FAQ

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The information contained in this page is intended as a general guide for owners, tenants, and anyone else dealing with rental properties in Queensland.

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While every effort is made to keep the information as accurate as possible, it is always advisable to seek confirmation for your particular situation.


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A. Hiring a Managing Agent

Property Management professionals look forward to the time when this is a question of the past, like ‘Why do I need a Solicitor?’ or ‘Why do I need Car Insurance?’

Indeed, you can represent yourself in Court or do your own legal work to save hiring a solicitor. But why would you? A solicitor has access to all the up-to-date legislation and can act as a mediator between you and the other party. Saving solicitor’s fees would inevitably cost you more financially, not to mention the emotional toll it would take on you and your family.

In the same way, you can manage your own property if your goal is to save on agents’ fees. And some owners do a pretty good job of it. After all, it’s all available online. They can advertise for tenants, download all the legal forms, and research what their responsibilities are. In general, these owners have a pretty good relationship with their tenants.

However, we are here to tell you that the honeymoon rarely lasts forever. This is because the relationship between owners and tenants, while it should be purely business, is often fraught with emotion. From the owners’ point of view, the property may be their former family home, or an investment property that they have spent their savings to lovingly renovate. They need the rental income to keep the investment viable, but also are looking for tenants who will respect their property and look after it. From the tenants’ point of view, this is their home where they have chosen to raise their family and they are generally paying the most rent they can afford. They are looking for value for their hard-earned money as well as the assurance to be allowed quiet enjoyment of the property.

Inevitably, life steps in and something goes wrong or one of the parties inadvertently does something wrong. Here are just a few examples:

– The tenant loses their job and becomes late with rent.

– There is an accident at the property.

– There is a break-in at the property.

– The tenant needs to break their lease.

– The owner identifies damages at a property inspection and must negotiate with the tenant to rectify.

– The tenant reports maintenance which is not fixed to their timeline and breaches the owner.

– There is a neighbourhood dispute.

– The owner issues a Notice to Leave at the end of the lease but the tenants don’t leave!

Remember, just as you have access to information and resources, so do tenants. They know their rights, and regardless of how ‘friendly’ your relationship is at the start, it can quickly go wrong when one side feels they have been unfairly treated.

So how can a Managing Agent help?

They are your professional representatives who are trained to deal with any type of situation that comes up. They know the legislation and have access to many resources that property owners don’t (such as Tenancy Default databases). They are trained in record-keeping, dispute resolution, conciliation, marketing, and Tribunal representation. Because they manage many properties, they know the current rental market and can advise you on how to increase your rental income.

And importantly, they do not have an emotional attachment to your property or tenants and can advise you on the best course of action when a difficulty arises. Make no mistake, your Property Manager works for YOU, not the tenant. Their ultimate goal is to maximise your financial return and every solution they bring to you is with this in mind.

The value that a good Managing Agent brings to you is a hundred times the fees that they charge you.

If you have the time and resources to train yourself to be a Property Manager for your portfolio, and are prepared to lose money in rental income or capital growth, and have the emotional steeliness required to evict a family from your property because they are behind in rent, then you should manage your own property.

If, on the other hand, you have a job or business that takes up most of your time, and a family or social life that takes up your spare time, and want to gain maximum rental return and capital growth on your investment property, and want someone else to handle the hassles and paperwork, then you need a Managing Agent.

In order for an Agent to act on an Owner’s behalf to manage their property, they must sign a Management Agreement (Property Occupations Form 6).

This agreement contains all details necessary for an Agent to represent the Owner, including special instructions and fees payable by the Owner.

Without this agreement, an Agent is not permitted to advertise a property, sign a Tenancy Agreement, or manage a property on behalf of an Owner.

The range of services provided by a Managing Agent can be quite extensive. How much you pay and which fees you are charged may depend on which services you require them to perform on your behalf.

When people compare fees, they typically only mention the ‘Management Fee’ which is a percentage of rent collected. However, it is vital to obtain a list of ALL fees and charges so you can make an informed decision as to which agent will provide you value for money.

The following is a list of the most common fees you may encounter when comparing agents, and a rough guide of how much you can expect to pay. Note that GST needs to be added to all figures:

 

  1. Management Fee (for day-to-day management): 7% – 9% of rent collected
  2. Administration Fee (to cover postage, photocopying, bank fees, etc): $5 – $10 per month
  3. Letting Fee (to place new tenants): Equivalent of one week’s rent
  4. Marketing Fee (to cover online portal fees): $50 – $200 when your property is listed online
  5. TICA Database Check Fee (to cover TICA membership fee): $5 – $10 per check
  6. Property Inspection Fee: $20 – $50 per 4-monthly inspection
  7. Lease Renewal Fee (for re-signing tenants): $50 – equivalent of one-half week’s rent
  8. Maintenance Co-ordination Fee: 5% of invoice
  9. Project Management Fee (for a major refurb): 10% of total cost of work
  10. Insurance Claim Processing Fee: $50 flat fee or per hour
  11. Mediation and QCAT Representation: $50 – $100 flat fee or per hour
  12. Meeting Valuer / Representative onsite: $50 – $100 flat fee or per hour
  13. End of Financial Year Statement Fee: $25 – $50 per year
  14. Statement re-print fee: $25 – $50
  15. File Closure Fee (at termination of management): $90 – $200

Everyone wants to know they are getting a good deal – it’s human nature. If you want to ask for a discount, there is no harm in trying!

It is quite common for agents to discount their management fee by 0.5% – 1% if you have multiple properties to hand over to them. This shows good business sense as it encourages client loyalty.

However, many agents will discount their fees just because you ask them – some even before you ask them! You have to question why they do this. Did they inflate their original fee structure so that they can give you a ‘discount’ to get your business? Are they so desperate to win your business and can’t compete with other agents’ service level so instead they cut their fees? Or are they just lousy negotiators and don’t value the service they are offering?

Be extremely wary of agents that offer cheap or discounted fees. They run a business and if income is reduced, they have to cut corners on important items like wages for experienced Property Managers, on-going staff training, software, and marketing. Their staff will be underpaid and overworked, resulting in costly mistakes, high staff turnover, and substandard service.

Just like there are competent and incompetent people in every profession, there are excellent managing agents and useless ones. Hiring an incompetent agent is worse than managing the property yourself because you are led to believe all is being taken care of when it isn’t.

Here’s the problem – Real Estate agents are expert self-promoters – it’s how they win sales listings. They have slick websites and tell you everything you want to hear – how good they are at marketing, finding tenants, arrears management, property inspections.. etc etc.

But you don’t have to take their word for it – it is easy to find out how true any of this is.

Following is a list of 10 things you can actually verify for yourself when choosing a managing agent:

1. What priority does the office place on their Property Management section? 

Check the company website and note as a percentage how much space is devoted to Property Management. You may also notice that this section is placed AFTER the Sales section, indicating that Property Management plays second fiddle to Sales.

2. What kind of staff do they employ in their Property Management Department?

Look at the Property Management Department section on their website and see if they are proud to tell you who works there and provide a photo. Does the staff have the experience and ability you believe they should have? Be aware who will be taking care of your property and ask yourself if this fills you with confidence.

3. Does the Principal/Business Owner know anything about Property Management?

Check their website and read the Principal’s bio. Does it mention any experience in Property Management? Note that the typical real estate office is headed by a Sales Principal who knows very little about managing properties. Even the ‘specialist’ Property Management agencies are often headed by a business person who has never managed a property. Is this important to you? Don’t you think that the head of the company which manages your property should know what is involved and be able to train their staff accordingly?

4. How effective is their marketing?

Check online to see how they advertise rental properties. Look for any errors in the text or inadequate descriptions. Look at all the photos and rate how they present the property. Would you like your property to be advertised like this to potential tenants?

5. How easy is it to apply for a rental property?

Do some ‘mystery shopping’ and make an enquiry with one of their available rental properties. You can see from the tenant’s point of view if the agent makes it an easy process and provides professional service that reflects your valuable investment.

6. How many vacant properties do they have?

Look at the availability date of all of the agency’s rental listings. ‘Available Now’ means the property is vacant and the owner is losing rental income. In most cases, properties should be advertised well before the tenants vacate, so that tenants can be secured BEFORE the property is vacant. If a high proportion of the agency’s properties on the rental market are actually vacant, this is a tell-tale sign of a lack in the agency’s procedures, pro-activity, and efficiency throughout the office. It also means that your property may remain vacant for longer than it should be.

