Welcome to the latest edition of The Letterbox, NSW Fair Trading’s enewsletter about tenancy issues.
This edition focuses on all the things that tenants, landlords and agents need to do when entering into a new residential tenancy agreement to make sure everyone gets the best out of the arrangement. It also includes a new regular feature: case studies from the tenancy dispute resolution service.
Getting a new tenancy right from the start
The hunt is over. The landlord has found their tenant and the tenant has found their new home. The tenancy application has been accepted and everyone is ready to sign up. What happens now?
As a tenant, you may be super keen to move in and personalise your new residence, but there are checks you’ll need to make before you book the moving truck. This enewsletter contains an update on condition reports and lets you know how we can help if your initial negotiations with the landlord don’t go smoothly. Visit the Starting a tenancy section on our website for more detailed information about renting residential property.
For landlords, your first question may be: should I hire an agent, or manage the property myself? Skip ahead to our article on DIY landlords vs. hired property managers for some important considerations. Our website section on Being a landlord also provides a wealth of information to landlords, whether they’re self-managing or not.
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Answers to your questions about new tenancies
Q: Before my new tenant signed the tenancy agreement, the agent managing my property told her I would fix the broken air conditioner. I’d never agreed to do that and there was nothing on the tenancy agreement. Where do I stand?
A: You should organise for the air-conditioner to be fixed if your agent has said you will do that. You can also check the condition report completed by the tenant for any details of promised repairs.
While it is good practice for a tenant to get such an undertaking in writing before they sign the agreement, it does not mean that you and your agent are not responsible. To the tenant, the agent is your authorised representative and the promised repair was made on your behalf. A promised repair should be honoured whether it is made by you or your authorised agent.
You need to also remember that when you rent out your property, it must be in a reasonable state of repair, taking into account the age of the property and the rental amount. Note that an air-conditioner is one of the essential services a tenant can organise as an urgent repair.
Separate action may be able to be taken against your agent concerning their conduct and lack of authority. Fair Trading laws and the rules of conduct prohibit agents from engaging in conduct that is misleading in connection with the supply of goods and services to a customer. For more information you can contact Fair Trading on 13 32 20 during business hours.
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Q: I recently started renting a new place and I haven’t received a letter to confirm the bond has been lodged. How can I check on it?
A: You can contact Fair Trading on 13 32 20 to find out if your landlord has deposited the bond.
There are different timeframes for lodging rental bonds for self-managing landlords and agents. Landlords who have collected money for a bond have 10 working days to lodge it with Fair Trading. Agents must lodge all the bonds they have collected during the month within 10 working days from the end of that month.
Once the bond has been deposited, Fair Trading will send you a letter within the first two months to advise that your bond has been received and provide your bond number. If you have not received the letter by this time, you should contact Fair Trading.
If the landlord has not deposited the rental bond within the required period, you should report this to Fair Trading as soon as possible. Landlords and agents can be fined up to $2,200 for not lodging the rental bond within the required period.
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Q: My partner and I have an investment property we plan to sell, but not for several months. We’re about to sign up new tenants to make the unit more attractive to prospective buyers. Should I tell them we’re planning to sell?
A: This depends on whether a contract for sale has been prepared. If you plan to sell the property and a contract for sale has been prepared, then you or your agent must disclose the proposed sale before the tenant enters into the residential tenancy agreement. Landlords or agents can be fined up to $2,200 for failing to disclose this information.
In this instance, failure to disclose the proposed sale means that your tenant will also have the right to terminate the agreement if they wish by giving you 14 days written notice even if it is during the fixed term. The tenant would not have to compensate you for the early termination either.
If a contract for sale has not been prepared before you enter into the agreement with the tenant, you may still consider disclosing the proposed sale to avoid any future disagreements. However, in such situations it is not a requirement.
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Q: My partner and I were accepted as tenants but when we went to sign the agreement they noticed I was pregnant and said that the agreement only allowed two people to live in the property. I got my deposit back, but it doesn’t seem right to me.
A: You have rights under the anti-discrimination laws which prohibit many forms of discrimination.
While landlords and agents have the right to choose the most suitable tenant, they are not able to unfairly discriminate and it is against the law to discriminate against anyone because of pregnancy. This includes placing unrealistic restrictions on the number of occupants permitted which could exclude pregnant women.
