Becoming a lessor (landlord) can be a daunting, yet exciting experience. However, if you engage the services of a professional agency and property manager, the worry and challenges are significantly minimised. The following information is supplied to assist you with general information about the responsibilities and rights of a lessor.
Using an Agent / Property management
Rental bonds
Tenancy Disputes
Maintenance and access
Using an agent/property management
One of the main advantages of using a professional to manage your investment property is peace of mind. Qualified property managers know the marketplace, ensuring you receive maximum returns on your investment. They also have an understanding of relevant legislation and paperwork that is required under the Residential Tenancies and Rooming Accommodation Act.
The world of property management can be quite complex with legislation affecting the everyday workings of a tenancy and lessor relationship. For example: the Privacy Act, Anti-discrimination Act, Trade Practices Act, and the Residential Tenancies and Rooming Accommodation Act.
Using a property manager from a REIQ accredited agency to manage your property alleviates you from the pressure of having to deal with tenancy issues. Property managers negotiate rents and leases on your behalf, sign and complete all documentation required by legislation, attend to maintenance issues, organise quotes, complete routine inspections, attend to the payment of maintenance accounts, disburse funds to you monthly or twice monthly, provide you with a written financial statement of your rental funds, complete final inspections when your tenants vacate, plus a range of other activities.
There are many functions of property management that are required to be done that a private lessor may not be aware of. The skill and expertise of an agent will reduce the risk of non-compliance with the law and save you as the investor from facing the possibility of financial penalties through non-compliance.
An agent is required by the Property Agents and Motors Dealers Act (PAMD Act) to have you sign your instructions in the form of an Appointment of Agent - Letting and Property Management (PAMD 20a) when you engage their services to let and manage your investment property. The Real Estate Institute of Queensland (REIQ) produces a standard Property Management Schedule that forms part of the PAMD Form 20a agreement. The agent is not able to carry out any act or duty on your behalf until you have signed a PAMD Form 20a with the agent.
Rental bonds
A bond is not required to be taken by legislation however it is deemed best practice, and sound risk management, that one is taken and most real estate agents will ensure that your tenant pays the maximum amount of bond. The maximum amount of bond payable for a property $700 per week or less is four times the weekly rent.
The lessor/agent receiving the rental bond MUST forward the bond onto the Residential Tenancies Authority (RTA) within 10 days as per legislative requirements. The bond is a security deposit in the event that the tenant does not meet their obligations under the tenancy agreement. For example: if they damage the property, or if they fail to pay rent up until vacate date. If the property is returned in the same condition as they found it as per the entry condition report, fair wear and tear excepted, they have met all their tenancy agreement obligations and the rent is paid in full up until vacate date, the bond has to be refunded to the tenant.
It is important to understand that the bond money does not automatically become the owner's money when it is paid by the tenant at the beginning of the tenancy. It remains the tenant's money, held in trust by the RTA until the tenancy ends.
If the weekly rent is more than $700 per week, there is no limit on the amount of bond that can be charged.
.Tenancy disputes
Should a tenancy dispute arise it is important to remember that being patient and trying to see your tenant's point of view may resolve the matter more quickly. Often tenants and lessors can resolve their disputes by referring to their rights and responsibilities as set out in the Residential Tenancies and Rooming Accommodation Act.
If the dispute continues, however, the RTA's dispute resolution service may help. A request for dispute resolution can be made by lodging an RTA Form 16 (dispute resolution request) with the RTA. If the parties cannot reach an agreement with the help of the RTA, an application can be made to the Queensland Civil and Administrative Tribunal (QCAT) for an order about the dispute. Your property manager commonly represents you in a dispute. For more information contact:
Residential Tenancies Authority (RTA)
33 Herschel Street OR GPO Box 390
Brisbane QLD 4001
Ph: 1300 366 311
Fax: 07 3361 3666
Website: www.rta.qld.gov.au
Queensland Civil and Administrative Tribunal (QCAT)
Level 9
Bank of Queensland Centre
259 Queen Street
Brisbane
Ph: 1300 753 228 between 8.30am and 5.00pm
For callers outside of Brisbane if you wish to talk to someone about a residential tenancy dispute, contact your local Magistrates Court.
Maintenance and Access
Lessors are responsible for all maintenance on a property under the Residential Tenancies and Rooming Accommodation Act. Regular upkeep and maintenance on your investment property is vital to ensure that you receive maximum returns on your investment property and also assists in securing longer term, happier tenants. It also greatly assists risk management. Longer term tenants cause less wear and tear to the property.