7. How efficient is their office?

Your initial enquiry into the agency’s property management services is the first test of whether procedures are in place and working. Is your enquiry answered within 24 hours? Are all your questions answered professionally and truthfully? Do they follow through with what they say they will do? Do they follow up after the first contact? If this is not done when you are a POTENTIAL client, how can you expect any more once you are an ACTUAL client?

8. What do their clients say about them?

Most agencies feature testimonials on their websites. Unfortunately, you need to be wary of the authenticity of these, but you can spot the genuine ones. Look for a common theme, simple non-industry specific language, and an underlying emotional content. And look for the number of posts – there should be at least 20.

9. How ‘Tech Savvy’ are they?

Technology has revolutionised our industry, enabling Property Managers to provide a higher standard of service and complete their duties more efficiently. Your best representative will be the one who has kept up with these changes. Is the agency’s website kept up to date? Can you see recent blogs or newsletter articles? Do they offer an online portal where you can access information about your property 24/7? Do they use an online inspection booking system that tracks all rental enquiries so you don’t miss out on good tenants?

10. What kind of negotiators are they?

A good agent will negotiate on your behalf to get the highest rental price from the best tenants, the most competitive price from contractors, and the best outcome in tenancy dispute matters. All you need to ask an agent is ‘Will you discount your fees?’ If they do, they are telling you that they do not value their own service and they are lousy negotiators.

B. Marketing

Once a property is advertised for rent, tenants contact the Agent to arrange a time to view the property. Some agents hold ‘Open Homes’ when the property is vacant. To work more efficiently, most agents will try to tie in as many prospects as possible into one viewing.

If a tenant wishes to apply for a property, they fill out an application form provided by the Agent. They must provide details such as current address, employment, number of occupants and pets. They must also provide documentation to prove identification, income, and current address.

The agent should process the application and ensure it passes their criteria before presenting it to the owner for their approval.

Absolutely.

Advertising of rental properties is largely misunderstood by the Real Estate industry. They rate Rental listings as second-rate to Sales listings, presumably due to the difference in commissions involved. While every care is taken with photographing Sales properties, most Rental property ads use amateur photos taken by the Property Manager on their smart phone.

The result is a substandard ad that does not show your property is its best possible light, thereby not attracting as much interest as it should from potential tenants. This can lengthen the vacancy period and/or reduce the rental price.

Furthermore, good advertising and professional photos work on a much deeper level. A rental ad communicates more to the potential tenant than just rent price and features; it provides an introduction to the agency, property and owner. If the ad is poor quality, it tells the tenant that the agency has low standards, the property is probably not well-maintained, and the owner doesn’t care about his property. This type of ad actually deters good quality tenants. Conversely, a quality ad with good, clear professional photos attracts a quality tenant who is looking for a good agency and owner who cares about their property. It also conveys to the tenant that the owner and agent expect the property to be kept to a high standard during the tenancy.

Professional photos are not expensive – between $120 and $200 – and the beauty is that they can be used over and over again, whenever you are looking for tenants. For such a small investment, professional photos are a must.

These days, 98% of tenants look to the internet to find their next rental property.

As a result, Managing Agents have had to become expert online marketers to attract the best tenants for the highest possible rental price with the least possible vacancy period.

There are several real estate websites that agents can advertise through – including domain.com.au, rent.com.au and realestateview.com.au. However, the website realestate.com.au is by far the largest player and all agents tend to advertise on this website.

Many tenants who have had a good experience with an agent will try to move to another one of their agent’s managed properties. This is quite common with larger agencies that manage over 500 properties because there is sufficient variety of stock to offer the tenant.

C. Starting a Tenancy

Your investment property is a valuable asset which generates an income stream. You need to consider carefully what would happen if that income stream suddenly ceased.

This could happen for a number of reasons, but mostly due to the ‘human factor’. A rental income is never guaranteed. You could have the best tenants in the world, but if their circumstances changed and their income stopped, chances are that their rent will fall behind. And you could have the best Property Manager in the world, but no-one can get blood out of a stone.

Landlord Protection Insurance is designed specifically to cover property Owners for unforeseen losses. The two main areas covered are loss of rent and damage caused by tenants.

Landlord Protection Insurance is very cost effective – around $300 per year for a good policy. But be careful – policies vary greatly with what they offer and the cheap ones are often not worth the paper they are written on.

Click here for more specific information on how to choose the best policy.

Because the Property Owner carries the financial investment, they make the final decision on approving tenants.

The agent’s job is to find potential tenants and check out their suitability for each property. If the tenant meets the agency’s criteria, the Property Manager should then present the application to the Owner for approval.

The Owner is not obligated to give a reason for their decision to approve or decline an application.

There is quite a lot pf paperwork involved with placing a new tenant, and your Agent takes care of it all for you.

The three most important documents are:

  1. General Tenancy Agreement (RTA Form 18a) – Commonly known as the ‘Lease’, this details the lease period, rent amount, and who is permitted to live at the property. It also outlines any special conditions of the lease, inclusions, exclusions, and other instructions to the tenant.
  2. Bond Lodgement Form (RTA Form 2) – This must be filled out and sent to the Bond Authority, along with the Bond money.
  3. Entry Condition Report (RTA Form 1a) – This is a comprehensive report detailing the state of the property and its fixtures at the start of the tenancy. For a standard 4-bedroom home, a properly executed ECR should take at least 3 hours.

Once a property is advertised for rent, tenants contact the Agent to arrange a time to view the property. Some agents hold ‘Open Homes’ when the property is vacant. To work more efficiently, most agents will try to tie in as many prospects as possible into one viewing.

If a tenant wishes to apply for a property, they fill out an application form provided by the Agent. They must provide details such as current address, employment, number of occupants and pets. They must also provide documentation to prove identification, income, and current address.

The agent should process the application and ensure it passes their criteria before presenting it to the owner for their approval.

A rental bond is a security deposit paid by the tenant at the start of a tenancy. It is held by the RTA and is paid back to the tenant at the end of the tenancy provided no money is owed for rent, damages or other costs.

It is not compulsory to take a Bond – however, it is common practice for agents to do so, as it provides a kind of insurance to the owners in case any money is owed at the end of a tenancy.

The Department of Housing provides Bond Loans to tenants who are on a low income, providing they meet certain criteria. Most agents will accept Bond Loans.

Once tenants are approved for a rental property, they can apply for a Bond Loan. The process can take several days as the tenants must first go through an approval process, and then paperwork needs to be signed by all parties.

If the loan is approved, the Department of Housing pays the bond in full on the tenant’s behalf, so as far as the owner is concerned, it is secured funds. The tenant then enters into a payment plan with the Department of Housing.

Recently, we have seen the emergence of private finance companies who specialise in rental bond loans. One such company is ‘Easy Bondpay’. They work with managing agents and will pre-approve a bond loan for any tenant that the agent approves. For more information click here.

An Agent has a Duty of Care to both tenants and their Owner clients, to ensure that a Tenant moving into a property is on sufficient income to afford the rent.

But what is deemed to be ‘sufficient’? There are many variables associated with this, because everyone’s situation is different.

Many agents use a simple calculation that is often used by the banks to determine if an applicant can make repayments on a house loan. They take the total income for all the tenants applying for the property and divide it by three. If this works out to be more than the weekly rent, they consider the affordability to be good.

While this can be a good rule of thumb, it can exclude a proportion of the tenant population who have a relatively low income but a good rental payment history. These tenants have shown that they are able to budget effectively and prioritise their rental payments. They may have fewer expenses – for example, no car payments or school fees. Therefore, a tenant’s rental history in these cases becomes very important when an Agent is trying to work out rent affordability.

Likewise, a tenant may have a relatively high income – but if their rental history shows a habit of late payments, the agent will most likely not approve this application.

If a tenant is applying for their first rental property, and they are on a low income, they may need to start with a low-priced property, or move in with friends who can help them pay their rent. Once they start to build up a good rental history, they will have more flexibility in future leases.

Most Agencies require tenants to pay their first 2 weeks rent before they move into a property. This is not a ‘down payment’ or a ‘holding fee’ or a ‘deposit’. It is your first 2 weeks’ rent payment.

