PROPERTY MANAGEMENT - INTRODUCTION -ACT EXAMPLE


The following has been written to the ACT's tenancy system. Equivalent legislation, rules and procedures should apply to other states and territory.

REMENTS OF THE TENANCY SYSTEM

Tenancy legislation should serve the interests of both lessors and tenants. Where these interests diverge, the legislation should recognise both interestsand work towards a fair and reasonable balance between the two.

The ACT Landlord and Tenant Act 1949 (LTA) regulates only private tenancies in the ACT. Government housing provided by the ACT Housing Trust, the Department of Defence, the Australian Federal Police, etc are nor covered by the Act.

Not everybody who pays rent will be covered by the Act. To be covered the parties need to have a written or oral lease. If the tenant is sharing someone's home he/she will most likely be a boarder or a lodger (see later). Boarders and lodgers usually have a contract called a licence. If the tenant is sharing a kitchen or bathroom, but otherwise living independently, he/she is most likely a tenant.

Many people in the ACT live in 'group houses' where the adult residents are not personally connected with each other. This can lead to some difficulty when one of the tenants leaves and is replaced by another person. The rights and obligations of any new resident depend on whether he/she is a licensee, a subtenant or a tenant.

Landlords usually rent their properties through agents. Therefore any reference to a landlord in this brochure also applies to an agent of a landlord if any.

Rights and obligations

Tenants' and landlords’ rights and obligations depend partly on the type of lease they have, and partly on the special rights set out in the Act.

Lease

A lease (also called a tenancy agreement) is a contract that gives a tenant (rent payer) the right to live in the landlord's (owner's) property.

The Act covers both written and verbal leases. Written leases provide clearer obligations and rights for both parties. If the If the lease is in writing the landlord must give the tenant a copy of the lease within 28 days after it is signed.

The landlord usually draws up the lease so it is important for the tenant to read it carefully before signing. Tenants should also take note of important conditions such as whether or not they are allowed to keep pets or sublet the premises to someone else. Any additional conditions should be written down and signed by both parties

The lease also sets out the conditions of the tenancy. Usually a tenant's main obligations under the lease are to pay the rent on time and to keep the property in good condition. There will be other conditions covering things such as repairs and inspections. Tenants and landlords should agree about which party will pay outgoings such as excess water rates.

Any condition in the lease that conflicts with a provision of the Act will not be valid and cannot be enforced by the landlord. For example. if the landlord wants to issue the tenant with a Notice to Quit he/she must give the tenant the amount of notice specified in the Act. Any provisions in the lease providing for a shorter length of notice do not apply.

When a fixed term provision of a lease expires tenants do not automatically have to leave the property. A landlord cannot force a tenant to leave simply because the lease has expired. The landlord can ask the tenant to go, however the tenant does not have to agree. A landlord may even suggest that the tenant sign a new lease when the old one expires, but he/she can't force the tenant to sign one.

The conditions of the original lease will continue until the tenant agrees to leave; gives the landlord notice of his or her intention to leave or the landlord has an order from the Court stating that the tenant must leave. This process is dealt with in more detail under the heading Eviction later.

Bond

A bond is a landlord's security in case a tenant leaves owing rent or does damage that needs to be repaired before new tenants can move into the property. it is not meant to cover a landlord's potential loss other than that associated with rent owed or damage caused during the tenancy.

A landlord does nor have to ask a tenant for a bond. However, if the landlord does, the bond cannot be more than 4 weeks' rent. A bond is a once only payment that cannot be increased even if the rent goes up or the lease is renewed or extended.

The landlord must give the tenant a receipt for the bond and the Act requires that all bond money must be lodged with the Office of Rental Bonds within 10 days of the commencement of the tenancy or 30 days in the case of land agents. Tenants have a right under the law to receive a receipt from the landlord for the bond as this is their proof of payment.

The Office of Rental Bonds

If the tenant has not received an Advice of Lodgement of Bond form from the Office of Rental Bonds (ORB), he/she can contact the ORB to find out whether the bond has been sent in. Landlords should note that there is a maximum $5 000 penalty for failure to lodge a bond.

Condition report

Landlords and tenants must complete a Condition of Premises Report which is lodged with the ORB at the same time as the bond. An inventory of goods leased with the property may also be submitted.

The Condition Report is an important document because it lists all the damage that was there before the tenant moved into the property. The Condition Report should be prepared thoroughly. The tenant should check the report carefully and write down any disagreement he/she has about the condition of any item before he/she signs it. For example stains and holes in the carpet and the condition of the walls, anything that could be disputed at the end of the tenancy should be noted.

The landlord should give the tenant 3 copies of the Condition Report no later than 1 day after the tenant signs the lease. After the tenant signs the form he/she should keep 1 copy, and must return the other 2 copies to the landlord within 3 days.

If the landlord fails to give the tenant a Condition Report, the tenant should complete one of his/her own and return it to the ORB as soon as possible.

Reclaiming the bond

At the end of the tenancy the landlord usually inspects the property to complete another Condition Report and note any changes in its condition.

It is in the tenant’s interest to ensure that this condition report and an inventory are completed at the end of the tenancy. This, together with the original Condition of Premises Report, can be used as evidence of exactly what damage, if any, was done during the tenancy.

After the inspection the landlord may want to claim some or all of the bond if he/she thinks there is evidence of loss or damage caused by the tenant. The landlord cannot claim for fair wear and tear. The limits on the landlord’s right to claim money from the bond is discussed under the heading Deductions from Bonds later.

If the landlord and tenant can agree about the amount of bond that should be refunded, then they can sign a Claim for Refund of Bond form. This sets out who is to receive the bond money and what part if any, of the bond is disputed. If a tenant does not agree with a landlord's claim for the bond, he/she should not sign the claim for bond form.

The ORB is able to give the landlord or tenant any undisputed money that is owed to them from the bond over the counter. A cheque will be sent through the mail for claims lodged by post. Any bond money which is in dispute will be kept by the ORB until the dispute is resolved.

