There is more to being a landlord than merely collecting rent and keeping up with property maintenance. It's about having healthy relationships, communicating openly with one another, and trusting one another. To avoid running afoul of the laws that govern your state and your role as a landlord, it is essential to have a solid understanding of both your rights and your obligations.
When you are a homeowner or an investor, renting out a property can be a legally convoluted procedure that can be difficult to understand. You run the risk of getting dragged into an ugly court battle that you could have avoided if you were more informed on the rights and responsibilities of your landlord. The most important rights and responsibilities of landlords in Australia are outlined here. Therefore, the procedure is going to be somewhat less difficult for those of you who are thinking about buying an investment property or renting out your current residence.
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It is critical that you have a solid understanding of the rules that define your responsibilities as a landlord.
Your entry rights as a landlord
You might have the need to stop in whenever the mood strikes you in order to see how well your tenant is taking care of your property, but unfortunately, this is not possible. The local legislation will specify how often you are allowed to do this and how you should go about doing it.
Only under specific conditions are you permitted to enter the property if you are the landlord. This can be necessary due to a dire situation or with the permission of your tenant. Naturally, you have the right to access the property for other reasons as well, such as carrying out routine inspections, provided that you notify the tenant in advance in the appropriate manner.
For instance, in the Canadian province of Victoria, a landlord has the legal right to enter the rented property so long as the tenant has consented to the visit and been consulted within the previous week.
There may be times when you are required to enter your property with only a moment's notice. Within twenty-four hours of the landlord giving the tenant written notice, the landlord has the right to enter the rental property in Victoria for any of the following reasons:
- You are responsible for carrying out the responsibilities outlined in the Residential Tenancy Agreement, the Residential Tenancies Act of 1997, or any other applicable act.
- Consider the property's worth.
- Take any potential purchasers or lenders on a tour of the property.
- Conduct a tour of the property for prospective tenants.
- Investigate and validate a reasonable suspicion that the renter has not fulfilled their responsibilities as a tenant.
- One comprehensive check-in should take place once every six months, although it shouldn't take place in the first three months of the tenancy.
When conditions like these exist, the Landlord is permitted to access the premises even if the Tenant is not there, provided that all of the criteria for written notices have been satisfied. If the tenant does not give permission, the landlord does not have the authority to enter the rented property in an unreasonable manner or to remain there for a longer period of time than is required.
Repairs and maintenance
You, as the landlord, are typically the one who is responsible for making arrangements for and/or paying for any essential maintenance and repairs. This is the case the majority of the time.
There will be times when either your tenant or your property manager will get in touch with you to let you know that they are going to need you to make a repair to something in your rental property. When this happens, you should take the initiative to make the necessary repairs as soon as possible. There are surely a few of these that need your immediate attention right now, even though it's probable that not all of them do.
During the time that the lease is in effect, it is your responsibility to ensure that the rental property is maintained in an acceptable condition of repair. If, on the other hand, your tenant has harmed the property in some way, it is highly likely that they will be required to pay the expenses associated with the necessary repairs to the property. It is essential to keep in mind that there are specific guidelines to follow while performing maintenance that falls into the categories of either urgent or emergency.
It is of the utmost necessity that you are aware of the fact that as a landlord, you are only required to make repairs to the property and not upgrades to it. Knowing this is of the utmost importance because it is something that you are responsible for doing. In contrast, non-urgent maintenance does not cover changes that a tenant just desires, such as requesting new carpet or fresh paint, unless the renter agreed this prior to moving in. Examples of such renovations include asking new paint or new carpet. The following are some examples of requests for improvements of this type: Modifications that a renter just desires are one type of item that is an example of something that might be considered to come under this category.
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When you need to get in touch with those who have requested emergency repairs, you won't have a lot of spare time on your hands. Your tenant has the legal right to arrange for these repairs to be made up to the value of $1,000 if you do nothing to rectify the situation, and they can do so at your expense if you do nothing to rectify the situation. If you do nothing to rectify the situation, your tenant has the legal right to arrange for these repairs to be made.
If you are unsure as to what constitutes a "urgent repair," you should talk to either your property manager or the consumer affairs office in your region. Both of these places can provide you with more information.