Many tenants are under the impression that this payment is somehow ‘held’ by their agent in a separate account, and at the end of the tenancy they can ask the agent to now ‘use’ these funds to pay their last 2 weeks rent.

This is a common misunderstanding and in fact is the number one cause for disagreement between agents and tenants at the end of a tenancy.

This is what actually happens. A tenant pays his first 2 weeks’ rent and moves in on 1st March. This money is receipted as rent from 1st March to 14th March. It appears on his rent ledger. What normally happens is that the tenant will make his next rent payment on or around 15th March, for the next week or 2 weeks. This is receipted as rent from 15th March… and so it goes on.

If the tenant wishes to make use of the ‘2 weeks rent in advance’ that he paid up front for the end of his lease, he would need to make his second payment on 1st March (as soon as he moved in), and continue to make regular payments until the end of this lease. This would mean that during the tenancy, his rent would be at least 2 weeks in advance at all times.

The best way for you as a tenant to check if you are ahead in your rent payments is to ask for a rental ledger. This ledger is a true and accurate account of all rental payments you have made to the agent INCLUDING THE FIRST 2 WEEKS RENT IN ADVANCE. If you see that you are not 2 weeks ahead, you need to look at all the payments you have made since moving in and the corresponding period that the payment refers to. Remember – the agent is not ‘holding’ any of your money. (This is actually illegal!).

If you believe that you have made an extra payment that is not shown on your ledger, you will need to contact your agent and provide proof of this payment. If the funds have gone missing, you may need to request a trace with your bank to find what has happened to the funds.

Outdoor pools and spas at all rental properties must be fenced according to strict safety standards. All pool fences must be checked and certified by a licensed pool fence safety inspector and registered with the Queensland Government.

This certificate must be renewed every two years.

For more detailed information:

Queensland Government Website Page – Pool Safety.

Pool Safety Brochure

Section 185 of the RTRA Act is clear and specific regarding Owners’ obligations to maintain the property throughout a tenancy.

RTRA ACT – SECTION 185 – Lessor’s obligations generally

(2) At the start of the tenancy, the lessor must ensure—

     (a) the premises and inclusions are clean; and

     (b) the premises are fit for the tenant to live in; and

     (c) the premises and inclusions are in good repair; and

     (d) the lessor is not in breach of a law dealing with issues about the health or safety of persons using or entering the premises.

(3) While the tenancy continues, the lessor—

     (a) must maintain the premises in a way that the premises remain fit for the tenant to live in; and

     (b) must maintain the premises and inclusions in good repair; and

     (c) must ensure any law dealing with issues about the health or safety of persons using or entering the premises is complied with; and

     (d) if the premises include a common area—must keep the area clean.

Absolutely.

Advertising of rental properties is largely misunderstood by the Real Estate industry. They rate Rental listings as second-rate to Sales listings, presumably due to the difference in commissions involved. While every care is taken with photographing Sales properties, most Rental property ads use amateur photos taken by the Property Manager on their smart phone.

The result is a substandard ad that does not show your property is its best possible light, thereby not attracting as much interest as it should from potential tenants. This can lengthen the vacancy period and/or reduce the rental price.

Furthermore, good advertising and professional photos work on a much deeper level. A rental ad communicates more to the potential tenant than just rent price and features; it provides an introduction to the agency, property and owner. If the ad is poor quality, it tells the tenant that the agency has low standards, the property is probably not well-maintained, and the owner doesn’t care about his property. This type of ad actually deters good quality tenants. Conversely, a quality ad with good, clear professional photos attracts a quality tenant who is looking for a good agency and owner who cares about their property. It also conveys to the tenant that the owner and agent expect the property to be kept to a high standard during the tenancy.

Professional photos are not expensive – between $120 and $200 – and the beauty is that they can be used over and over again, whenever you are looking for tenants. For such a small investment, professional photos are a must.

This is a tough question to answer because it’s totally up to the owner. Allowance of pets is one of the few things against which you are legally allowed to discriminate (unless of course the pet is an assistance pet such as a seeing eye dog).

Firstly, we have to clarify that not all properties should take pets. Most units and some townhouses restrict pets in their Body Corporate rules, and some houses don’t have the space or facilities to cater for larger pets. Furthermore, properties with exceptional gardens that may not withstand a boisterous dog should place restrictions on the type of pet allowed.

Having said that, there are many rental properties that are quite suited to keeping a pet.

The main concern that owners have with allowing a pet is the potential damage or extra wear and tear that may be caused, both inside and outside the property. While this is a valid concern, it is important to understand that the way a pet behaves at a property is a direct result of its owners. Therefore, if a tenant has a good rental history with good references, it follows that their pets will behave accordingly.

But why should an owner consider pets if they pose a certain risk?

The simple fact is that many tenants have pets, and by excluding pets you may be restricting your potential market by as much as 70% of the population. This may have an effect on the rental price you wish to achieve. Furthermore, when choosing a tenant, you have to weigh up all sorts of factors including how many people will be living at the property, their income, rental references, and stability. It would be unwise to overlook good quality tenants simply because they have a pet. Furthermore, ownership of a pet can often indicate a responsible and stable person.

To minimise the risk of damage by pets, we always recommend to NOT allow a pet inside the home; and regular inspections by your Property Manager will show very quickly if any damage or excess wear is being caused by the pet.

Processing tenant applications is an important task which, if not done properly, can result in a high-risk tenant being placed in your property.

An agent should have a set list of criteria for approving tenants which should be openly advertised and adhered to by all team members. They should have a processing checklist to follow so that no step is missed.

The following should be verified by documentation and written references:

  • – Identification
  • – Tenancy Default Database check
  • – Income
  • – Stability of employment
  • – Current rental reference
  • – Previous rental references
  • Generally it takes 24 hours to process an application because the agent needs to wait for references to come back.
  • In a general tenancy, the maximum bond that a tenant should pay is equivalent to 4 weeks’ rent if the rent is $700 a week or less.
  • If the rent is more than $700 a week there is no limit on the bond.

A Lease can be written for any period of time, as long as both parties (owner and tenant) agrees.

A standard lease term appears to be 12 months; however, often a 6-month lease is negotiated to suit either party. We often recommend to our owners to sign up new tenants on a 6-month lease as a ‘trial period’. If all goes well, we then proceed to a 12-month lease renewal.

We recommend to our owners to avoid locking themselves into a lease for longer than 12 months.

These days, 98% of tenants look to the internet to find their next rental property.

As a result, Managing Agents have had to become expert online marketers to attract the best tenants for the highest possible rental price with the least possible vacancy period.

There are several real estate websites that agents can advertise through – including domain.com.au, rent.com.au and realestateview.com.au. However, the website realestate.com.au is by far the largest player and all agents tend to advertise on this website.

Many tenants who have had a good experience with an agent will try to move to another one of their agent’s managed properties. This is quite common with larger agencies that manage over 500 properties because there is sufficient variety of stock to offer the tenant.

No, they don’t.

A Management Agreement states that the agent can sign official RTA forms on the owner’s behalf. Therefore, where there is provision for the ‘Owner’ to sign, the Agent signs as their representative.

When searching for a rental property, you may find that different agencies handle the application process differently. This may be dependent on their internal processes, staffing levels, type of properties, or current market conditions.

Most agencies prefer you to view the property before you submit an application form. In this way, you can save time by applying for the properties that you are definitely interested in.

Some agencies require you to submit an application form BEFORE you view the property. These agencies will advise you of this up front.

The short answer is ‘No’.

Rental property owners are subject to anti-discrimination laws that state you cannot refuse a tenant based on such factors as religion, sex, and age.

If your property is more suited to a certain section of the community – such as retirees or families – this should be promoted in the advertising which will make your property more attractive to these types of tenants.

The General Tenancy Agreement (‘Lease’) is a legal document that is governed by strict legislation.

If a special condition is added that contradicts the legislation, the legislation overrides the special condition which becomes null and void.

Owners should therefore be very careful about what special conditions are written into lease agreements, and how to word them. You should engage a solicitor to word these, as an Agent is not qualified to do so.

In some states in Australia, it is common practice to take a ‘Pet Bond’ which can be used at the end of the lease to pay for any damage caused by pets.

in Queensland we are NOT permitted to take extra bond money for pets.