The Residential Tenancies and Rooming Accommodation Act states that while a tenancy continues, the lessor:
- must maintain the premises in a way that the premises remains fit for the tenant to live in;
- must maintain the premises and inclusions in good repair;
- must ensure any law dealing with issues about health or safety of persons using or entering the premises is complied with; and
- if the premises includes a common area, they must keep the area clean.
It is important for lessors to understand that if they supply an inclusion such as a dishwasher or air conditioner in the property when a tenant begins renting the property, that they must maintain it. Some lessors believe that if the appliance breaks down that they don't have to fix it. However, if it does break down the lessor must repair or replace the item or they may negotiate a rent decrease due to a loss of an amenity.
Agents ensure that they are using the services of a suitably qualified, insured tradesperson.
Most real estate agents may request the tenant to advise of any routine maintenance in writing to their agency. This is best practice for both parties. The definition of routine repairs according to the Act is "routine repairs" are repairs that are not emergency repairs.
The meaning of emergency repairs as per the Residential Tenancies and Rooming Accommodation Act are works needed to repair any of the following:
- a burst water service
- a blocked or broken lavatory service
- a serious roof leak
- a gas leak
- a dangerous electrical fault
- flooding or serious flood damage
- serious storm, fire or impact damage
- a failure or breakdown of the gas, electricity or water supply to premises
- a failure or breakdown of an essential service or appliance on premises for hot water, cooking or heating
- a fault or damage that makes premises unsafe or insecure
- a fault or damage likely to injure a person, damage property or unduly inconvenience a resident of the premises
- a serious fault in a staircase, lift or other common area of premises, that unduly inconveniences a resident in gaining access to, or using, the premises.
Routine repairs are any matter other than the above mentioned. The lessor/agent must attend to routine maintenance within a reasonable timeframe. If the lessor or tenant has any concerns or questions in relation to maintenance, they can contact the RTA on 1300 366 311.
Emergency maintenance must be attended to immediately. The tenancy agreement has provision for giving the tenant instructions on whom to contact if the emergency occurs out of hours. The Act also has provision for the tenant to spend up to two (2) weeks' rent on an emergency repair if the lessor/agent does not respond to the emergency repair within a reasonable timeframe or the tenant is unable to notify the lessor/agent.
Most agents inspect rental premises every three to four months as per their professional duty to the lessor and to ensure that the premises are maintained in a reasonable condition. The lessor/agent has to give no less than seven days written notice on the RTA-approved Form 9, (entry notice) the amount of notice needed depends on the reason for entering the premises.
The minimum notice periods are:
- to inspect the premises - seven days (lessor/agent allowed to enter no more than once in a three month period, unless the tenant agrees)
- to complete routine repairs or carry out maintenance - 24 hours
- to inspect after repairs or maintenance has been carried out - 24 hours' notice
- if you agree; anytime by negotiation
- to repair or carry out maintenance where the premises is in a remote area and there is a shortage of qualified tradespersons in the area - no notice
- in an emergency, or to protect the premises from damage - no notice
- if the lessor/agent believes that the premises is abandoned - 24 hours
- to show the premises to a prospective tenant or buyer or for valuation purposes - 24 hours ( if the property is for sale, a Form 10 - notice of lessor's intention to sell must have been issued)
- by order of the Queensland Civil and Administrative Tribunal - as stated in the order.
- if during a routine general inspection, a notice to remedy has been issued to a tenant for a "significant breach", a 24-hour re-entry notice can be issued to ensure the breach has been remedied. The re-entry must be done within 14 days of the expiry of the notice to remedy
- a significant breach is: the tenant using the premises for an illegal purpose; unapproved occupants; unapproved pets; another matter, if the cost of rectifying that matter exceeds one weeks' rent.
The parties may wish to negotiate a time that is suitable to everyone. If entry is for a lawful purpose, the correct notice has been given, and the entry is at a reasonable time the tenant cannot refuse entry. Under the Act, the tenant does not have an automatic right to be present when the lessor/agent enters. If you have any concerns or questions regarding entry contact the RTA.
It is important for the lessor to understand that if the agent has inspected the property for a routine inspection within the three month timeframe that they too cannot inspect until the time lapses, unless the tenant agrees to the inspection.
For more information regarding lessor and tenant responsibilities, visit the Residential Tenancies Authority website at www.rta.qld.gov.au or phone 1300 366 311 or refer to a REIQ accredited agency.