If the tenant disagrees with the landlord over the distribution of the bond and will not sign the Claim for Refund of Bond form provided by the landlord, he/she can lodge his/her own claim form. Similarly, a landlord can lodge his/her own form if the tenant will not sign.

Depending on whose claim form was received first, the ORB will write to the other party and advise them of receipt of the claim for the bond. The party receiving the letter has 10 days n which to dispute the claim. If no reply is received the bond will be paid out according to the claim.

Resolving a bond dispute

Tenants and landlords should find out about their rights and obligations before agreeing on the division of the bond. If there is a dispute about the bond the ORB will refer the matter to the Conflict Resolution Service (CRS). The CRS will invite the landlord and the tenant to confer with trained mediators so that a satisfactory agreement might be reached.

This service is free and optional. Nothing that is said or done at the mediation session can be used in any later Court hearing.

If either party does nor wish to attend the CRS, he/she can apply for a hearing in the Small Claims Court (SCC). The Magistrate will decide how the bond should be distributed.

What can a landlord claim from the bond? A landlord can only claim:


Unpaid rent

Some leases contain special provisions that allow the landlord or tenant to break the lease during the fixed term period of the lease without penalty. However, in most cases, the tenant will be legally bound to keep paying rent until the lease has expired or the landlord is able to find another tenant, whichever comes sooner.

If a tenant does have to break the lease, the landlord may want to claim more than just the lost rent. He/she may ask the tenant for check-out and advertising costs. These cannot be taken out of the bond. They are not rent. The landlord must make a separate claim for them as outlined below.

Sometimes the landlord may agree to end the lease before the agreed time. Tenants should give the landlord adequate written notice of the date on which they would like to leave. If the landlord agrees to early termination of the lease, the tenant should get the agreement in writing.

Repairs and restoration

A landlord cannot automatically claim the cost of this work from the bond. He or she should immediately draw to the tenant S attention any damage and give the tenant the option of arranging the repairs or cleaning up the place. It is important that the tenant make a genuine attempt to leave the property in good repair, at the end of the tenancy.

If a landlord undertakes repairs, then the costs must be substantiated. The landlord should give. the tenant copies of receipts for work done and materials used. A landlord cannot claim for damage arising from fair wear and tear.

What is fair wear and tear?

This is a technical term used in leases and in the Act to describe special kinds of damage. Fair wear covers damage caused by normal human use of the property. For example, some stains on the carpet will be fair wear and some will not. Carpet needs special care as it is a very expensive item to replace.

If a tenant spills something on it, the tenant must take immediate steps to clean it up. However, sometimes it may be reasonable to expect carpet wear in heavy traffic areas such as hallways to be greater than that of the rest of the carpeted area. A tenant could reasonably claim this kind of deterioration to be fair wear and tear. However, oil stains on a lounge room carpet suggest that the tenant has not made
ordinary use of the property.

Tear covers damage caused by the ordinary operation of natural forces on the property. For example, if a tile blows off the roof during a storm a tenant will not be required to pay to have the roof repaired or for any further immediate damage caused to the property because the tile is not in place. However, a tenant may be liable for later damage caused to the property if he/she did not take steps to promptly inform the landlord about the hole in the roof.

What is considered fair wear and tear usually depends on the facts of each case. Ultimately, if the landlord and tenant cannot agree, it may be necessary to have it decided by the Magistrate in the Small Claims Court. The Magistrate may take into account:


The Magistrate will also take note of the Condition Report lodged with the ORB, so it is essential that both landlord and tenant complete it carefully.

How does a Landlord get money owed under the lease that can't be taken out of the bond?

Because a lease is a contract, a landlord can take action in the Small Claims Court to recover any money owed to him or her for commitments the tenant has made.

If a landlord claims that the tenant owes him/her money the claim should be made in writing. The letter should set out the total amount owed and list all the items for which he/she is claiming. Copies of receipts for work done or materials used and outstanding accounts should be included.

Tenants who pay any money to the landlord should always get a receipt for it.

Many claims about 'damage' to property can be resolved by the landlord and tenant discussing the matter. The Conflict Resolution Service is able to provide a trained mediator to assist in these negotiations. Tenants can also seek advice about their rights from the ACT Consumer Affairs Bureau or the Tenant's Advice Service.

If the landlord and tenant can't agree, it may be necessary for the matter to be resolved in the Small Claims Court. Either the landlord or the tenant can request the Court to consider the claim. The landlord can seek an order from the Magistrate about how much the tenant owes. The tenant can ask the Magistrate for a declaration about what, if anything, is owed.

What can a Landlord claim?

Tenants often have conditions in their lease which make them liable to pay for any damage that has been caused during their tenancy, including fair wear and tear. However, the Act says that tenants cannot be required to make improvements to the property.

Improvements

What is an improvement will depend on the circumstances and is ultimately for the Court to decide. For example a lease might say that the tenant must have the carpets professionally shampooed before he/she leaves. If the carpet was new, or had just been professionally cleaned when the tenant moved in, then professional cleaning probably won't improve the property and the tenant may have to pay the cost of the cleaning. However, if a tenant breaks an ordinary glass window he/she can't be required to pay for a plate glass replacement.

Reletting fees

Leases sometime contain a clause that says that if the tenant breaks the lease he/she must pay one or two weeks rent as a reletting fee. However, blanket reletting fees are illegal. A landlord can't deduct reletting fees from the bond and neither can he/she claim such a fee as a penalty under the lease.

A landlord is entitled to claim from the tenant the real cost of finding a new tenant. This could include advertising, checkout costs and any loss of rent. Landlords should provide proof of this expenditure to tenants.

Rent

A tenant who does not pay his/her rent in accordance with the terms of the lease will usually be in breach of it unless the landlord has expressly agreed to a change in the method of payment or the withholding of rent. Tenants who withhold
rent for things such as repairs may risk eviction as failure to pay rent for certain set periods of time is a ground for eviction (see Eviction).