D. Lease Agreement

There is quite a lot pf paperwork involved with placing a new tenant, and your Agent takes care of it all for you.

The three most important documents are:

  1. General Tenancy Agreement (RTA Form 18a) – Commonly known as the ‘Lease’, this details the lease period, rent amount, and who is permitted to live at the property. It also outlines any special conditions of the lease, inclusions, exclusions, and other instructions to the tenant.
  2. Bond Lodgement Form (RTA Form 2) – This must be filled out and sent to the Bond Authority, along with the Bond money.
  3. Entry Condition Report (RTA Form 1a) – This is a comprehensive report detailing the state of the property and its fixtures at the start of the tenancy. For a standard 4-bedroom home, a properly executed ECR should take at least 3 hours.

This is a tough question to answer because it’s totally up to the owner. Allowance of pets is one of the few things against which you are legally allowed to discriminate (unless of course the pet is an assistance pet such as a seeing eye dog).

Firstly, we have to clarify that not all properties should take pets. Most units and some townhouses restrict pets in their Body Corporate rules, and some houses don’t have the space or facilities to cater for larger pets. Furthermore, properties with exceptional gardens that may not withstand a boisterous dog should place restrictions on the type of pet allowed.

Having said that, there are many rental properties that are quite suited to keeping a pet.

The main concern that owners have with allowing a pet is the potential damage or extra wear and tear that may be caused, both inside and outside the property. While this is a valid concern, it is important to understand that the way a pet behaves at a property is a direct result of its owners. Therefore, if a tenant has a good rental history with good references, it follows that their pets will behave accordingly.

But why should an owner consider pets if they pose a certain risk?

The simple fact is that many tenants have pets, and by excluding pets you may be restricting your potential market by as much as 70% of the population. This may have an effect on the rental price you wish to achieve. Furthermore, when choosing a tenant, you have to weigh up all sorts of factors including how many people will be living at the property, their income, rental references, and stability. It would be unwise to overlook good quality tenants simply because they have a pet. Furthermore, ownership of a pet can often indicate a responsible and stable person.

To minimise the risk of damage by pets, we always recommend to NOT allow a pet inside the home; and regular inspections by your Property Manager will show very quickly if any damage or excess wear is being caused by the pet.

A Lease can be written for any period of time, as long as both parties (owner and tenant) agrees.

A standard lease term appears to be 12 months; however, often a 6-month lease is negotiated to suit either party. We often recommend to our owners to sign up new tenants on a 6-month lease as a ‘trial period’. If all goes well, we then proceed to a 12-month lease renewal.

We recommend to our owners to avoid locking themselves into a lease for longer than 12 months.

A Lease Agreement can be signed by several tenants. Each tenant takes on equal responsibility for the Lease Agreement.

A Change of Shared Tenancy is where the tenants’ names on a lease agreement are changed due to tenants moving out and/or moving in. This can occur for any number of tenants moving, as long as at least one of the original tenants remains on the lease.

Changing names on a Lease Agreement can be quite an involved procedure. It requires documentation to be signed by all parties, as well as the approval from the Owner of the property.

The procedure essentially entails transferring the responsibility of the tenancy from one or more tenants to another.

For information on how Solutions manages this process, please click HERE.

No, they don’t.

A Management Agreement states that the agent can sign official RTA forms on the owner’s behalf. Therefore, where there is provision for the ‘Owner’ to sign, the Agent signs as their representative.

The short answer is ‘No’.

Rental property owners are subject to anti-discrimination laws that state you cannot refuse a tenant based on such factors as religion, sex, and age.

If your property is more suited to a certain section of the community – such as retirees or families – this should be promoted in the advertising which will make your property more attractive to these types of tenants.

The General Tenancy Agreement (‘Lease’) is a legal document that is governed by strict legislation.

If a special condition is added that contradicts the legislation, the legislation overrides the special condition which becomes null and void.

Owners should therefore be very careful about what special conditions are written into lease agreements, and how to word them. You should engage a solicitor to word these, as an Agent is not qualified to do so.

E. Rental Bond

There is quite a lot pf paperwork involved with placing a new tenant, and your Agent takes care of it all for you.

The three most important documents are:

  1. General Tenancy Agreement (RTA Form 18a) – Commonly known as the ‘Lease’, this details the lease period, rent amount, and who is permitted to live at the property. It also outlines any special conditions of the lease, inclusions, exclusions, and other instructions to the tenant.
  2. Bond Lodgement Form (RTA Form 2) – This must be filled out and sent to the Bond Authority, along with the Bond money.
  3. Entry Condition Report (RTA Form 1a) – This is a comprehensive report detailing the state of the property and its fixtures at the start of the tenancy. For a standard 4-bedroom home, a properly executed ECR should take at least 3 hours.

At the end of a tenancy, tenants are required to hand the property back to the Agent in the same condition than when they moved in – minus fair wear and tear.

They will usually be asked to hand in the keys to the Agent’s office along with carpet cleaning receipt, flea control receipt, and the Exit Condition Report.

The Agent then has 3 business days to inspect the property and return the Exit Condition Report to the Tenant with any issues they see as the Tenant’s responsibility. The Tenant must be given the chance to rectify any issues within a reasonable time frame.

Often, the Tenant will allow the Agent to send out a contractor to attend to cleaning/repairs, and agree to have the cost deducted from the rental bond. This is by far the most effective and efficient procedure for all parties concerned. Some tenants fear that this may go against their tenancy record, but this is incorrect. Agents prefer to send in their own contractors because they know the job will be done to a good standard, and it will be completed in time for the next tenancy to begin. The main aim is to complete the vacate process with minimal fuss and have everyone in agreement.

A rental bond is a security deposit paid by the tenant at the start of a tenancy. It is held by the RTA and is paid back to the tenant at the end of the tenancy provided no money is owed for rent, damages or other costs.

It is not compulsory to take a Bond – however, it is common practice for agents to do so, as it provides a kind of insurance to the owners in case any money is owed at the end of a tenancy.

The Department of Housing provides Bond Loans to tenants who are on a low income, providing they meet certain criteria. Most agents will accept Bond Loans.

Once tenants are approved for a rental property, they can apply for a Bond Loan. The process can take several days as the tenants must first go through an approval process, and then paperwork needs to be signed by all parties.

If the loan is approved, the Department of Housing pays the bond in full on the tenant’s behalf, so as far as the owner is concerned, it is secured funds. The tenant then enters into a payment plan with the Department of Housing.

Recently, we have seen the emergence of private finance companies who specialise in rental bond loans. One such company is ‘Easy Bondpay’. They work with managing agents and will pre-approve a bond loan for any tenant that the agent approves. For more information click here.

  • In a general tenancy, the maximum bond that a tenant should pay is equivalent to 4 weeks’ rent if the rent is $700 a week or less.
  • If the rent is more than $700 a week there is no limit on the bond.

A Rental Bond is lodged with the Bond Authority under two signatories – the Tenant and the Agent (on behalf of the Owner). At the end of a tenancy, the Bond money can only be released if both parties agree in writing.

Once the vacate inspection has been done and any issues rectified, the Agent will calculate funds that are still outstanding from the tenants.

Sometimes there is nothing to be claimed, and the Agent signs off for the full Bond to be refunded to the Tenant.

Often, however, there are funds outstanding including rent, water usage, cleaning or repairs. If the tenant agrees to these expenses, they can decide to pay these funds upfront and receive the full Bond refund. Alternatively, they can have these funds deducted from the Bond. The Agent will prepare the Bond Refund form and send it to the tenants to sign and submit to the Bond Authority.

Refunds from the Bond Authority are done via electronic transfer to nominated accounts.

No, they don’t.

A Management Agreement states that the agent can sign official RTA forms on the owner’s behalf. Therefore, where there is provision for the ‘Owner’ to sign, the Agent signs as their representative.

In some states in Australia, it is common practice to take a ‘Pet Bond’ which can be used at the end of the lease to pay for any damage caused by pets.

in Queensland we are NOT permitted to take extra bond money for pets.

F. During a Tenancy

In general, the Property Owner is responsible to pay for all routine maintenance on a rental property.

The main exception is if the damage is a result of mistreatment by the tenants.