In Victoria, maintenance tasks that do not fall under the category of an emergency are expected to be finished within 14 calendar days. In New South Wales, the phrase "at a reasonable period" is used as a condition in many situations. It has been proposed that taking action as soon as possible would be preferable in the long run. If you do not attend to repairs that are not an emergency, your tenant has the right to make a request to the tribunal for an inspection and subsequent report. If you do not attend to repairs, your tenant has this right. In Victoria, a tenant has sixty days from the time the problem was discovered to file an application with the tribunal requesting a remedy order.
Despite the fact that they may have the intention of withholding rent while they wait for repairs to be completed due to legal limits, tenants are unable to do so in the majority of circumstances even though they may have the desire to do so.
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Bills for utilities and other expenses
This is an intriguing question: in what circumstances is the renter rather than the landlord responsible for paying utilities such as water, electricity, and gas? In most cases, tenants are only held financially responsible for the costs of utilities that are specifically metered for their consumption, such as water. The Landlord is responsible for paying the majority of the remaining expenses, which may include land taxes and council rates.
What sorts of modifications or additions are available?
If you are renting a property, you are required to obtain the permission of the Landlord before making any improvements to the premises or installing any new fixtures. Any installations or alterations that you make will be at your expense unless you and the Landlord come to an agreement to the contrary. A window, door, or a toilet, for example, are all examples of fixtures because they are permanently attached to or a part of the location where they are located.
Protection and locking mechanisms for the rented property
To a greater or lesser extent, it is the responsibility of the landlord to ensure that the rented property is adequately protected by installing locks on all of the windows and doors. At the commencement of the tenancy, the tenant ought to be provided with a copy of the property's keys. If either the renter or the landlord wants to change the locks, they will need the permission of the other party in order to do so in the vast majority of situations.
The Rent
You, as the Landlord, have the ability to require payment of rent on whatever schedule you see appropriate, whether that be weekly, bimonthly, or monthly. When you receive payments for the rental, including the security deposit, you should ensure that they are accompanied by detailed and signed receipts. On the receipts, the date, the amount received, the address of the property, the name of the renter, and the length of time for which the payment has been made should all be included.
Making certain that your rental homes are occupied by high-quality individuals at all times is one of the most essential things that you can do as a landlord. These tenants should not only have the financial resources necessary to pay their rent but also the motivation to maintain their properties in a respectable manner.
The selection of tenants is an art, and one in which you can profit from the assistance of a property manager who is both skilled and experienced in the field.
They are able to help you with any documentation that has to be finished, and if the rent is not paid on time, they will monitor the situation for you. In addition, they can assist you with anything else that you may need.
You, as the landlord, have the legal right to insist that the rent for your property be paid on or before the due date and in accordance with the terms that were outlined in the lease. You can also ask that the rent be paid in the exact amount that was agreed upon in the lease.
In spite of the fact that the laws that govern this subject vary from one state to the next, a renter is considered to be "in arrears" if they have not paid their rent by the day that it was due to the day that it was due.
If the renters have fallen behind on their rent payments for more than 14 days, the landlords have the legal right to issue the tenants with the requisite notices to vacate the premises and force them out of the property.
The fact that the landlord is still responsible for making the mortgage payment should always be kept in mind by landlords. This is true even in the event that tenants do not pay their rent or pay it late. Since the landlord is always responsible for this, the financial plan for the landlord should accurately reflect the costs associated with this responsibility.
When is it OK to raise the rent?
However, the majority of landlords are trying to maximise their investment returns by taking advantage of the tight vacancy market. Tenants are always of the opinion that the amount of rent they pay is too high, but landlords are trying to maximise their investment returns. The difficulty lies in the fact that you are unable to simply increase the rent whenever you make the decision to do so.
In addition, there is legislation that governs the timing of rent increases that is now in effect across the country. On the other hand, in most circumstances, if a tenant is on a periodic lease, the landlord is permitted to raise the rent once every six months so long as the tenant is given notice of the increase at least two months in advance. This is the case only if the landlord gives the tenant notice of the increase in writing.
If the renter is currently bound by a tenancy agreement with a predetermined period, such as a lease for 12 months, then the rent cannot be increased until the term of the tenant's current lease has been fulfilled.
Tenants have the legal right to object to any proposed increases in rent and to request that an official from the state government conduct an investigation into whether or not the proposed increases are appropriate.
Landlords need to consider the potential benefits of each alternative before making a decision regarding whether or not to raise the rent or whether or not to retain tenants in their buildings for a longer amount of time.