A landlord can only raise the rent once every twelve months and must give the tenant 60 days written notice of any rent increase. However, under the LTA there is no restriction on how much the landlord can charge.

Outrageous rent increases might be considered to be unconscionable conduct under s13 of the Fair Trading Act. Tenants might be able to sue a landlord if they suffer any loss or damage as a result of an unjustifiable rise in the rent.

Tenants who have received proper notice of a rent increase and who do not wish to continue their tenancy at the higher rent must write to the landlord no less than 14 days before the rent would go up. The tenant must tell the landlord that he/she is ending the lease, effective on or before the day the rent would go up. If the tenant gives this notice the landlord cannot claim any damages or compensation for early termination of tenancy.

Inspections and quiet enjoyment

This important part of the tenancy system is considered in detail below. The landlord is entitled to make inspections as provided for in the lease. Some leases do not say when a landlord can inspect and how much notice should be given before an inspection. In these cases, the landlord may inspect twice in any 12 month period as provided for by the Real Property Act.

In most instances the landlord may not usually enter the house without the tenant’s permission. The landlord's right to inspect under the Landlord and Tenant Act is limited by the quiet enjoyment provisions of the Act and general contract law. A lease is a contract. Subject to the conditions agreed by the parties, the tenant has right to exclusive possession of the property.

Once a lease commences the tenant has a right to make the premises their home. The property becomes his/her 'castle' for the term of the lease and the tenant has the right to enjoy the property without undue interference by the landlord.

Unless there is an emergency, when the landlord is on the property without the permission of the tenant, he/she is trespassing. If the tenant suffers any loss or damage because of a breach of the quiet enjoyment provisions of the lease, he/she can sue the landlord and/or end the lease without being liable for breach of contract.

Repairs

All that the LTA requires is that the property be in fair and tenantable repair at the date of letting. If the property falls into disrepair tenants have to rely on the provisions of their leases or the quiet enjoyment provisions of the Act to get repair work done.

If a property becomes damaged to the point where the tenant no longer has the ordinary use and enjoyment of it, the tenant may seek to have the landlord prosecuted for a breach of the quiet enjoyment provisions of the Act.

Tenants should not hold back rent if the landlord fails to make repairs or reimburse them for repairs that they have paid for. However; if tenants do pay for repairs they can take the landlord to Court to get their money back.

Most leases contain provisions that require tenants to seek the approval of the landlord before undertaking any repairs to the property. If a tenant makes unauthorised repairs, the tenant may be liable for any damage he or she caused.

SUBLETTING AND ASSIGNMENT

Subletting

Leases often contain a provision that requires the tenant to seek the approval of the landlord before sub-letting (ie letting some or all of the property t0 another person). When a landlord agrees to allow a tenant to sub-let, he/she is agreeing to the setting up of a separate landlord and tenant relationship between the tenant and the sub-tenant.

Assignment

Assignment is a legal word which describes the transfer of all of a tenant's rights and obligations under a lease to someone else.

Eviction

As noted above, when a written lease expires a tenant does not automatically have to leave the premises. The landlord must have a valid reason for asking the tenant to leave. Even then a landlord cannot force a tenant to leave. The landlord must get an order for possession of the property from the ACT Magistrates Court.

If a tenant does not vacate when properly requested to do so by a landlord for valid reasons, the tenant may be liable for damages that the landlord suffers as a consequence.

Damages may include loss of rent and legal costs of enforcing the eviction.

Likewise, if a tenant is wrongly requested to move and does so, the landlord may be liable any damages suffered by the tenant. Damages may include removal and relocation costs associated with entering into a new tenancy.

Valid reasons for ending a tenancy

The Act sets our 15 reasons for issuing a Notice to Quit. These reasons include:

landlord.

Or, that the landlord:


Issuing a valid notice to quit during a fixed term tenancy

Every Notice to Quit must be in writing and state the ground or grounds in the Act on which the landlord is relying. Landlords cannot give a valid notice to quit for a fixed term tenancy unless the ground they rely on is listed in the lease as well as in the Act.

The Notice to Quit must give a minimum of 7 days notice for every 6 month period of occupation. However, 30 days is the maximum period of notice that is required and 7 days is the minimum. There are some exceptions to this rule.

Issuing a valid notice to quit during a periodic tenancy

The procedure is the same as for a fixed term tenancy, but the landlord may rely solely on the grounds listed in the Act.

Getting an Order for Possession

Only a magistrate can “evict” a tenant. If the tenant is served with a valid Notice to Quit and does not leave the property, the landlord must go to the Magistrates Court to get an order for possession.

Both landlord and tenant will be summonsed to Court. The Magistrate may take into account any hardship that might be suffered by either the landlord or the. tenant if the order is or is not given.

Tenants can also challenge the Notice to Quit especia1ly if they do not believe that the reason the landlord has given is valid.

If the Court refuses to order an eviction, the landlord is prevented from giving another Notice to Quit on any grounds for 6 months unless he/she goes back to court for permission to do so.

Breaking the lease

As noted above, most leases are for an agreed period of time. Some leases contain special provisions which allow the landlord or tenant to break the lease without penalty. However, in most cases the tenant will be legally bound to keep paying rent until the lease has expired or the landlord is able to find another tenant, whichever comes sooner.

If a tenant does have to break the lease the landlord may want to claim more than just the lost rent. He/she may ask the tenant for any loss that has arisen as a result of the breaking of the lease. Such costs could include advertising and reletting costs. These cannot be taken out of the bond. They are not rent. The landlord must make a separate claim for them.

Because it is a landlord's duty to mitigate his/her loss, he/she should only claim for unpaid rent if he/she has genuinely been unable to find a new tenant.

Sometimes the landlord may agree to end the lease before the agreed time. Tenants should give the landlord adequate written notice of the date on which they would like to leave. If the landlord agrees to an early termination of the lease, the tenant should get the agreement in writing.

A landlord is entitled to claim from the tenant the real cost of finding a new tenant. This could include advertising, check out costs and any loss of rent. Landlords should provide proof of this expenditure to tenants. Landlords should note that lease clauses that require the tenant to pay a predetermined reletting fee are invalid.