For example, a kitchen cupboard hinge that is worn out from normal daily use is considered maintenance for the owner to fix. On the other hand, if the hinge were torn from its fixture by unnecessary force, this would not be considered normal use and therefore the tenant’s responsibility to fix.

According to Legislation, maintaining the grounds at a Rental Property is generally the Tenant’s responsibility.

However, it may be written into a Tenancy Agreement that the Owner takes responsibility for part or all of the exterior maintenance. (For example, the lawns or gardens). This is often done when the gardens are particularly high-maintenance or require special attention.

In either case, Owners need to be aware that large-scale garden maintenance, such as pruning large trees or disposing of a large amount of garden waste, could fall under property improvement and may not be considered part of the tenant’s responsibility. Therefore, if a property is on acreage or has a particularly ‘lush’ garden, it would be wise for the Owner to have a contractor attend to the grounds on a quarterly or annual basis to keep it under control.

This would fall under the routine maintenance category; as such, it would be the Owner’s responsibility.

Owners are advised to have these cleaned regularly, to avoid costly gutter replacement down the track.

A property should be handed over to the Tenant with all light bulbs working. During the course of the tenancy, if a light bulb needs changing it is generally the tenant’s responsibility to have this changed.

One major exception is if the bulb is an expensive or specialist fitting, in which case the Owner would be responsible for its replacement.

The Residential Tenancy Laws are very specific when it comes to rent raises.

Once a Fixed-Term Lease is signed, the rent CANNOT be raised during the lease term unless it is clearly stated in the terms of the Agreement.

At the lease renewal, it is common for the rent to be reviewed and if market conditions allow, to be raised slightly.

If the Tenants are on a Periodic Agreement, the rent can be raised with 60 days’ written notice to the Tenant.

NOTE – rent cannot be raised within a 6-month period, whether during a Fixed-Term or Periodic Agreement.

Once you engage a Sales Agent to market your property, they are required to advise the tenant via the ‘RTA Form 10 – Notice of Lessor’s Intention to Sell Premises’. This form must be signed by both the Sales Agent and Managing Agent.

A good Sales Agent will endeavour to form a good relationship with the tenant, and keep the Managing Agent fully informed of the sale process. All parties should work together to allow an effective marketing and sale campaign while causing the least possible disruption to the tenant.

the legislation makes provision for a Sales Agent to enter the premises to show prospective buyers, providing the correct notice is given, and the visits are not ‘excessive’ in number.

Marketing photos showing the tenants’ belongings and open homes are only allowed upon written consent by the tenants.

The Queensland Tenancy laws are very specific about rent arrears and the process that should be taken when a tenant falls behind in rent.

A good Agent should manage arrears on a daily basis. When a Tenant falls behind in rent a few days, it is common practice for an Agent to contact the Tenant as a courtesy.

Once the rent becomes 7 clear days in arrears, the Agent is permitted to issue a Notice to Remedy Breach (RTA From 11) to the Tenant, giving them 7 days to pay rent up to date.

If the rent is not paid up to date by the expiry date, the eviction process begins. The Agent issues the Tenant with a Notice to Leave (RTA Form 12), giving 7 days to vacate the property.

Property Owners have a responsibility to attend to all ‘Emergency’ repair issues without delay. Below is an excerpt from the Residential Tenancies Act, defining the meaning of ‘Emergency;.

RTRA Act 2008 – SECTION 214 – Meaning of Emergency Repairs

Emergency repairs are works needed to repair any of the following-

(a) a burst water service or a serious water service leak;

(b) a blocked or broken lavatory system;

(c) a serious roof leak;

(d) a gas leak;

(e) a dangerous electrical fault;

(f) flooding or serious flood damage;

(g) serious storm, fire or impact damage;

(h) a failure or breakdown of the gas, electricity or water supply to premises;

(i) a failure or breakdown of an essential service or appliance on premises for hot water, cooking or heating;

(j) a fault or damage that makes premises unsafe or insecure;

(k) a fault or damage likely to injure a person, damage Property or unduly inconvenience a Tenant of premises;

(l) a serious fault in a staircase, lift or other common area of premises that unduly inconveniences a Tenant in gaining access to, or using, the premises.

All disputes or matters concerning residents’ rights are to be treated the same for Rental Properties as for owner-occupied properties.

As such, all complaints must be taken to the proper authorities such as the local council or Police.

The Managing Agent of the property should also be notified as a courtesy, so that the Owner can also be notified. However, there is limited action that an Agent can take in this case as there are always two sides to a dispute, and the Agent requires strong evidence before they can issue a breach to a tenant.

If the complaints continue and are coming from several neighbours (not just one), the Owner needs to decide if it is time to move these Tenants on at the end of the lease.

Section 185 of the RTRA Act is clear and specific regarding Owners’ obligations to maintain the property throughout a tenancy.

RTRA ACT – SECTION 185 – Lessor’s obligations generally

(2) At the start of the tenancy, the lessor must ensure—

     (a) the premises and inclusions are clean; and

     (b) the premises are fit for the tenant to live in; and

     (c) the premises and inclusions are in good repair; and

     (d) the lessor is not in breach of a law dealing with issues about the health or safety of persons using or entering the premises.

(3) While the tenancy continues, the lessor—

     (a) must maintain the premises in a way that the premises remain fit for the tenant to live in; and

     (b) must maintain the premises and inclusions in good repair; and

     (c) must ensure any law dealing with issues about the health or safety of persons using or entering the premises is complied with; and

     (d) if the premises include a common area—must keep the area clean.

In some Australian states, tenants are required to pay their rent monthly.

In Queensland, there are no specific requirements for how often tenants pay their rent, as long as they do not fall behind in their payments.

Most tenants tend to pay weekly or fortnightly.

Queensland Legislation requires Property Owners to arrange for smoke alarms to be checked within 30 days of a new lease or lease renewal.

It is important to understand that Property Managers are NOT qualified to perform these checks.

A good Managing Agent will engage contractors on the Owner’s behalf to take care of these checks and ensure the property is compliant at all times.

Agents collect rent from the tenants, deduct fees and any invoices payable, and then transfer the remaining funds to their owners all at once in what is called a ‘Disbursement’.

Most agents perform a disbursement twice a month – at mid-month and end of month. Some agents will disburse weekly.

The more often your rent is paid to you, the better your cash flow. Over time, it can also save you on your mortgage interest payments if you have an offset account. (Speak with your financial adviser about this).

 

Commonly known as ‘Routine Inspections’, in Queensland these are generally performed once every 3-4 months.

According to Legislation, 3 months is the MINIMUM time frame that an Agent/Owner must allow between inspections.

It is advisable to set these inspections at 4-monthly periods to allow some lee-way for the Owner to change dates without inadvertently breaching the 3-month legal period.

Tenancy laws state that a tenant must be given 24 HOURS’ NOTICE for an agent to bring prospective buyers through a tenanted property.

Sales Agents who are not well-versed with the tenancy laws often make an error of judgement by assuming that the 24 hours begins as soon as the notice is delivered (whether by email, post or personal delivery to the letterbox). In fact, best practice is to start the 24 hours the day AFTER delivery of the notice.

For example, for a viewing planned for Wednesday 3pm, the notice should be delivered by 5pm on the previous Monday. This allows the tenant a reasonable amount of time to look in their letterbox/email inbox before the 24 hour time period begins.

Failure to give the correct notice to the tenants can result in the Owner receiving a Breach Notice. Furthermore, the tenants have the right to refuse entry on the spot for an illegal entry.

Here are some useful tips for Sales Agents to consider when showing prospects through a tenanted property:

  1. Always issue the regulatory RTA Form 9 to the tenants, even if you gain verbal consent from the tenants
  2. Follow up the Form 9 with a courtesy call or SMS to the tenant
  3. Keep a copy of the Form 9 and record the date, time and method of delivery on the form. Bring the Form 9 with you as verification of correct delivery.

For routine maintenance (ie non-emergency), owners need to give the Tenants at least 24 hours’ written notice. This is normally done via the RTA Form 9 – Entry Notice.

Less notice can be given, as long as the Tenants agree. This is likely to occur if it is an issue that the Tenants are keen to have rectified.

For emergency repairs which require immediate action – for example a burst water pipe or faulty electrical wiring – the owner has the right to send in a tradesperson with no formal notice. In such cases, a quick call to the tenants is advised.