Landlords and agents may be liable for direct and indirect discriminatory acts so they need to be mindful of their obligations and should exercise care to avoid discriminatory acts when selecting and signing up with a tenant.
If you believe that you have been discriminated against when applying for a rental property, you can contact the NSW Anti-Discrimination Board on 9268 5555 or 1800 670 812.
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Q: The tenants have just returned the condition report and are claiming the floors were dirty and the TV aerial doesn’t work. We know the place was thoroughly cleaned and the previous tenant’s television was working. Can we make them amend the report?
A: No. The tenant’s record on the condition report represents their assessment of the condition of the property at the start of a tenancy.
A landlord or agent must not seek to influence a tenant into amending the condition report. To amend the comments the tenant has added to the condition report that you disagree with, you can apply for an order at the NSW Civil and Administrative Tribunal.
Another option may be for you or your agent to discuss your concerns with the tenant and, if the tenant agrees, possibly visit the premises to look into the tenant’s claims. If the tenant’s claims can be verified this gives you the opportunity to make any necessary repairs to the property. Keep a record of this and attach it to the condition report as evidence.
If you are not able to resolve the dispute between yourselves, you can consider lodging a complaint with Fair Trading to begin a tenancy dispute resolution process. If you are still unable to resolve the disagreement, you can apply to the Tribunal for an order to amend the comments the tenant has added to the condition report.
It is often minor damage that causes disputes. That is why it is a good idea for both landlords and tenants to take photos or videos with dates to back-up the condition of the property at the start of the tenancy to try and avoid any possible disputes that may arise.
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Case study: tenancy dispute resolution
A tenant initiated a complaint with Fair Trading’s dispute resolution service about a number of window locks that weren’t working. She’d noted this issue on the condition report at the beginning of the tenancy and contacted the agent to request repairs as she was worried about security.
The tenant had attempted to contact the agent on a number of occasions but did not receive a response. For peace of mind, she'd paid to have a lock installed in their baby’s bedroom and believed she should be reimbursed for the cost of the installation.
Four months after her initial request, the landlord responded and advised that he wasn’t willing to make the repairs. He felt this was reasonable because the tenant had agreed to rent the property in its current condition.
On receiving the complaint and after speaking to the tenant, Fair Trading contacted the agent and asked whether the landlord had been informed of his responsibilities under the Residential Tenancies Act 2010 to:
- maintain security devices so that the premises are reasonably secure, and
- maintain the premises to a reasonable state of repair, even if the tenant had notice of the state of disrepair before entering into the agreement.
The agent advised that the landlord had been informed of his obligations but was unwilling to act on them. Following receipt of written correspondence from Fair Trading regarding the complaint, the agent agreed to contact the landlord and again request for the repairs to be carried out.
The Fair Trading officer later spoke to the agent who advised that the landlord had agreed to refund the tenant for the cost of the lock installation. With regard to the locks on the other windows, it was confirmed that they were actually already in working order. The tenant however, wanted to be able to lock them in an open position. The landlord agreed to allow the tenant to make this alteration, at her own expense.
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DIY landlords vs. hired property managers
Even if you have used an agent to find your tenant, every landlord needs to decide whether to hire an agent to manage their investment on a day-to-day basis.
Managing the property yourself can save you money and it means you can deal directly with your tenant. However, self-management is not for everyone and your decision should take into account your:
- Location: do you live or work close enough to the property to easily conduct inspections and repairs? If something goes wrong, you may need to make frequent trips to the property.
- Time available: Can you spare the time to pay the bills and do the record keeping, arrange repairs and general maintenance, conduct inspections and go to the NSW Civil and Administrative Tribunal if you need to?
- Knowledge of tenancy laws: Do you know and understand your rights and obligations as a landlord? Do you know where to find current information?
- Personal characteristics: Are you willing to enforce your rights? Are you willing to attempt to build a good relationship with your tenant, no matter what their personality traits?
A rental property is a large investment and it comes with a corresponding level of risk. Doing your research and really thinking through the pros and cons of self-management will help to reduce that risk. If you do decide to self-manage, you might like to attend one of our My Place self-managing landlords seminars.
If you decide to use an agent, take the time to find the right agent and check they are properly licensed. All property managers must either hold a licence or have a certificate of registration and work under the supervision of a licensed agent. You can do a licence check on the Fair Trading website or call 13 32 20.