The ACT Consumer Affairs Bureau can give information and advice to private tenants and landlords. The Bureau can also negotiate with the landlords on behalf of tenants.

The Tenants' Advice Service can give advice and assistance on tenancy matters for both private and public tenants.

The Real Estate Institute of the ACT (REI) can give advice to private tenants who have a problem with their agent. When a formal written complaint is received it goes to the REI’s Executive Director and to the real estate agent involved.

The Landlord's Advisory Service provides advice to landlords. Advice is free on the first occasion but landlords will need to join the Landlords Association to receive
further advice.

Should there be a standard agreement?

It has been accepted by all states and territories that there should be a standard agreement to establish certain basic rights and obligations. Some stakeholders oppose a compulsory agreement on the basis that it is inflexible and prevents tenants and lessors from developing an agreement to suit their own requirements.

There is a need for certain rights and obligations to be established by law. However, the law should interfere as little as possible with the ability of' people to choose terms they wish to have in a tenancy agreement. There is generally support for a Standard Agreement provided that people could add terms to suit their own requirements

Therefore the terms of the Standard Agreement should be part of every agreement but not optional. People have needs change over time and so should be able to add their own terms to the Standard Agreement.

DISCUSSION OF THE ACT REQUIREMENTS


The central legislation is the Landlord and Tenant Act 1949 (LTA). With some exceptions it only applies to private residential tenancies and not to licensees, including boarders, lodgers, hostels, caravan park residents and others.

There is no specific ACT legislation which applies to accommodation arrangements of Iicensees.

The LTA does not apply to the ACT Housing Trust or other government provided housing. The Housing Trust tenancy agreements establishes most of the rights and obligations of tenants in public housing. The Recovery of Lands Act 1929 and the Landlord and Tenant Act 1899 provides procedures for the eviction of tenants in cases of a breach of the housing trust tenancy agreement. The Housing Assistance Act 1987 establishes certain administrative procedures and powers of the Trust;
The LTA is not a comprehensive statement of the law as it applies to private residential tenancies. Case law, standard tenancy agreements and other Acts also determine the rights and obligations of lessors and tenants. The Real Property Act 1925, the Forfeiture of Leases Act 1901 (NSW), Landlord and Tenant Act 1899 (NSW) also affect private residential tenancies.

Bonds

For the purposes of depositing bonds with the Office of Rental Bonds the Act applies to residential premises including caravans and other movable dwellings (LTA, s62AA). There is no other reference to caravans or movable dwellings in the Act with the effect that the majority of its provisions do not apply to caravans because residents of a caravan park are likely to be licensees and not tenants.

Accommodation in the ACT

There are a range of accommodation types in the ACT including permanent residence in a flat or a house as well as temporary residence in a caravan or hostel. Accommodation arrangements differ in several ways according to:
  1. the purpose of the accommodation that is, whether for holiday, short stay or permanent residence.
  2. the nature of the arrangements between owner and resident, that is, whether the resident is to be a boarder or lodger, tenant, employee, or member of a club or co­operative;
  3. the nature of the premises themselves, ie. whether the premises are a house, flat unit, hostel, motel, caravan park or other type of accommodation.
  4. whether the provider of accommodation is the Government, community organisation or a private business or individual's.
Private residential tenancy law

Different situations and different types of accommodation have different features and requirements for both owner/manager and resident. Laws and policies need to take account of the distinct requirements of different accommodation types. Close living or communal nature of accommodation in hostels or caravan parks present particular requirements for both management and residents. For example, the establishment of house rules concerning use of amenities and services, security and protection of residents from unacceptable disturbance from irresponsible residents.

Residents of hostels, boarding houses and caravan parks may not wish to enter into an agreement for permanent accommodation but seek temporary arrangements pending changes in job circumstances or other matters

Another aspect is that all people who have the right to occupy premises as their principal place of residence should have appropriate protection of their use of the residence. While the differences between various types of accommodation may be slight, the similarities are sufficient to warrant their coverage by one piece of legislation. The application of legislation should not depend on the type of accommodation involved, because all types of accommodation can involve a principal place of residence.
The development of tenancy legislation in other jurisdictions followed a certain pattern. The pattern involved extensive time in reforming tenancy laws followed by a further even more extensive period of some years before consideration was given to people other than lessors (landlords) and tenants such as boarders and lodgers.

To date only Victoria and NSW has passed legislation on boarders and lodgers in the form of the Rooming Houses Act 1990 (Vic) and the Boarding Houses and Lodging Houses Act 1990 (NSW). Therefore, in the ACT there is no legislative protection for boarders and lodgers.

The need to have and use accommodation without arbitrary interference is common to all residents whether the resident is a tenant in a house or a resident in a caravan park or hostel. In principle all residents should enjoy: Different accommodation types involve particular issues and requirements for both owner/manager and resident. Legislative or other measures must take account of these differences.

The traditional distinction between a tenant and a licensee can be very difficult to apply in certain circumstances with consequent uncertainty and hardship. To reduce this uncertainty the LTA should not turn on complex legal distinctions such as that between a licensee and a tenant. The application of the Act should instead be based on the clear premise that it applies to all forms of residential accommodation which involve a person's principal place of residence.

The Act should then clearly define those premises or types of premises to which it does not apply. This is the approach of legislation in other jurisdictions and the approach recommended in the recent ACT (Private Residential tenancy Law, Report #8, The Community Law Reform Committee of the ACT, 1994 (“the Committee”)) and Queensland reports. However, legislation should not apply to:
  1. crisis accommodation;
  2. holiday accommodation;
  3. accommodation for aged and disadvantaged persons which is regulated by Commonwealth.
The LTA does not apply to accommodation within a family setting where there is no intention to create a legal agreement. This is in keeping with legislation in all other jurisdictions and should only apply to people who intend a legally binding agreement for value. Therefore, the LTA does not apply to accommodation provided in an informal domestic or family situation.