The purpose of property inspections is to gain a snapshot of the condition of the property at regular intervals. During these inspections, any routine repairs or preventative maintenance may be identified to assist the owner in maintaining the property’s capital growth.

These inspections are also an important way of assessing how the tenant is taking care of the property. While it is not required by legislation for the tenant to present the property in a clean and tidy state, tenants are nevertheless encouraged to do so. Owners tends to place some importance on how their tenants present a property during these inspections as it is a sign of how much care is being taken by the tenants. Repeated unsatisfactory inspections may go against the tenant when the lease renewal time comes around.

Most agents now use specialist inspection software on mobile devices to perform their inspections. They are able to take photos which form part of their report that they send to the Owners.

Owners must understand that Property Managers are not trained builders or specialist contractors (such as electricians). They can only identify maintenance items which are visually apparent, or advised by the tenants as not functioning. If an owner requires a specialist opinion on a maintenance item, they must engage the relevant contractor to attend and assess.

A Lease Agreement can be signed by several tenants. Each tenant takes on equal responsibility for the Lease Agreement.

A Change of Shared Tenancy is where the tenants’ names on a lease agreement are changed due to tenants moving out and/or moving in. This can occur for any number of tenants moving, as long as at least one of the original tenants remains on the lease.

Changing names on a Lease Agreement can be quite an involved procedure. It requires documentation to be signed by all parties, as well as the approval from the Owner of the property.

The procedure essentially entails transferring the responsibility of the tenancy from one or more tenants to another.

For information on how Solutions manages this process, please click HERE.

The tenancy laws concerning times and frequency of owner/agent inspections are quite rigid. This is to allow the tenants ‘quiet enjoyment’ of the property in which they are living.

In a nutshell, an Owner can’t just turn up at his/her property and request entry. The following terms must be adhered to:

  1. The tenants are to be given 7 clear days’ written notice on the appropriate RTA form.
  2. The Owner or Agent must not have performed a property inspection within the past 3 months.

If the Owner or Agent fails to adhere to these terms, the tenant has the right to refuse entry and/or issue a Breach Notice to the Owner.

This is a common misconception among owners. Some agents even write this into their lease agreements. Unfortunately, this is contracting out of the Act, and a lease with these conditions would not stand up in Court.

While we can REQUEST a tenant to pay fortnightly, or be two weeks in advance, the Legislation does NOT allow us to enforce this. In fact, the first legal step we can take is when the tenant’s rent becomes 7 clear days in arrears.

G. Rent

Your investment property is a valuable asset which generates an income stream. You need to consider carefully what would happen if that income stream suddenly ceased.

This could happen for a number of reasons, but mostly due to the ‘human factor’. A rental income is never guaranteed. You could have the best tenants in the world, but if their circumstances changed and their income stopped, chances are that their rent will fall behind. And you could have the best Property Manager in the world, but no-one can get blood out of a stone.

Landlord Protection Insurance is designed specifically to cover property Owners for unforeseen losses. The two main areas covered are loss of rent and damage caused by tenants.

Landlord Protection Insurance is very cost effective – around $300 per year for a good policy. But be careful – policies vary greatly with what they offer and the cheap ones are often not worth the paper they are written on.

Click here for more specific information on how to choose the best policy.

The Residential Tenancy Laws are very specific when it comes to rent raises.

Once a Fixed-Term Lease is signed, the rent CANNOT be raised during the lease term unless it is clearly stated in the terms of the Agreement.

At the lease renewal, it is common for the rent to be reviewed and if market conditions allow, to be raised slightly.

If the Tenants are on a Periodic Agreement, the rent can be raised with 60 days’ written notice to the Tenant.

NOTE – rent cannot be raised within a 6-month period, whether during a Fixed-Term or Periodic Agreement.

An Agent has a Duty of Care to both tenants and their Owner clients, to ensure that a Tenant moving into a property is on sufficient income to afford the rent.

But what is deemed to be ‘sufficient’? There are many variables associated with this, because everyone’s situation is different.

Many agents use a simple calculation that is often used by the banks to determine if an applicant can make repayments on a house loan. They take the total income for all the tenants applying for the property and divide it by three. If this works out to be more than the weekly rent, they consider the affordability to be good.

While this can be a good rule of thumb, it can exclude a proportion of the tenant population who have a relatively low income but a good rental payment history. These tenants have shown that they are able to budget effectively and prioritise their rental payments. They may have fewer expenses – for example, no car payments or school fees. Therefore, a tenant’s rental history in these cases becomes very important when an Agent is trying to work out rent affordability.

Likewise, a tenant may have a relatively high income – but if their rental history shows a habit of late payments, the agent will most likely not approve this application.

If a tenant is applying for their first rental property, and they are on a low income, they may need to start with a low-priced property, or move in with friends who can help them pay their rent. Once they start to build up a good rental history, they will have more flexibility in future leases.

The Queensland Tenancy laws are very specific about rent arrears and the process that should be taken when a tenant falls behind in rent.

A good Agent should manage arrears on a daily basis. When a Tenant falls behind in rent a few days, it is common practice for an Agent to contact the Tenant as a courtesy.

Once the rent becomes 7 clear days in arrears, the Agent is permitted to issue a Notice to Remedy Breach (RTA From 11) to the Tenant, giving them 7 days to pay rent up to date.

If the rent is not paid up to date by the expiry date, the eviction process begins. The Agent issues the Tenant with a Notice to Leave (RTA Form 12), giving 7 days to vacate the property.

Once all the necessary forms have been issued, and Tenants do not vacate on the required expiry date of the Notice to Leave, the Agent must apply to QCAT for a Warrant of Possession.

After the application is made, it may take 3-8 weeks to obtain a Hearing (depending on the time of year and location of the Courthouse).

At the Hearing, the Agent presents their case and must show that all the correct notices have been issued to the tenants at the appropriate times. If the tenant wants to remain at the property, they will also be in attendance and be given a chance to present their case. If the Agent presents a good case backed with factual evidence, the adjudicator will most likely grant a Warrant of Possession, giving the Tenant as much as 3 weeks to vacate the property.

In some Australian states, tenants are required to pay their rent monthly.

In Queensland, there are no specific requirements for how often tenants pay their rent, as long as they do not fall behind in their payments.

Most tenants tend to pay weekly or fortnightly.

Agents collect rent from the tenants, deduct fees and any invoices payable, and then transfer the remaining funds to their owners all at once in what is called a ‘Disbursement’.

Most agents perform a disbursement twice a month – at mid-month and end of month. Some agents will disburse weekly.

The more often your rent is paid to you, the better your cash flow. Over time, it can also save you on your mortgage interest payments if you have an offset account. (Speak with your financial adviser about this).

 

This is a common misconception among owners. Some agents even write this into their lease agreements. Unfortunately, this is contracting out of the Act, and a lease with these conditions would not stand up in Court.

While we can REQUEST a tenant to pay fortnightly, or be two weeks in advance, the Legislation does NOT allow us to enforce this. In fact, the first legal step we can take is when the tenant’s rent becomes 7 clear days in arrears.

H. Inspections & Entry

Commonly known as ‘Routine Inspections’, in Queensland these are generally performed once every 3-4 months.

According to Legislation, 3 months is the MINIMUM time frame that an Agent/Owner must allow between inspections.

It is advisable to set these inspections at 4-monthly periods to allow some lee-way for the Owner to change dates without inadvertently breaching the 3-month legal period.

Tenancy laws state that a tenant must be given 24 HOURS’ NOTICE for an agent to bring prospective buyers through a tenanted property.

Sales Agents who are not well-versed with the tenancy laws often make an error of judgement by assuming that the 24 hours begins as soon as the notice is delivered (whether by email, post or personal delivery to the letterbox). In fact, best practice is to start the 24 hours the day AFTER delivery of the notice.

For example, for a viewing planned for Wednesday 3pm, the notice should be delivered by 5pm on the previous Monday. This allows the tenant a reasonable amount of time to look in their letterbox/email inbox before the 24 hour time period begins.

Failure to give the correct notice to the tenants can result in the Owner receiving a Breach Notice. Furthermore, the tenants have the right to refuse entry on the spot for an illegal entry.

