Owner Information
Do you own an Investment Property?
It is important for an Investment Owner to ensure that they are covered and to minimise risk when renting out their property. Issues that may arise during the tenancy could result in Tenants seeking compensation, loss of income or further legal charges. Some important regulations include:
What would you like to know more about?
- Fire Safety/Smoke Alarms
- Repairs
- Rent
- Rent Increase
- Gas Water Heaters
- Swimming Pools
- Water and Sewerage Charges
- Privacy and Access
- Locks and Security
- The Consumer Trader and Tenancy Tribunal
Fire Safety
Smoke alarms are compulsory in all properties. Smoke alarms can be hard-wired by an electrician. This is the recommended type of smoke alarm. With battery-operated alarms, Tenants are responsible to replace batteries. Check out the Office of Fair Trading website for more information
Repairs
Landlord’s General Responsibilities
The Landlord must make sure that the premises are reasonably clean, and fit to live in at the start of the tenancy. The Landlord must then maintain the premises in a reasonable state of repair considering:
- The age of the premises.
- The amount of rent the Tenant is paying.
- The prospective life of the premises.
This does not mean that the premises must be let in perfect condition, or that the Landlord must immediately attend to every small matter during the tenancy. The state of the property and level of repair expected should be in proportion to the premises’ age and the amount of rent paid.
Urgent Repairs
Landlords are obliged to organise any urgent repair, as soon as reasonably possible, after having been notified by their agent of the fault or damage to the Property.
An urgent repair is any work needed to fix:
- A burst water service
- A blocked or broken toilet system
- A serious roof leak
- A gas leak
- A dangerous electrical fault
- Flooding or serious flood damage
- Serious storm
- A failure or breakdown of the gas, electricity or water supply to the premises
- A failure or breakdown of any essential service on the premises for hot water, cooking, heating or laundering.
- Any fault or damage that causes the premises to be unsafe or not secure.
Responsibilities of Tenants over the premises
Under the Act the Tenant must keep the premises in a reasonable state of cleanliness, having regard to the condition of the premises at the start of the tenancy. If the premises include a yard, the lawns, edges and gardens must also be kept neat and tidy by the Tenant.
Tenants must notify the Landlord or agent of any damage to the premises as soon as practicable, regardless of who or what caused the damage. It is recommended that this notice be put in writing. Tenants can spend up to $500 on urgent repairs and be reimbursed within 14 days by the Landlord. The Landlord or agent must be first given a reasonable opportunity to arrange the work, or if they cannot be reached, any properly qualified tradesperson nominated in the agreement should be contacted.
The Tenant must not intentionally or negligently cause or permit damage to the premises. Negligence means forgetting to do something which a reasonable person would usually do in the circumstances, or doing something which a reasonable person would not do. In simple terms it is a lack of care or attention. A Tenant is also responsible for damage caused by other occupants of the premises or any person the Tenant allows on the premises.
Changes to a Property
A Tenant cannot, except with the Landlords written permission attach any fixture or make any renovation, alteration or addition to the premises. This ranges from small items such as installing picture hooks, adding locks or having telephone sockets installed, to larger matters like painting the whole premises.
Rent
The level of rent is agreed upon before the tenancy begins, and the figure is written in the space provided on the tenancy agreement. Rent payments are GST free.
Rent Increase
Rent may be increased after the fixed term period of the agreement has expired. Before a Landlord (other than the Department of Housing) can increase the rent the Tenant must first be given at least 60 days (plus 4 working days postage) notice in writing. The notice must show the amount of the increased rent and the day from which the increased rent is to be paid. This also applies where an existing agreement is to be renewed.
For rent to increase during a fixed term tenancy the agreement must have an additional term showing the amount of the increase and date increase is due to take effect. Please note 60 days notice must be given notice.
Gas Water Heaters
Gas water heaters that have not been properly maintained have been responsible for deaths and serious injury. If you have a gas heater or flued instantaneous water heater it could be a source of danger. Landlords are obliged to ensure that fixed appliances are safe.
Swimming Pools
The law requires spa outlets and spa potty skimmer boxes to meet certain design, construction, testing and labeling requirements.
A lid for a potty style skimmer box must carry the following warning: WARNING: LID IS NOT TO BE REMOVED WHILE SPA IS OPERATING.
Swimming pool main drain covers
Fair Trading Act, Section 31 Order. Gazette No. 86, 18/5/01.
Covers designed or adapted for use as a domestic in-ground swimming pool outlet cover must comply with clause 5.1(a) of Australian Standard AS 1926.3-1993, Swimming pool safety Part 3: Water reticulation and filtration systems. They cannot be removed without using a tool and must satisfy requirements for suction point covers, to prevent trapping body parts.
Covers must also form a dome-shaped surface over the outlet when fitted and be designed so that they are anti-vortex covers, ie to prevent the circular or swirling motion of water forming a vacuum or suction action.
Swimming pool outlets
Fair Trading (General) Regulation 2002. Gazette No. 135, 30/8/02.
Swimming pool outlets that are potty skimmer boxes must meet certain performance criteria and other requirements for standard skimmer boxes in Australian Standard AS 1926.3 - 1993 - Swimming pool safety - Part 3: Water recirculation and filtration systems.
Pool Safety Standards Pool safety standards apply to pools and spas located on small residential premises (less than 1.8 hectares). Under the Swimming Pool Safety act there is one standard for pools installed since 1 January 2003
The modified Australian Standard
Under the Swimming Pool Safety act there is one standard for pools installed prior to 1 January 2003
The Community Safety Standard
However, owners of pools or spas installed prior to 1 January 2003 may choose to comply with the modified Australian Standard.