The ACT Housing Trust provides approximately 12 400 separate dwellings for rent under its public rental housing assistance program.

The Housing Trust is the largest lessor in the ACT and provides almost half the total number of rental dwellings. In 1991 the total number of rental dwellings in the ACT was 32 017 (1991 ABS Census). The Trust provides a rental rebate to its tenants with the effect that no tenant of the Trust pays more than 25% of his/her total income towards rent. This means approximately 87% of Housing Trust tenants pay a rebated rent, that is, a rent which is less than the comparable market rent for those premises. In addition to providing dwellings for rent, the Trust also operates several other programs to assist people to find housing.

The Committee formed the view that the ACT Housing Trust should be bound by the proposed Residential Tenancies Act. The problems and needs of tenants are broadly the same whether the lessor is a private individual, a corporation, or the ACT Housing Trust. Public tenants should have the same rights, protection and obligations as private tenants. Administrative policies to protect tenants cannot remove the potential for public tenants to be or to be seen as “second class citizens with second class justice” (Reforming Victoria’s Tenancy laws, 1978, p61).

Boarders and lodgers

Boarders and lodgers are licensees and not tenants. A licensee, unlike a tenant, does not have an interest in land and does not have a right to exclusive possession of the premises. The question of whether an occupier of premises is a tenant or a licensee can involve complex questions of law, fact, and degree. The status of the occupier depends primarily on whether he/she has exclusive possession of the premises which can involve consideration of the following factors: A lodger is a licensee who pays for the right to occupy a room or rooms in a house or hostel which the owner (or agent) continues to occupy and exercise general control over. The owner may provide regular services to the lodger in addition to accommodation but this is not necessary for a lodging agreement. If the owner provides services, such as cleaning etc then this is a strong indication that the person occupies the premises as a licensee and not a tenant.

A boarder is a lodger who receives meals as well as accommodation. The following is a selection of definitions of a lodger.
A lodger is an inmate who pays for accommodation in another's house, a person who occupies part of a house, subordinate to, and in some degree under, the control of a lessor or his or her representative, who either resides in or attains position of or dominion over the house generally. This definition emphasises that the householder must retain control over the house...A boarding house is one in which board is provided and to board is to provide a lodger or guest with stated meals at a flat (inclusive) rate (Australian tenancy practice and precedents, Butterworths 1987, para 380).
...It is submitted that the terms 'Boarder' and 'Lodger” are sufficiently wide to include all categories of occupants of residential premises who are not classed by the common law as tenants (Bradbrook MacCallum Moore Residential tenancy law and practice Victoria and South Australia, TLB, 1983 p695 p88 para 45).
[A lodger is one who] occupies residential premises on a personal licence for an indefinite period on a payment of a fee and to whom services are rendered by the lessor (Residential tenancies law reform in Queensland - boarding houses and caravan parks, 1992, attachment 4).

The LTA refers to boarders, lodgers, caravans, dwelling houses and movable dwellings. The interpretation section of the Act states that the Act applies to prescribed premises including the premises leased as a lodging or boarding house or shared accommodation. However, the main provisions of the Act are expressed as applying to lessors, lessees, leased premises or the letting of premises. The use of these terms restricts the application of the provisions of the Act to tenancies, that is, lessors and tenants.
It has been argued that the LTA should be more inclusive to cover problems concerning arbitrary evictions, invasion of privacy, lack of consultation with residents and inadequate dispute resolution procedures.

The LTA applies to boarding and lodging houses where there is a tenancy involved. For example, the Act applies to a boarding house proprietor who is a tenant of the owner of the boarding house building; that is, the proprietor rents the boarding house from another organisation.

A person who occupies premises as a tenant has clear rights under the Landlord and Tenant Act including protection against arbitrary eviction, frequent rent increases, interference in the quiet enjoyment of the premises, prohibition of charges other than rent or bond. Boarders and lodgers have no such legislative protection currently in the ACT. The rights and obligations of boarders and lodgers are determined primarily by agreement.

Boarders and lodgers who fall outside the scope of tenancy legislation are often people who cannot afford to rent a house and therefore seek accommodation in hostels and rooming houses. Boarders and lodgers have little or no financial resources and are in a poor position to negotiate a fair agreement with the proprietor, or to seek alternative accommodation if current accommodation is no longer available.
The fact that lodgers have so few legal rights is due mainly to a long-standing distinction in the law between a licence and a lease. Tenants (or lessees) have certain basic housing rights, such as the right to exclusive possession and quiet enjoyment, notice of termination and hence some security of tenure, even if they pay rent weekly and have only occupied the premises for a month. Licensees on the other hand (and lodgers are generally regarded as such) have none of these rights even though they may have lived at the same premises for years. There are no half measures.

Medium and long term community housing

Consider the application of legislation to organisations that provide medium and long term accommodation to people in financial or other need. The ACT Housing Trust and various community organisations provide medium and long term accommodation to people in need including people in financial need, people with intellectual disabilities, survivors of domestic violence, homeless youth and people suffering from the effects of drug or alcohol addiction. People may receive both accommodation and services to assist their housing within the community.

A great deal of accommodation is provided in the form of hostel or rooming house accommodation including centres such as Ainslie Village, Lowana Young Women's Shelter, Betharbara, and Jerrabomberah House.

The provision of low cost accommodation by a government or community based charitable organisation with or without support services clearly involves particular administrative and policy considerations. However, the Committee considers that, subject to further consultation, it would be appropriate for the same legislation to protect the rights of residents in hostels and rooming houses whether run on a non profit basis by charitable organisations or as a private business. The Committee considers that in either case the needs of residents of rooming house and hostel accommodation are substantially the same.

Boarders and lodgers in a domestic dwelling other than a boarding house or hostel

One issue for further consultation is whether legislation should apply to boarders and lodgers in private homes as well as in boarding houses and hostels. In many cases a resident owner of a house, whether a single person or a family unit provide accommodation, not on a tenancy basis, but on the more informal basis of an agreement to provide accommodation for a boarder or lodger. The resident owner retains overall control of the house and may provide meals or other services such as washing and cleaning. The boarder or lodger does not have exclusive possession of the house The Queensland Report of the Tenancy Review Committee recommended that proposed boarders and lodgers legislation not apply to these domestic arrangements ( Residential tenancies law reform in Queensland - boarding houses and caravan parks, 1992, p8).