Here are some useful tips for Sales Agents to consider when showing prospects through a tenanted property:

  1. Always issue the regulatory RTA Form 9 to the tenants, even if you gain verbal consent from the tenants
  2. Follow up the Form 9 with a courtesy call or SMS to the tenant
  3. Keep a copy of the Form 9 and record the date, time and method of delivery on the form. Bring the Form 9 with you as verification of correct delivery.

For routine maintenance (ie non-emergency), owners need to give the Tenants at least 24 hours’ written notice. This is normally done via the RTA Form 9 – Entry Notice.

Less notice can be given, as long as the Tenants agree. This is likely to occur if it is an issue that the Tenants are keen to have rectified.

For emergency repairs which require immediate action – for example a burst water pipe or faulty electrical wiring – the owner has the right to send in a tradesperson with no formal notice. In such cases, a quick call to the tenants is advised.

The purpose of property inspections is to gain a snapshot of the condition of the property at regular intervals. During these inspections, any routine repairs or preventative maintenance may be identified to assist the owner in maintaining the property’s capital growth.

These inspections are also an important way of assessing how the tenant is taking care of the property. While it is not required by legislation for the tenant to present the property in a clean and tidy state, tenants are nevertheless encouraged to do so. Owners tends to place some importance on how their tenants present a property during these inspections as it is a sign of how much care is being taken by the tenants. Repeated unsatisfactory inspections may go against the tenant when the lease renewal time comes around.

Most agents now use specialist inspection software on mobile devices to perform their inspections. They are able to take photos which form part of their report that they send to the Owners.

Owners must understand that Property Managers are not trained builders or specialist contractors (such as electricians). They can only identify maintenance items which are visually apparent, or advised by the tenants as not functioning. If an owner requires a specialist opinion on a maintenance item, they must engage the relevant contractor to attend and assess.

The tenancy laws concerning times and frequency of owner/agent inspections are quite rigid. This is to allow the tenants ‘quiet enjoyment’ of the property in which they are living.

In a nutshell, an Owner can’t just turn up at his/her property and request entry. The following terms must be adhered to:

  1. The tenants are to be given 7 clear days’ written notice on the appropriate RTA form.
  2. The Owner or Agent must not have performed a property inspection within the past 3 months.

If the Owner or Agent fails to adhere to these terms, the tenant has the right to refuse entry and/or issue a Breach Notice to the Owner.

I. Maintenance

In general, the Property Owner is responsible to pay for all routine maintenance on a rental property.

The main exception is if the damage is a result of mistreatment by the tenants.

For example, a kitchen cupboard hinge that is worn out from normal daily use is considered maintenance for the owner to fix. On the other hand, if the hinge were torn from its fixture by unnecessary force, this would not be considered normal use and therefore the tenant’s responsibility to fix.

According to Legislation, maintaining the grounds at a Rental Property is generally the Tenant’s responsibility.

However, it may be written into a Tenancy Agreement that the Owner takes responsibility for part or all of the exterior maintenance. (For example, the lawns or gardens). This is often done when the gardens are particularly high-maintenance or require special attention.

In either case, Owners need to be aware that large-scale garden maintenance, such as pruning large trees or disposing of a large amount of garden waste, could fall under property improvement and may not be considered part of the tenant’s responsibility. Therefore, if a property is on acreage or has a particularly ‘lush’ garden, it would be wise for the Owner to have a contractor attend to the grounds on a quarterly or annual basis to keep it under control.

This would fall under the routine maintenance category; as such, it would be the Owner’s responsibility.

Owners are advised to have these cleaned regularly, to avoid costly gutter replacement down the track.

A property should be handed over to the Tenant with all light bulbs working. During the course of the tenancy, if a light bulb needs changing it is generally the tenant’s responsibility to have this changed.

One major exception is if the bulb is an expensive or specialist fitting, in which case the Owner would be responsible for its replacement.

Property Owners have a responsibility to attend to all ‘Emergency’ repair issues without delay. Below is an excerpt from the Residential Tenancies Act, defining the meaning of ‘Emergency;.

RTRA Act 2008 – SECTION 214 – Meaning of Emergency Repairs

Emergency repairs are works needed to repair any of the following-

(a) a burst water service or a serious water service leak;

(b) a blocked or broken lavatory system;

(c) a serious roof leak;

(d) a gas leak;

(e) a dangerous electrical fault;

(f) flooding or serious flood damage;

(g) serious storm, fire or impact damage;

(h) a failure or breakdown of the gas, electricity or water supply to premises;

(i) a failure or breakdown of an essential service or appliance on premises for hot water, cooking or heating;

(j) a fault or damage that makes premises unsafe or insecure;

(k) a fault or damage likely to injure a person, damage Property or unduly inconvenience a Tenant of premises;

(l) a serious fault in a staircase, lift or other common area of premises that unduly inconveniences a Tenant in gaining access to, or using, the premises.

Section 185 of the RTRA Act is clear and specific regarding Owners’ obligations to maintain the property throughout a tenancy.

RTRA ACT – SECTION 185 – Lessor’s obligations generally

(2) At the start of the tenancy, the lessor must ensure—

     (a) the premises and inclusions are clean; and

     (b) the premises are fit for the tenant to live in; and

     (c) the premises and inclusions are in good repair; and

     (d) the lessor is not in breach of a law dealing with issues about the health or safety of persons using or entering the premises.

(3) While the tenancy continues, the lessor—

     (a) must maintain the premises in a way that the premises remain fit for the tenant to live in; and

     (b) must maintain the premises and inclusions in good repair; and

     (c) must ensure any law dealing with issues about the health or safety of persons using or entering the premises is complied with; and

     (d) if the premises include a common area—must keep the area clean.

Queensland Legislation requires Property Owners to arrange for smoke alarms to be checked within 30 days of a new lease or lease renewal.

It is important to understand that Property Managers are NOT qualified to perform these checks.

A good Managing Agent will engage contractors on the Owner’s behalf to take care of these checks and ensure the property is compliant at all times.

For routine maintenance (ie non-emergency), owners need to give the Tenants at least 24 hours’ written notice. This is normally done via the RTA Form 9 – Entry Notice.

Less notice can be given, as long as the Tenants agree. This is likely to occur if it is an issue that the Tenants are keen to have rectified.

For emergency repairs which require immediate action – for example a burst water pipe or faulty electrical wiring – the owner has the right to send in a tradesperson with no formal notice. In such cases, a quick call to the tenants is advised.

J. Selling a Tenanted Property

Once you engage a Sales Agent to market your property, they are required to advise the tenant via the ‘RTA Form 10 – Notice of Lessor’s Intention to Sell Premises’. This form must be signed by both the Sales Agent and Managing Agent.

A good Sales Agent will endeavour to form a good relationship with the tenant, and keep the Managing Agent fully informed of the sale process. All parties should work together to allow an effective marketing and sale campaign while causing the least possible disruption to the tenant.

the legislation makes provision for a Sales Agent to enter the premises to show prospective buyers, providing the correct notice is given, and the visits are not ‘excessive’ in number.

Marketing photos showing the tenants’ belongings and open homes are only allowed upon written consent by the tenants.

Tenancy laws state that a tenant must be given 24 HOURS’ NOTICE for an agent to bring prospective buyers through a tenanted property.

Sales Agents who are not well-versed with the tenancy laws often make an error of judgement by assuming that the 24 hours begins as soon as the notice is delivered (whether by email, post or personal delivery to the letterbox). In fact, best practice is to start the 24 hours the day AFTER delivery of the notice.

For example, for a viewing planned for Wednesday 3pm, the notice should be delivered by 5pm on the previous Monday. This allows the tenant a reasonable amount of time to look in their letterbox/email inbox before the 24 hour time period begins.

Failure to give the correct notice to the tenants can result in the Owner receiving a Breach Notice. Furthermore, the tenants have the right to refuse entry on the spot for an illegal entry.

Here are some useful tips for Sales Agents to consider when showing prospects through a tenanted property:

  1. Always issue the regulatory RTA Form 9 to the tenants, even if you gain verbal consent from the tenants
  2. Follow up the Form 9 with a courtesy call or SMS to the tenant
  3. Keep a copy of the Form 9 and record the date, time and method of delivery on the form. Bring the Form 9 with you as verification of correct delivery.

This is an extremely contentious issue, because the wording in the legislation of the notice periods required can be misleading.