Community Safety Standard – for pools and spas constructed prior to 1 January 2003
The new Community Safety Standard requires a pool owner to self declare that their pool or spa is enclosed by a barrier that will effectively prevent a child under five years of age from obtaining unsupervised access to a pool area. Under the Community Safety Standard your neighbour’s property will not affect your pool or spa’s compliance. If a shared boundary fence is being used as part of your pool barrier, you are required to notify your neighbour in writing that a pool is next door.
Owners of pools or spas constructed before 1 January 2003 will need to meet the new minimum standard at property sale or change of lease. They may need to meet the new standard at transfer.
Owners of pools and spas constructed after 1 January 2003 must comply with the modified Australian Standard within seven days after the completion of their pool and before the pool is filled deeper then 300mm. Owners of earlier pools may also choose to meet the modified Australian Standard.
With respect to swimming pool fencing, the Australian Standards are directed at obtaining a barrier that will make it difficult for a young child to gain access to a pool area, whether under, over or through the fencing.
There are numerous regulations with regards to swimming pool fencing, including the height of the fencing, isolation, vegetation and other factors. It is best to seek professional advice to ensure your pool meets all safety requirements and legal standards to avoid legal liability.
Water and Sewerage Charges
Service Charges
Landlords are responsible to pay all service charges for water and sewerage issued by the local water supply authority.
Water Usage
Tenants can be asked to reimburse the Landlord for the water usage component. Under no circumstances can connection fees be passed on to the Tenant.
The ’water usage’ charge which appears on the Landlord’s bill for the rented premises is for the total amount of water which flows through the water meter on the property.
A Tenant can only be charged for the metered amount of water which they use. For this reason it is important that the water meter be read and the figure noted on the premises condition report before the start of each tenancy.
If there is no individual meter for the rented premises, as is the case with most blocks of units, a Tenant cannot be charged for water usage. If the supply authority has a minimum amount payable for all properties the Tenant does not have to pay for water. A Tenant is entitled to a photocopy of the water account.
Privacy and Access
Privacy
Tenants have a basic right to privacy and quiet enjoyment of the premises that must be respected by their Landlord.
The Landlord must make sure they, or anybody else on their behalf, do not interrupt the Tenant’s reasonable peace, comfort and quiet enjoyment of the premises.
Access and Inspections
The Landlord, agent or any person authorised by the Landlord may enter the premises only in the following circumstances:
- To carry out a general inspection of the premises if the Tenant is given at least 7 days notice. There can be no more than 4 inspections in any 12 month period.
- To carry out necessary repairs if the Tenant is given at least 2 days prior notice. The repairs must be necessary and must not simply be improvements or renovations. For urgent repairs no notice is necessary.
- To show the premises to prospective Tenants on a reasonable number of occasions if the Tenant gets reasonable notice on each occasion. This access is only permitted during the final 14 days of the tenancy.
- To show the premises to prospective buyers, on a reasonable number of occasions if the Tenant gets reasonable notice on each occasion. What is ‘reasonable’ is for the parties to agree upon. The Tribunal can settle any disputes if one party believes the other is being unreasonable. Access to show buyers can occur at any stage during the tenancy.
- Unless the Tenant agrees, access is not permitted on Sundays, public holidays or outside the hours of 8am to 8pm.
Locks and Security
Reasonable Security
The law states that a Landlord must provide and maintain such locks or other security devices as are necessary to ensure that the premises are reasonably secure. What is ’reasonably secure’ will vary in different situations.
The potential risk (ie. The likelihood the premises may be broken into) will have a bearing on the type and standard of locks needed to make a property reasonably secure. This will depend largely on the area in which the premises are located.
Even then, the standard cannot be applied to all premises within an area. The ability of a thief to gain access to doors and windows can vary from one property to another. For instance, the level of security needed for a ground floor unit will usually be greater than for a unit on an upper level.
A Landlord does not have to make the property so secure that the premises can never be broken into. The requirements of insurance companies are not the test of ’reasonable security’. Insurer’s requirements are merely another factor to be taken into account.
The Consumer, Trader and Tenancy Tribunal
General
The Consumer, Trader and Tenancy Tribunal (CTTT) is an independent decision making body which hears and decides applications for orders from Tenants and Landlord’s. The Tribunal is a quick, inexpensive, and relatively informal way of resolving disputes. Applications may be lodged by post or at any Fair Trading Centre. Hearings are usually held within one month and are conducted at a venue as close as possible to the premises.
Time Limits
There are prescribed time limits for making applications to the Tribunal for certain orders. For example, in cases where an order is requested regarding broken terms of the tenancy agreement, this order should normally be sought within 30 days of becoming aware of the event.
Hearings
The Member will first ask the parties to try to reach a settlement. If this cannot be achieved the case will then be heard in the Tribunal hearing room. The Member will allow both parties, in turn, to tell their side of the events and present any evidence.
Hearings are usually informal, but formal hearings can be held on request, where witnesses can be called and evidence is given under oath. It is up to the person who made the application to provide enough evidence to convince the Tribunal Member, on the balance of probabilities, that the orders they are seeking should be given. Any orders made are binding. Go to the Consumer, Trader and Tenancy Tribunal website for more information
There are many other areas where changing regulations, legislation and Residential Tenancy Tribunal findings can affect investment owners.