The Committee was uncertain about whether or not the LTA should apply to boarders and lodgers.

Shared accommodation - cotenants

Sharing accommodation with residents other than the owner, that is, assignees, subtenants and cotenants. There is much uncertainty and hardship caused by the complexity and uncertainty of the distinction between tenants who are covered by the LTAt and licensees who are not covered by the Act. This is a particular problem for people who wish to determine entitlement to bond money. The Office of Rental Bonds notes that there is often particular difficulty involving group houses which have a high turnover of residents and where there are often disputes between residents as to entitlement to bond money due to insufficient documentation lack of receipt for bond payments and difficulties in locating former residents.

The Committee has concluded that the purported assignees or sub-tenants should not have protection as a tenant under the proposed Residential Tenancies Act where the arrangements were made without the consent of the lessor. In this situation the law should deem each new resident to be a licensee and not a tenant under the proposed Act. This approach will make clear whether a resident is a tenant or a licensee.

The Committee also recommends that a person who is a licensee because no consent was obtained from the lessor should receive a minimum period of notice from the lessor should the lessor decide to terminate the tenancy due to a purported assignment without his or her consent. The licensee in a shared accommodation setting therefore has fewer rights in relation to the lessor under the proposed Act than a tenant. The Committee considers that there should be further consultation on this issue in the context of legislation to apply to boarders and lodgers.

Cotenants, joint tenants, tenants in common

Two or more people may be tenants of the same premises through the same tenancy agreement (hereafter cotenants). Cotenants may either be joint tenants or tenants in common. The distinction is significant for the following reasons.

If cotenants enter a tenancy agreement as joint tenants and one of the co­tenants dies then the rights of the deceased in the tenancy pass to the surviving cotenant(s). The tenancy continues with the surviving cotenant(s) as the only tenant(s). In contrast, if cotenants enter a tenancy agreement as tenants in common and one of the cotenants dies then the tenancy rights of the deceased pass to the estate of the deceased. The tenancy continues with the estate of the deceased as one of the cotenants.

Joint tenants have a "joint and several" interest in the tenancy. This means that each cotenant has the same interest in and responsibility for the whole of the premises and for the performance of all of the tenants' obligations under the tenancy agreement. For example, each cotenant is equally responsible for payment of all of the rent for the whole premises. The lessor may seek compensation from all of the cotenants for failure of one of the co­tenants to pay rent.

Tenants in common may or may not have such a joint and several interest in the tenancy depending on the nature of the agreement between the cotenants. Tenants in common may have an unequal interest in the tenancy and in some cases may not be liable for the actions of other co­tenants
The type of arrangements that cotenants seek will depend on personal circumstances. A husband and wife may choose to be joint tenants. Cotenants who choose to pay the rent in unequal portions may seek to be tenants in common with unequal interest in and responsibility for the tenancy.

Caravans and relocatable dwellings in caravan parks

The 1991 ABS Census of Population and Housing states that at the time of the census there were 164 039 people living in caravans or other livable dwellings in caravan parks throughout Australia, which population represents 1% of the total population (ABS Census, 1991). The number of caravans or other livable dwellings were 87 527. In the ACT, at the time of the census, there were 395 people living in caravan parks. There are four caravan parks in the ACT which provide accommodation for a significant number of long stay or long term residence. One of these parks, the Long Stay Caravan Park at Narrabundah, is operated by the ACT Housing Trust.

The LTA has a limited application to caravans and movable dwellings (s62AA(2)). The provisions of the LTA concerning rental bonds applies to the leasing of a caravan, caravan site, caravan attached to a caravan site, and movable dwellings. The LTA therefore arguably applies to a resident of a caravan park where that resident has leased a caravan site, a caravan attached to a caravan site, or simply a caravan. It is possible to lease a caravan unattached to a site just as it is possible to lease a television or a car. However, a tenancy can only arise if there is a lease of an area of land or something fixed to an area of land. It is therefore arguable that the LTA would not apply to the leasing of a caravan alone without a designated site. The application of the LTA to all caravans is arguably problematical.

The Committee considered that in principle people who have their permanent place of residence in caravan parks should, like other residents, have protection of basic rights to accommodation through legislation. However, further consultation is necessary to assist the Committee to prepare final recommendations on this and related issues.

Tourist accommodation and holiday premises

The LTA does has no application to tourist or holiday accommodation. Accommodation of this type does not involve issues of access to an individual's home and therefore does not require tenancy legislation to protect such access. Of course, other consumer protection legislation may be applicable.

However, there is a problems of distinction between residential premises and holiday premises. Holiday or tourist accommodation can be provided in several different ways; either through short term renting of a house, a holiday share scheme in a house, hotel, tourist or caravan accommodation. A holiday may last for several days, weeks or months. This variety of holiday alternatives means that it is not practical way for legislation to define in any precise way what is or is not holiday accommodation. The most appropriate test is the purpose of the accommodation arrangements.

If it is intended that the accommodation be used for holiday purposes then it should fall outside the scope of legislation protecting residential accommodation. If the premises are intended for use as a principal place of residence, for whatever period, then appropriate tenancy legislation should apply. Where disputes arise as to the nature and purpose of accommodation arrangements, people should be able to apply to the Tribunal if necessary and it will then determine whether the premises are intended as holiday accommodation or not, according to the circumstances of each case.

Hotels and motels

It is not necessary to establish tenancy legislation to apply to hotels for the following reasons:
  1. legislation already applies to hotels and licensed premises
  2. new legislation could create difficulties for an industry which provides short term accommodation.
  3. patrons of a hotel differ from boarders in that the hotel provides services as well as accommodation.
There has been much debate in NSW as to whether the Boarding Houses and Lodging Houses Act should apply to hotels and motels and if so to what extent the legislation should apply There was also debate on the question of if the legislation were to apply how long should a person reside in a hotel or motel in order to be deemed a boarder or lodger.