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Can’t agree on the agreement?
Sometimes disagreements can arise even before the tenancy begins; it could be about a clause in the tenancy agreement, who has responsibility for pest control or if it’s reasonable to expect a particular repair.
If you’re having trouble agreeing, Fair Trading offers a free dispute resolution service to tenants and landlords (or their agents). The service is free, voluntary and available at any stage of the tenancy.
Experienced dispute resolution officers conduct the service by telephone or an onsite meeting and their primary aim is to reach a mutually agreeable outcome for both parties. The officers provide impartial information and will allow all participants to put forward their points. They will not take sides or represent either of the parties.
Both landlords and their agents can participate and attend meetings, and tenants have the opportunity to engage a tenant’s advocate through the Tenants Advisory and Advocacy Service. Third party written submissions will also be accepted.
If an agreement cannot be reached, the officer will provide each party with other available options, such as lodging an application with the NSW Civil and Administrative Tribunal.
See residential tenancy disputes information for more details about this service.
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Proposed strata changes could affect you and your neighbours
If you live in a strata building you can get a head start on learning about proposed changes, designed to support the running and shared needs of strata communities into the future, by taking a peak at our reforms snapshot.
Based on previous consultation, the 70 proposed laws detailed in the NSW Government’s strata reforms position paper will help to future-proof 50-year-old Strata Title. This affects around 2 million industry professionals, owners and residents involved with strata. The laws will support 72,000 schemes worth $350 billion in assets.
The NSW Government is continuing to talk with key stakeholders. To keep in the loop register for strata email updates here.
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Strata window safety made simple
With 50 children falling from windows or balconies in Australia each year, strata schemes are now required by law to install life-saving window safety devices.
The laws affect most openable windows, which children can potentially access, that are above the ground floor and in residential lots or from residential areas of strata buildings.
Owners corporations are responsible for fitting the devices, including safety screens - not insect screens - or childproof locks that limit windows opening to 12.5cm. If this is not done by March 2018, penalties will apply. Contact your owners corporation secretary to check on progress for fitting the devices for your building.
Individual lot owners may install safety devices on windows within their lot at any time, letting their owners corporation know. Tenants can do so by asking their landlords for written permission.
If you haven’t yet, check out our Window and balcony safety videos for a demonstration on how to easily install cost-effective devices.
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New Condition report for residential tenancies
The condition report is an essential document that should be completed at the start of every tenancy, ideally before the tenant moves in. Landlords and tenants must now use a new version of the condition report which includes the addition of ‘window safety devices’ wherever ‘windows/screens’ appears.
You can download the new version of the report from Fair Trading's website in the residential tenancy forms section.
Children fall from windows or balconies in Australia every year, many suffer serious injuries and sometimes these falls are fatal. This addition to the condition report is one of a number of measures the NSW Government has developed to help prevent the incidence of falls.
Further information about window safety and these new safety measures is available from Fair Trading’s window and balcony safety page. Advice on filling out a condition report is also available from our website.
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Breaking news for pool owners
Pool owners now have more time to ensure their swimming pools are compliant if they want to sell or enter into a new tenancy agreement for their property. The Division of Local Government has delayed the commencement date of the requirement for pool owners to attach a Certificate of Compliance to sales contracts and rental agreements by one year.
From the new commencement date of 29 April 2015, new residential tenancy agreements cannot be entered into for NSW properties with a swimming pool or spa pool unless they have a valid Certificate of Compliance or relevant occupation certificate. To sell any property with a swimming pool or spa pool, a copy of the valid Certificate of Compliance or relevant occupation certificate must also be attached to the sale contract.
Regardless of whether you are planning to sell or rent your property, if you own a swimming pool or spa pool, you must register it on the NSW Government's swimming pool register. Registration is free and will help you keep up-to-date with pool safety messages and inspection requirements.
These requirements also apply to common property pools and spas, such as those in strata and community title schemes or residential parks. It is the responsibility of the owner, owners corporation, manager or operator of the common property to ensure that the pool complies with pool safety laws.
The Division of Local Government (DLG) is responsible for the Swimming Pools Amendment Act 2012. To find out more, visit the swimming pools register, or contact your local council.
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