or his agent must disclose to the tenant if there are any plans to or if any agreement has been signed to sell the property during the tenure of the lease or if any mortgagee has initiated court action for taking possession of the property.
-The landlord or his agent must also disclose if the property was used to grow or manufacture any illegal drugs within the previous two years.
-They have to inform the tenant whether the property is a strata property and if any repairs or major works are to be carried out to or on the property.
-They must also disclose if there is a fire safety order or if an application has been made to remove external combustible cladding.
Smoke Alarm Obligations
Landlords are required to ensure that the smoke alarms installed in the property are in working order. Failing to do so or not maintaining them during the period of the tenancy will make the landlord liable to penalties.
A landlord must:
-Check annually that all the smoke alarms installed on the property are in working order
-Replace a removable (or removable Lithium) battery within the period specified by the manufacturer, or otherwise annually
-Repair or replace any smoke alarm that is not working within two days of becoming aware that the alarm is not working
-Replace a smoke alarm with a new smoke alarm within 10 years from the date of manufacture of the alarm, or earlier if specified by the manufacturer
-A tenant will have to inform the landlord if the repair or replacement of a smoke alarm is needed, as well as if a battery or the alarm itself needs replacement.
-If the landlord fails to repair or replace either the smoke alarm, battery or the alarm within the specified time, the tenant may do so after notifying the landlord of his intended actions. The landlord will have to reimburse the tenant for the costs incurred upon the tenant providing appropriate evidence.
Tenant's Right to Make Minor Changes
According to the new laws, the tenants can make minor alterations, additions or renovations after obtaining the written consent of the landlord. The new law includes a list of changes, alterations and/or modifications that the tenant can make or do.
-The landlord cannot unreasonably withhold consent for alterations, additions or renovations that are included in the list.
-The list also specifies the changes, alterations or modifications which the landlord may require a qualified person to carry out.
-The tenant will have to bear the cost of all such changes, alterations or renovations unless the landlord agrees otherwise.
Damage and Removal of Changes and Modifications
Tenants are still liable for any damage that they cause to the property. They have to leave the property as it was at the beginning of the rental tenure, except for fair wear and tear.
Tenants will have to remove and make good the changes, alterations and/or modifications done at the end of the tenure of the rental. Tenants cannot remove any fixture or modifications that the landlord has paid for.
Break Fees and Fixed Term Agreements
When a tenant chooses to break a fixed-term agreement early, mandatory set fees will apply to fixed-term agreements that are for a tenure of fewer than 3 years and are entered into after 23 March 2020.
The break fees will be:
-4 weeks rent if the lease expired is less than 25%
-3 weeks rent if the lease expired is less than 50%
-2 weeks rent if the lease expired is less than 75% and
-1 week's rent if the lease expired is more than 75%.
What Should a New Landlord Do?
Recruit a Property Manager
With all this and more, what a new landlord needs, is a smart property manager. Look for a manager who has a good track record and is experienced.
-The manager should know the area where your property is located, be experienced in the legislation and understand the property market in the suburb.
-Make enquiries and find out if the firm you are recruiting is good at pricing rental properties. Your property should be priced accurately and not under or overpriced.
-Ensure that they can find good and decent tenants that have been vetted correctly.
-Make sure that the manager will be able to take good care of your property and has the right connection with maintenance contractors.
-Above all make sure that your manager communicates promptly and regularly with the tenants and you.
Property Manager's Certification
Property managers also have to have certain qualifications under the new laws. You will have to ensure that your property managers:
-Maintains separate trust accounts for rentals and sales and that money from rentals and sales are deposited into appropriate accounts.
-Appoint a licensee who will be the sole in-charge of the trust accounts. Only the licensee will be able to authorise the withdrawal of money from the trust accounts.
-Have appointed a licensee who is qualified to carry out the functions concerning your property and per the restructured laws.
-Take Professional Photographs and Write a Good Property Description
-Make a one-time investment and engage a professional photographer to take good photographs of your property.
-Most tenants search for a rental property on mobile devices. You have to impress them with the first photograph or else they will scroll further to look for another property.
-Take time to write a good property description. The advertisement alone will not get good tenants. An eloquent and substantial description of the property and good professional photographs will.
-Investing money and spending time writing a good property description is a one-time investment. They will pay every time you put up your property for rental.
Invest in Your Property
Investing in the property and keeping it in shape will attract good tenants. Install heating and cooling systems and a dishwasher.
Repaint the property, install good quality blinds and make sure the floor is in prime condition.
All this will ensure that you attract and keep good quality tenants over longer tenures of leases.
Maintain Your Property
Maintain your property throughout the tenure of the tenancy. Small maintenance works that you put off will, in the long run, cost you a lot more to put right.
You have to make sure that your property does not deteriorate and take up maintenance works promptly as they come along.
Good quality tenants will renew their rentals if you maintain your property well and save you the money you will have to spend on advertising for new rentals.