The process of switching tenancies is time-consuming and comes with additional costs attached to it, such as the loss of rent during the vacancy, reletting fees, and marketing charges – the sum of which could be greater than the proposed additional rent would bring in over the course of six months or an entire year if you were to calculate it over a longer period of time.
Keeping all of this information in mind, landlords need to determine whether or not an additional $5 or $10 per week would result in a difference in their earnings that is meaningful enough to warrant their attention.
This is of the utmost importance during times when there is an excess of rental accommodation available relative to the number of people looking for it. Tenants now have a wider number of options available to them, and as a consequence, they may decide to move to a location that is simply less expensive.
In this kind of situation, it's possible that it would be more prudent to hold off on raising the rent for another six or twelve months before making the adjustment.
Always keep in mind that the type of tenants you want are long-term tenants who pay their rent on time and take good care of your property. Since extended periods of vacancy are not what any landlord wants for their investment property, it is important to remember that the type of people you want are those tenants.
If you have a normal lease, for instance, you are not permitted to raise your rent until the conclusion of the stipulated term, unless your agreement specifically indicates otherwise.
In any event, you are only permitted to raise the rent once every six months, and you or your agent are required to provide the tenant with at least a one-month notice prior to implementing any planned rent increases.
What legal options do you have as a landlord if a tenant stops making payments on their rent?
The worst case scenario for a landlord is a tenant who has not paid rent for several weeks and who refuses to move out of the rental unit. This is one of the worst-case scenarios that could potentially occur to a landlord.
Unhappily, a good tenant has the ability to quickly develop into a poor tenant, even if they have been a nice tenant in the past.
This may be brought on by the individual's personal concerns, health issues, drug usage, the loss of their employment, or a divorce. Other potential causes include:
Not only do you, as a real estate investor, run the risk of losing out on your rental revenue, which you are presumably banking on to help pay your mortgage, but it's also conceivable that you won't be able to access your property or find new renters until your present tenants vacate the premises. If this happens, you will lose out on both your rental income and your ability to find new tenants. Because of this, your financial situation is going to get more difficult.
And as a direct result of this, you expose yourself to the possibility of suffering significant financial losses.
What legal recourse do you have available to you as a landlord in the event that something comparable takes place?
Before you take on a renter, you need to make sure that everything is in order. This should be your first priority.
Be sure that your property manager checks the potential tenant's rental history by using national rental databases, and be wary of prospective renters who take on excessive amounts of debt.
I believe that it is of the utmost significance to hire a competent property manager so that you can open up a clear channel of communication with your renter. I consider this to be one of the most important aspects of being a landlord.
We can only hold out hope that they have carried out routine inspections of your property and promptly replied to any requests made by tenants.
As a consequence of this, it ought to become somewhat less difficult to communicate throughout trying times because of the conditions.
Because tenancy laws is a subject of state law, you will need the assistance of an experienced property manager in order to watch out for your best interests and make sure that you continue to remain in compliance with the law whenever an unpleasant scenario of this sort emerges.
Investigate the reason(s) why your renter is behind on their rent.
By examining the tenant's trust bank account, your property manager should be aware of the day on which your renter falls behind on their rent payments.
The first thing that they need to do is figure out why your tenant isn't paying rent, then they need to start asking polite questions in order to help you minimize your financial loss.
It's possible that something fairly straightforward and easy to address is the reason you haven't received the rent, such as:
- a simple case of forgetting;
- issues with the flow of cash temporarily;
- a misunderstanding amongst joint tenants.
Or, it might refer to something that is more involved and has a longer-term impact, such as:
- your tenant has lost their job
- your tenants are a couple and have split up
- Your tenant is struggling to make it through difficult personal issues (such as bereavement or work-related stress).
What the next step should be for your property management
A renter is said to be "in arrears" with their rent payments if they do not make them by the date that they are supposed to.
If a tenant in Victoria falls more than 14 days behind on their rent payments, the landlord has the right to serve them with an official notice to leave the premises.
Because the number of days that a tenant must be behind on their rent before these notices can be delivered differs from state to state in Australia, it is imperative that you are informed of the tenancy rules that apply in your area.
On the other hand, a landlord or property management cannot remove a tenant without first following the appropriate procedures.
In the first place, the notice has to be formulated appropriately and sent appropriately, which includes being delivered by registered mail.
The dispute should then be filed before the appropriate tenancy authority, such as the Victorian Civil and Administrative Tribunal or the New South Wales Civil and Administrative Tribunal.