The first thing to remember is that the Lease Agreement overrides all other contracts – including Sales Contracts. Therefore, the Lease must be seen through to completion unless there is a written agreement from all parties for early termination of the Lease.

Written Notice to be given by the Owner:

For Fixed-Term Lease Agreements – at least 2 months OR the expiry of the lease – whichever is the latter.

For Periodic Lease Agreements – at least 28 days upon the completion of a contract of sale.

K. Ending a Tenancy

For Fixed-Term Lease Agreements:

Tenants are required to give written notice of at least 2 weeks OR the expiry of the lease – whichever is the latter.

Owners are required to give written notice of at least 2 months OR the expiry of the lease – whichever is the latter.

For Periodic Lease Agreements:

Tenants are required to give written notice of at least 2 weeks.

Owners are required to give written notice of at least 2 months.

At the end of a tenancy, tenants are required to hand the property back to the Agent in the same condition than when they moved in – minus fair wear and tear.

They will usually be asked to hand in the keys to the Agent’s office along with carpet cleaning receipt, flea control receipt, and the Exit Condition Report.

The Agent then has 3 business days to inspect the property and return the Exit Condition Report to the Tenant with any issues they see as the Tenant’s responsibility. The Tenant must be given the chance to rectify any issues within a reasonable time frame.

Often, the Tenant will allow the Agent to send out a contractor to attend to cleaning/repairs, and agree to have the cost deducted from the rental bond. This is by far the most effective and efficient procedure for all parties concerned. Some tenants fear that this may go against their tenancy record, but this is incorrect. Agents prefer to send in their own contractors because they know the job will be done to a good standard, and it will be completed in time for the next tenancy to begin. The main aim is to complete the vacate process with minimal fuss and have everyone in agreement.

This is a term used quite extensively in residential tenancies. When a tenant vacates a property, agents and owners are cautioned to not make tenants responsible for anything that can be classed as ‘Fair Wear and Tear’.

‘Fair Wear and Tear’ refers to the deterioration that occurs over time with the use of the premises even though the premises receive reasonable care and maintenance.  Such deterioration could be caused by exposure, time, or just by ordinary use.  The tenant is only liable for negligent, irresponsible or intentional actions that cause damage to the premises.

These examples my help to explain the difference:

FAIR WEAR AND TEAR DAMAGE
Faded curtains or frayed cords Missing curtains or torn by the tenant’s cat
Furniture indentations and traffic marks on the carpet Stains or burn marks on the carpet
Scuffed wooden floors Badly scratched or gouged wooden floors
Faded, chipped or cracked paint Unapproved or poor quality paint job
Worn kitchen bench top Burns or cuts in bench top
Loose hinges or handles on doors or  windows and worn sliding tracks Broken glass from one of the tenant’s children hitting a ball through the window
Cracks in the walls from movement Holes in the walls left by tenant removing picture hooks or shelves they had installed
Water stain on carpet from rain through leaking roof or bad plumbing Water stain on carpet caused by overflowing bath or indoor pot plants
Paint worn off wall near light switch Damage to paint caused by removing posters stuck with ‘Blu-Tack’ or sticky tape

 

Once all the necessary forms have been issued, and Tenants do not vacate on the required expiry date of the Notice to Leave, the Agent must apply to QCAT for a Warrant of Possession.

After the application is made, it may take 3-8 weeks to obtain a Hearing (depending on the time of year and location of the Courthouse).

At the Hearing, the Agent presents their case and must show that all the correct notices have been issued to the tenants at the appropriate times. If the tenant wants to remain at the property, they will also be in attendance and be given a chance to present their case. If the Agent presents a good case backed with factual evidence, the adjudicator will most likely grant a Warrant of Possession, giving the Tenant as much as 3 weeks to vacate the property.

Also known as a ‘Break Lease’, there is provision in the legislation to allow Tenants to end their lease agreement early.

Both parties (Owners and Tenant) have responsibilities in this case to mitigate losses on both sides.

Tenants must continue to pay their rent until another tenant is placed, or the end of the lease (whichever is sooner). They may also be required to reimburse Owners for any extra expenses such as Letting Fee or advertising costs incurred to find new tenants.

Owners must do all they can to mitigate the Tenant’s loss by finding replacement tenants (through their Agent).

Once a replacement tenant is found, the Agent determines the ‘revised’ lease end date to be the day before the new tenants start their lease. The vacate process is the same as a normal lease end, and final rent owed is calculated to the ‘revised’ lease end date.

Most Agencies require tenants to pay their first 2 weeks rent before they move into a property. This is not a ‘down payment’ or a ‘holding fee’ or a ‘deposit’. It is your first 2 weeks’ rent payment.

Many tenants are under the impression that this payment is somehow ‘held’ by their agent in a separate account, and at the end of the tenancy they can ask the agent to now ‘use’ these funds to pay their last 2 weeks rent.

This is a common misunderstanding and in fact is the number one cause for disagreement between agents and tenants at the end of a tenancy.

This is what actually happens. A tenant pays his first 2 weeks’ rent and moves in on 1st March. This money is receipted as rent from 1st March to 14th March. It appears on his rent ledger. What normally happens is that the tenant will make his next rent payment on or around 15th March, for the next week or 2 weeks. This is receipted as rent from 15th March… and so it goes on.

If the tenant wishes to make use of the ‘2 weeks rent in advance’ that he paid up front for the end of his lease, he would need to make his second payment on 1st March (as soon as he moved in), and continue to make regular payments until the end of this lease. This would mean that during the tenancy, his rent would be at least 2 weeks in advance at all times.

The best way for you as a tenant to check if you are ahead in your rent payments is to ask for a rental ledger. This ledger is a true and accurate account of all rental payments you have made to the agent INCLUDING THE FIRST 2 WEEKS RENT IN ADVANCE. If you see that you are not 2 weeks ahead, you need to look at all the payments you have made since moving in and the corresponding period that the payment refers to. Remember – the agent is not ‘holding’ any of your money. (This is actually illegal!).

If you believe that you have made an extra payment that is not shown on your ledger, you will need to contact your agent and provide proof of this payment. If the funds have gone missing, you may need to request a trace with your bank to find what has happened to the funds.

A Rental Bond is lodged with the Bond Authority under two signatories – the Tenant and the Agent (on behalf of the Owner). At the end of a tenancy, the Bond money can only be released if both parties agree in writing.

Once the vacate inspection has been done and any issues rectified, the Agent will calculate funds that are still outstanding from the tenants.

Sometimes there is nothing to be claimed, and the Agent signs off for the full Bond to be refunded to the Tenant.

Often, however, there are funds outstanding including rent, water usage, cleaning or repairs. If the tenant agrees to these expenses, they can decide to pay these funds upfront and receive the full Bond refund. Alternatively, they can have these funds deducted from the Bond. The Agent will prepare the Bond Refund form and send it to the tenants to sign and submit to the Bond Authority.

Refunds from the Bond Authority are done via electronic transfer to nominated accounts.

This is an extremely contentious issue, because the wording in the legislation of the notice periods required can be misleading.

The first thing to remember is that the Lease Agreement overrides all other contracts – including Sales Contracts. Therefore, the Lease must be seen through to completion unless there is a written agreement from all parties for early termination of the Lease.

Written Notice to be given by the Owner:

For Fixed-Term Lease Agreements – at least 2 months OR the expiry of the lease – whichever is the latter.

For Periodic Lease Agreements – at least 28 days upon the completion of a contract of sale.

L. Ending a Management Agreement

To promote stability for all parties including Tenants, a Management Agreement runs continuously with no fixed end date.

If either party (Owner or Agent) decides to terminate the Agreement, it must be made in writing.

Certain notice periods apply with a termination, and these can depend on when the Agreement was initiated.

If the Agreement was signed on or after 1st December 2014, it will be on a current PO Form 6 (Property Occupations). The termination period in this case is 30 days. However, if both parties agree, the Agreement may be terminated any time within this period.

If the Agreement was signed before 1st December 2014, it will be a Form PAMD20a. This was governed by the Property and Motor Dealers Act which has since been superseded by the Property Occupations Act. All PAMD20a’s executed before 1st December 2014 remain valid, as do their termination conditions. The termination notice may be up 90 days, which can be shortened by mutual agreement to 30 days. However, the agreement MUST NOT be terminated any less than 30 days, even if both sides agree.