The vast majority of people who reside in hotels and motels do so for holiday, business or very short stay purposes only and very few would use hotels or motels as their principal place of residence. However in those cases where a person does use a hotel or motel as his or her principal place of residence, the Committee considers that there are strong reasons for legislation to apply in this situation as well as to other boarding and lodging arrangements. Here again, the test should be whether the parties intend the accommodation to be used for residential, holiday or short term purposes.

If the parties intend to use the accommodation as their principal place of residence then it is reasonable for that person to have the same protection as other residents. The Committee makes no final recommendation in this area and considers that further consultation and research is necessary. The experience in New South Wales indicates that there are difficulties in applying legislation to hotels and motels and that further consultation is necessary.

Student accommodation

Legislation in other jurisdictions, including the Rooming Houses Act (Vic), exclude educational institutions from the application of residential tenancy legislation. The Australian National University has argued that accommodation provided within the institution of the University is of a very different nature to the typical lessor/tenant relationship and also to the commercial operations of hostels and boarding houses. The University noted that as a non-profit organisation it did not simply provide accommodation for rent but also provides academic, social and religious or emotional support for students.

Accommodation and other services are linked to the students' enrolment in the University. The University submitted that these and other matters make it inappropriate for tenancy or related legislation to apply to the University residences The University noted that it provides different types of accommodation including residential accommodation on campus as well as houses for rent outside University grounds provided by the ANU Housing Office.

Historically, houses and flats which the ANU leases to students have complied with the LT A. The University notes that it would support the application of future tenancy legislation to houses and flats which it rents through the ANU Housing Office.

See crisis accommodation
See aged accommodation
See hostel accommodation
See retirement villages
See employment related housing
See cooperative housing
See discrimination


Information that a lessor can ask an applicant for rental accommodation, standard application forms

In general, a lessor can ask questions of a tenancy applicant in order to assess his or her suitability. However, it is unlawful to ask questions about a persons race, sex, marital status, status as a parent or a carer, religion, or other ground listed in the Discrimination Act for the purpose of deciding whether to provide accommodation.

The Crimes Act 7914 (Cth) contains provisions to allow a person to disregard some old convictions after ten years (five years in cases of offences committed as a juvenile) and provides protection against unauthorised disclosure and use of such information. In certain circumstances a person can lawfully answer 'no' in response to a person who asks whether he/she has previous convictions.

The Privacy Act 1988 (Cth) makes it unlawful for people including lessors and agents from obtaining information as to the credit worthiness of a person from a credit reference agency or from another source such as a bank. Illegal disclosure or use of credit information is a criminal offence.

The Privacy Commissioner of the Commonwealth Human Rights and Equal Opportunities Commission suggests that real estate agents should be aware of and should apply the principles established in the Privacy Act 1988 for safeguarding private information. The Privacy Act principles do not apply to private individuals including agents, however, the privacy commissioner considered that agents should apply the same because they receive a great deal of personal information. The Commissioner states that the principles should apply to ensure people know why information is sought, how !t will be used,
continued access to information and to guard against unauthorised disclosure.

The ACTREI has a standard application form for optional use by agents.

Tenancy application forms have a significant bearing on discrimination issues and good business practice. A good application form will help prevent unlawful discrimination and also help the lessor to avoid inadvertently contravening the above laws on use of information. An appropriate application form could also inform the applicant and lessor of the appropriate use of information disclosed during the application process. This information could encourage use of the principles referred to by the Privacy Commissioner.

The standard application form should not be compulsory as the selection process varies from person to person. It is not for the government to impose a particular selection process for use in all circumstances. The preferable approach is for the industry to develop its own model application form which people can use, modify or not use as suits their approach to selection.

Access, Inspections and Quiet Enjoyment

The Standard Agreement form should clearly affirm the right of the tenant to exclusive use and enjoyment of the premises without interference. It should also clearly establish certain rights of access for the lessor including access to make routine inspections and repairs.

Existing Position in the ACT

Under the common law, a tenant has a right to exclusive occupation of the premises and may therefore refuse access for the lessor and others. The lessor may not access the premises except as agreed by the tenant in the tenancy agreement or as agreed on other occasions.

Tenancy agreements in common use in the ACT require the tenant to allow access to the lessor for:


The Real Property Act implies certain rights of access for the lessor unless agreed otherwise (s120, Real Property Act 1925). These include the right to enter the premises:


The Landlord and Tenant Act makes it an offence to interfere with the tenant's ordinary use or enjoyment of the premises (except by consent or if there is sufficiently serious cause to do so). Interference can include:



The right of the tenant to refuse access subject to the tenancy agreement and the right of the tenant to quiet enjoyment of the premises

The Consumer Affairs Bureau and the Welfare Rights and Legal Centre have noted that inspections and visits by the lessor are a frequent subject of complaint. The Welfare Rights and Legal Centre states that they receive complaints concerning lessors entering without permission, entering at unreasonable times and entering on an unreasonable number of occasions.

The Bureau points out that few tenants appear to realise that they have the right to refuse entry of the lessor and others, subject to the terms of the lease.

Legislation or the standard lease should include a provision that clearly states the right of the tenant to refuse entry subject to the terms of the tenancy agreement and the right of the tenant to quiet enjoyment.

The aim is not to create new law but to make the existing law as to access and quiet enjoyment more accessible. All jurisdictions except Tasmania have provisions similar to the ACT for the protection of quiet enjoyment.

Landlord's rights of access to the premises for routine inspections and other purposes

It is essential for the lessor to have access to the premises in order to determine that the property is being used properly and not damaged and if necessary to make repairs. Further, there is a need to achieve a balance between the right of the tenant to use and enjoyment of the premises and the need of a lessor to have access to the premises.