After that, the court may decide to issue a warrant of possession to evict the renter from their property.
If a tenant falls behind on their rent, the sooner you hear about it, the sooner you can seek to rectify the issue and limit any financial loss. Therefore, it is important to check arrears on a daily basis in order to try and head off potential problems before they arise.
After three days of being late with their rent payment, we contact the renters by phone and email and then send them a breach notice explaining that they have not paid their rent on time as required by the lease.
The court system should only be used as a last option.
Providing the renter with the choice to make partial rental payments or payments at a more frequent interval, such as weekly, can frequently alleviate the problem and help the tenant get through what is hopefully only a temporary tough patch.
If you are forced to evict the renter, you will very certainly be permitted to keep some or all of the security deposit to make up for the money you lost.
In addition, the additional damage ought to be covered by the insurance policy held by your landlord.
How can you put an end to the tenancy?
There are a few different predetermined ways that a tenancy agreement can be terminated, and these ways can vary slightly from one state to the next. Even if the contract specifies a specific termination date, you still need to provide notice in order to stop the tenancy.
If you want to discontinue the tenancy but the law protects the tenant's right to remain in the property, you should examine the following before you do anything else:
- The grounds that are acceptable in your state for providing notice to terminate a rental agreement and giving it.
- If the notification needs to be issued on a form or an official notice, which one should it be?
- How much advance notice do you need to give before the agreement is terminated.
Tenants are always of the opinion that the amount of rent they pay is too high, but the majority of landlords seek to maximize their investment returns by taking advantage of the tight vacancy market. The problem is that you are unable to just raise the rent anytime you choose to do so.
If you have a normal lease, for instance, you are not permitted to raise your rent until the conclusion of the stipulated term, unless your agreement specifically indicates otherwise.
In any event, you are only permitted to raise the rent once every six months, and you or your agent are required to provide the tenant with at least a one-month notice prior to implementing any planned rent increases.
When can you increase the rent?
Tenants are always of the opinion that the amount of rent they pay is too high, but the majority of landlords seek to maximize their investment returns by taking advantage of the tight vacancy market. The problem is that you are unable to just raise the rent anytime you choose to do so.
If you have a normal lease, for instance, you are not permitted to raise your rent until the conclusion of the stipulated term, unless your agreement specifically indicates otherwise.
In any event, you are only permitted to raise the rent once every six months, and you or your agent are required to provide the tenant with at least a one-month notice prior to implementing any planned rent increases.
Why should you collect a rental bond?
At the beginning of their tenancy, tenants are responsible for paying security deposits. They are a goodwill payment that is held in trust by the particular state government rental authority and are used as a form of financial protection for the landlord in the event that the tenant violates the conditions of the lease agreement.
This protects you in the event that the tenant does not pay the whole amount of rent owed, destroys your property, or fails to maintain it in a satisfactory state, as you will be able to retrieve some or all of the bond once the tenancy has ended.
At the beginning of a new lease, you are responsible for providing a bond lodgement form that both the tenant and the landlord must fill out. You are the one who is responsible for seeing to it that it is submitted to the appropriate state authority within the allotted time frame.
In most cases, the sum of the bond equals approximately four weeks' worth of rent. Nevertheless, it can be different depending on the kind of residence.
You need to ensure the safety of your property by requiring your tenants to pay a bond. There are several compelling explanations for this: You have the right to keep some or all of your tenant's security deposit at the conclusion of the tenancy if the renter did not properly maintain the cleanliness of the rental property, caused damage to your property, or did not pay the rent. This bond needs to be submitted to the body in charge of residential tenancy bonds in your state. During the duration of the tenancy, the authority will be responsible for holding the bond on both your and the tenant's behalf.
The majority of the time, the bond will be equal to one month's worth of rent. The security deposit, however, may be higher than that if the rental property was formerly your primary residence or if it is a particularly expensive piece of real estate. After the conclusion of the tenancy, you have the ability to make a claim against the security deposit if the property is not in the same condition as it was when the tenancy first began. Nevertheless, you should be aware of the concept that is typically referred to as "fair wear and tear." These concerns cannot be accepted as valid.
On the other hand, landlords are not allowed to charge renters for any reasonable wear and tear on the property that may have taken place throughout the course of the tenancy.
