Landlord responsibilities
As the owner of the property, you are responsible for ensuring that the tenancy is conducted in accordance with the Residential Tenancies Act 1987. The Tenancy handbook provides landlords and managing agents with more information about the rights and responsibilities of all parties under the Act.
One of the key requirements of the Act is that the tenant must be given a copy of the the Renting guide at or before entering into the residential tenancy agreement. The Renting guide is available in various community languages and tenants should receive a copy in the language most appropriate to their needs. Your agent can obtain free copies of the Renting guide in English and language versions from the Office of Fair Trading.
Use a licensed managing agent
All managing agents are required to be licensed by the Office of Fair Trading. You should ensure that the agent you are interested in using is properly licensed. Do a licence check online for any agent you are thinking of using or call 13 32 20.
Engaging a managing agent
A good managing agent should have a thorough knowledge and understanding of tenancy laws and assist you by ensuring your rights and responsibilities as the landlord are met.
A managing agent's responsibilities include:
- finding suitable tenants
- ensuring the tenancy agreement is correctly completed and signed
- lodging the rental bond with the Office of Fair Trading
- managing the tenancy for you on a day-to-day basis:
- arranging repairs to the property
- collecting the rent and maintaining accurate rent records and receipts
- conducting property inspections
- handling disputes that may arise.
- paying the rent to you less any costs and agency fees, either into your nominated bank account or by cheque.
If rent is paid to you directly into your bank account, it is your responsibility to check the balance regularly to ensure that rent is being deposited.
A managing agent must notify you immediately in writing if they become aware a tenant has breached the tenancy agreement.
Management Agency Agreement
When you engage an agent to manage your property, you will enter into a binding written contract called a Management Agency Agreement. The terms, fees and some conditions of the agreement are negotiable so shop around and compare the prices and services offered by a number of managing agents.
To save yourself time and effort, you can specify in the Agreement that only repairs costing more than a nominated amount (eg. $100) require your approval. This enables the agent to authorise minor repairs up to that amount.
Standard Management Agency Agreements usually contain a clause stating that a notice period applies to termination. It is in your interest to keep the notice period short, say a month or two. Agreements must be terminated in writing.
Agency fees
Most agents charge a fee based on a percentage of the gross weekly rental. This can be negotiated, but it is usually between 5 – 10%.
The agent usually sends you a monthly account, the account shows the amount of rent paid to the landlord less any costs and agency fee.
The cost of minor repairs is usually deducted from the rent and listed in your monthly statement as a separate item. Most agents will give you copies of receipts for repairs upon request.
It is common industry practice for managing agents to charge a letting or re-letting fee when new tenants are placed in a rental property. The normal fee is 1 week’s rent for 3 to 6 month leases and 2 week's rent for 12 month leases.
Don’t let problems with tenants escalate
If a problem arises at any point in the tenancy, taking a pro-active approach to resolving the issue may be an effective way to prevent the problem from escalating into a dispute. Minor problems can become major issues if not dealt with early enough.
Fair Trading encourages landlords and agents to intervene early when tenancy problems first emerge. For example, a tenant may be experiencing some kind of temporary personal crisis which is affecting their tenancy. Rather than take action in accordance with the tenancy agreement or the Act it may be more practical to provide the tenant with information on where to go for help, such as a Tenancy Advice and Advocacy Service.
Resolving problems quickly is not only good for tenants, it also benefits you the landlord by minimising the possibility of financial loss.
When you have problems
The first step in resolving a dispute is to discuss the matter with the parties involved. Ensure you have a clear understanding of your rights and responsibilities in relation to the dispute by checking the residential tenancy agreement, reading the Tenancy handbook or contacting Fair Trading.
If the dispute with your tenant cannot be resolved either on your own or with the assistance of the Office of Fair Trading, you may have to take the case to the Consumer Trader and Tenancy Tribunal (CTTT). The role of the CTTT is to quickly and effectively resolve disputes between tenants, landlords, traders and consumers.
For more information about resolving tenancy problems and the CTTT, contact Fair Trading.
Smoke alarms In residential premises
To enhance safety and minimise loss-of-life in building fires, the NSW Parliament enacted the Building Legislation Amendment (Smoke Alarms) Act in July 2005. The Act allows regulations to be made to require smoke alarms to be installed in existing buildings in which people sleep.
A smoke alarm is an effective early warning device designed to detect smoke and alert building occupants to the presence of a fire. Installed in the correct location, it increases the time available for safe escape.
From 1 May 2006, when the Environmental Planning and Assessment Amendment (Smoke Alarms) Regulation 2006 came into effect, owners of residential property are responsible for ensuring smoke alarms are installed.
The Smoke Alarms Regulation specifies which types of buildings will need smoke alarms installed, the types of alarms, where they are to be located and other matters. Contact details for more information about the requirements under the Regulation are listed in this factsheet.
Landlords and tenants
Under the Residential Tenancies Act and the Residential Tenancies (Residential Premises) Regulation:
- Landlords are responsible for the installation of smoke alarms in rented premises.
- Landlords have the right of access to rented premises to fit smoke alarms after giving the tenant at least 2 days notice.
- Neither the landlord nor the tenant are, except with reasonable excuse, permitted to remove or interfere with the operation of a smoke alarm fitted in the rented premises.
- Where a smoke alarm is of the type that has a replaceable battery, the landlord must put a new battery in at the commencement of a tenancy.
- After the tenancy begins, the tenant is responsible for replacing the battery if needed. However, if the tenant is physically unable to change the battery the tenant is required to notify the landlord as soon as practicable after becoming aware of the need for it to be replaced.
- The tenant is not responsible for the replacement of batteries in ‘hard-wired’ smoke alarm systems that have battery back-up. This is the responsibility of the landlord.
- The condition report section of the tenancy agreement must include a specific reference to smoke alarms so that tenants and landlords are able to note and comment on the presence of smoke alarms at the beginning and end of the tenancy.
IMPORTANT – Owners of residential property who rent out their premises as holiday accommodation are responsible for installing smoke alarms and replacing batteries. Strata scheme lot owners
In a strata scheme:
- Owners of lots can install smoke alarms in their lots without having to obtain approval of the owners corporation.
- There is an obligation on lot owners to repair any damage to common property caused by the installation of a smoke alarm.
Lot owners who rent out their strata scheme residential property should note their responsibilities as landlords in relation to smoke alarms under the Residential Tenancies Act and the Residential Tenancies (Residential Premises) Regulation.