Property management and landlords

Know your state’s tenancy laws

Residential tenancies are regulated by each state and territory, through laws and an agency such as a fair trading or consumer affairs office. Rules differ on:

• the standard tenancy agreement and information statements you must give tenants
• bonds: how much, and where they’re lodged
• rent in advance, rent increases and how often they can happen
• entry and inspections: notice periods and allowed times
• repairs: urgent and non-urgent, and how quickly they must be done
• minimum standards a rental must meet
• ending a tenancy: notice periods and grounds.

For example, the NSW Government says landlords must make sure the tenancy agreement is in writing, can’t require more than two weeks’ rent in advance, and must give tenants the Tenant Information Statement before they sign. Always check the current rules in your state.

Your responsibilities as a landlord

In NSW, NSW Fair Trading says landlords are responsible for:

• providing a property that is fit to live in
• maintaining it in a reasonable state of repair, considering its age, the rent and the property’s prospective life
• providing and maintaining locks or other security devices so it’s reasonably secure.

NSW also requires rentals to meet minimum standards for the whole tenancy. Other states have their own versions. Smoke alarms, pool safety, gas and electrical safety rules also apply, and vary by state.

Check with your insurer what cover suits a rental property, and tell them if the property is rented.

Choosing a property manager

If you use a property manager, they should hold the licence or registration required in your state.

Compare:

• Fees: management fee, letting fee, advertising, inspection and other charges. Ask for every fee in writing.
• Services: advertising, tenant screening, rent collection and arrears, inspections, repairs, and handling disputes and tribunal hearings.
• Communication: how and how often they report, and who your contact is.
• Experience with your type of property and area.
• The management agreement: length, how to end it, and what you’ve authorised them to do (such as repairs up to a set amount).

Finding and screening tenants

• Advertise accurately: describe the property honestly, including any limits, and show the rent clearly.
• Treat applicants fairly and consistently. Anti-discrimination laws apply to choosing tenants.
• Check applications: identity, income or capacity to pay, rental history and references, following your state’s rules on what you can ask and collect.
• Protect applicants’ information: collect only what you need, store it securely and destroy it when it’s no longer needed. Check whether the Privacy Act applies to you; it covers some businesses regardless of turnover, including residential tenancy database operators.

During the tenancy

1. Condition report: complete it with photos before the tenant moves in, and give the tenant a copy to review.
2. Bond: lodge it with your state’s bond authority within the required time.
3. Rent: record every payment and follow up arrears promptly, using the notices your state’s laws require.
4. Inspections: give the required notice, and keep inspections respectful and reasonable in frequency.
5. Repairs: respond quickly, especially to urgent repairs. Use licensed tradespeople for regulated work.
6. Communication: keep it in writing where possible, and keep copies.

Disputes

• Talk first: many issues can be solved with a conversation and a written follow-up.
• Your state’s tenancy authority can explain the rules, and many offer dispute resolution services.
• Tribunals in each state hear tenancy disputes, such as bond claims, repairs and terminations.
• Never change locks, remove belongings or cut off utilities to force a tenant out; follow the legal process.

Running a property management business

Property management is a licensed activity in most states. If you’re starting a business:

• get the licence or registration your state requires, and set up trust accounting correctly
• use written agreements with every owner. See Contracts and legal basics.
• invest in property management software for rent, inspections, maintenance and reporting
• build relationships with reliable tradespeople
• market to owners in your area. See Marketing for real estate agents.