Curtains that have lost their colour and a kitchen benchtop that has worn down are also examples of fair wear.
On the other hand, if there were no curtains or if there were burns or cuts on the countertop, this would probably be deemed damage, and the tenant would be responsible for paying to have these things repaired.
At the end of a tenancy, if the tenant leaves the property in good shape and it is clean, then the landlord and the tenant can come to an agreement that the renter will receive the whole amount of their security deposit back.
If there is any damage, then the process becomes a little bit more complicated because both parties need to agree that harm occurred during the tenancy as well as the price of the repairs. If there is any damage, then the process becomes a little bit more complicated.
For instance, the Landlord may file a claim on the bond for the following reasons:
- Lack of payment of the rent;
- Damage incurred as a result of the actions of the renter or any of their guests;
- Costs associated with cleaning;
- The tenant vacates the premises without prior notice;
- A situation in which the landlord is compelled to pay the tenant's bills;
- The loss of the landlord's property;
- The damage that was caused by your tenant or visitors of your tenant;
- Expenses related to cleaning; your tenant has abandoned the property;
- Your renter is moving out, leaving you responsible for the rent and other bills that they should have paid;
- The loss of your property;
- Rent that is overdue.
What happens if there is a divergence of opinion regarding the bond?
You are required to submit an application to the state tribunal in the event that there is a disagreement regarding the bond or if you want to claim compensation in addition to the bond. The NSW Civil and Administrative Tribunal is the body in charge of adjudication in that state (NCAT). In order to submit an application in the state of Victoria, you will need to go to the Victorian Civil and Administrative Tribunal (VCAT). There is at least one respective body for each state and territory.
When you have a solid understanding of the essential rights and obligations that come with being a landlord, the prospect of owning an investment property should feel much less overwhelming to you. In the event that you and your tenants do find yourselves engaged in a legal dispute, there are several different avenues open to you for resolving the conflict, including mediation.
Within ten business days of the tenant moving out, the landlord in Victoria is required to file an application with the Victorian Civil & Administrative Tribunal if there is a dispute regarding the security deposit or if the landlord wishes to seek compensation in addition to the security deposit.
At this point in the tenancy, it is of the utmost significance to have both completed and photographic evidence of the full condition report that was completed at the beginning of the tenancy. It can be used as evidence to support the landlord or their agent's argument that all or part of the security deposit should be used to pay for cleaning, repairing, or replacing things that were lost or damaged.
Because the Australian property legislation governing renters and landlords varies from state to state, it is imperative that you check with the tenancy authorities in your area.
How can you put an end to the tenancy agreement?
There are a few different predetermined ways that a tenancy agreement can be terminated, and these ways can vary slightly from one state to the next. You are required to provide notice in order to terminate the tenancy, regardless of whether or not the contract specifies a certain termination date.
If you want to discontinue the tenancy but the law protects the tenant's right to remain in the property, you should examine the following before you do anything else:
The circumstances under which you are permitted to provide notice to terminate a tenancy in your state.
If the notification needs to be issued on a form or an official notice, which one should it be?
How much notice do you have to give before the agreement is terminated and for how long?
There are a few different predetermined ways that a tenancy agreement can be terminated, and these ways can vary slightly from one state to the next. You are required to provide notice in order to terminate the tenancy, regardless of whether or not the contract specifies a certain termination date.
If you want to discontinue the tenancy but the law protects the tenant's right to remain in the property, you should examine the following before you do anything else:
The circumstances under which you are permitted to provide notice to terminate a tenancy in your state.
If the notification needs to be issued on a form or an official notice, which one should it be?
How much advance notice do you need to give before the agreement is terminated.
Discrimination
You have the ability to select the tenant that you believe will be the best fit for your rental property as you are the landlord. Nevertheless, discriminating against people or harassing them is against the law because every state has passed legislation mandating equal opportunity. This means that you are prohibited from selecting tenants on the basis of their age, ethnicity, religion, sex, or a whole variety of other discriminatory factors. Additionally, you are prohibited from selecting tenants based on sex. If you do, you could be responsible to pay damages or fines.
You should seriously consider working with a qualified property manager to take care of your real estate holdings if you want to get the most out of your investments while reducing the amount of stress you're under. You won't have to deal with the day-to-day inconveniences of finding tenants, negotiating agreements, organizing maintenance, and, if required, sorting out problems at the tribunal if you use this method because all communication with the tenant should be directed through them.
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