It is essential for lessors to be able to inspect the premises at the end of the tenancy. This is to enable the lessor to determine whether the tenant has breached the tenancy agreement and is liable to lose bond money or pay further Compensation. If the tenant and the lessor agree on the assessment of the premises at the end of the tenancy then the bond money is released from the Office of Rental Bonds, if there is no agreement then certain dispute resolution procedures follow.

The lessor should be able to make an initial inspection of the premises within four weeks of the beginning of the tenancy and a final inspection at the end of the tenancy.

Access to make repairs

The Law Society tenancy agreement requires the tenant to allow reasonable access for repairs (cl 9.2,9.3). It is implicit in the REI ACT lease that the tenant shall allow the lessor access for repairs. All jurisdictions allow reasonable access for repairs.

The lessor must have reasonable access to make repairs in addition to access for other purposes. The lessor should be able to access the premises where necessary to make repairs.

During the tenancy: inspections, right to quiet enjoyment and access

There should be follow up inspections to ensure that the tenant has remedied a breach of the agreement and inspections on suspicion of breach of agreement or abandonment of premises

The REIACT tenancy agreement provides for the lessor to make follow up inspections where a routine inspection reveals that the tenant is in breach of the agreement provided that the number of 're-inspections' does not unreasonably interfere with the tenants right to use and enjoyment of the premises (REI agreement cl27(b)). The standard Law Society agreement requires the tenant to allow additional inspections as a consequence of the tenant breaching the lease (Law Society agreement cl 9.2).

The Real Property Act implies rights to inspect the premises on failure to pay rent or in other circumstances. The laws in most other jurisdictions do not allow the lessor to access the premises on the grounds that the tenant has breached the agreement. NSW allows access where the landlord reasonably believes the tenant has abandoned the premises. (s24 Residential Tenancies Act 1987 (NSW)).

Should the lessor have the right to inspect the premises on one or more of the following grounds?

Argument in favour of additional access on the grounds of a breach or suspicion of breach by the tenant appear to be based on the argument that early or additional access would enable the lessor to act quickly to prevent further losses due to failure of the tenant to remedy the breach or abandonment of premises.

The lessor should have access in order to make repairs to the premises and in cases of urgent repairs this could mean immediate access. The lessor should have clear rights to access the premises if they are abandoned by the tenant.

However, the arguments against follow up inspections or inspections on the grounds of breach is that the lessor has sufficient opportunity to check whether the tenant has remedied a breach during the routine inspection subsequent or the routine inspection which revealed the breach. In cases of continuing breach, the lessor has the opportunity to seek compensation or other redress before the tribunal.

Inspections required by Government regulation

Both the ACTREI and Law Society tenancy agreements require the tenant to allow access for the lessor or Government authorities in order for the lessor and/or the tenant to comply with Government regulations (cl 9.5 Law Society agreement, cl 28 REI lease). This could require, for example, the tenant to provide access for a Government health inspector to examine the premises or for ACTEW employees to inspect the meter. The relevant Government legislation would itself require the tenant to allow access to Government authorities. However, in other jurisdictions the obligation to allow access as required by Government regulation is made clear in the agreement or the act.

Access to show premises to prospective tenants, purchasers and mortgagees

Both the ACTREI and Law Society tenancy agreements require the tenant to allow access for inspections by prospective tenants (cl 9.5,9.6,9.7 Law Society agreement, cl 25 REI agreement).

The ACTREI agreement requires the tenant to allow access:

during the last month of the tenancy, at all reasonable times allow the lessor together with any prospective tenant full and free right to enter, inspect and examine the premises provided that the tenants occupation is not unreasonably disturbed.

The Law Society agreement requires the tenant to allow the lessor access:

to put up "to let" signs and to show the premises to prospective tenants if the tenancy is about to end or if the lessor in good faith has given notice to the tenant terminating the tenancy.

Most jurisdictions provide for access to premises to show new tenants or purchasers but on a restricted basis. In NSW (s24(1)(e) Residential Tenancies Act 1987), South Australia, ( s49(1)(e) (Residential Tenancies Act1978) and Western Australia (s46 (1)(f)(g)Residential Tenancies Act 1987) inspections to show the premises to prospective new tenants can only take place in the last few days of the tenancy (the last 14 days in NSW, 28 days in SA and 21 days in WA). In addition such inspections must take place at reasonable hours, with reasonable notice and only on a reasonable number of occasions. Inspections for purchasers or mortgagees of the premises may take place at any stage of the tenancy, but only on a reasonable number of occasions and with reasonable notice.

In Victoria inspections for prospective new tenants may take place only after notice of termination has been given and 24 hours notice of the inspection has been provided. Inspections for purchasers or mortgagees may take place at any stage.6f the tenancy provided 24 hours notice of the inspection is given.

Inspections for new tenants or purchasers/mortgagees must take place between 8.00 am and 6.00 pm.

The lessor requires reasonable access to show the premises to prospective tenants, purchasers or mortgagees.

A recent Western Australian report on tenancy law (Ministry of Consumer Affairs (WA) Report to the Minister on the operations of the Residential Tenancies Act 1987, 1992 p65) considered submissions from tenants and lessors which were critical of requirements that inspections take place only on a “reasonable number of occasions” and with “reasonable notice” because such requirements are open to different interpretation and cause uncertainty. The report decided against making the limits more specific on the grounds that to do so could disadvantage the owner in seeking a new tenant or purchaser.

The Consumer Affairs Bureau has expressed concern with tenancy agreements that allow any number of inspections. for prospective purchasers or tenants. The Bureau stated that such open ended rights of access create uncertainty and can be used to allow inspections on an unacceptably frequent basis.

A member of the Victorian Tenancy Tribunal argues that the law in Victoria has led to uncertainty as to what is a reasonable level of access for this purpose Three submissions support the approach of New South Wales generally including provisions with respect to access for new tenants or purchasers.48

Inspections to collect rent

It is convenient for some lessors and tenants to have the rent collected personally by the lessor at the premises. The law in South Australia (s49) and Western Australia(s46) gives the lessor the right to access the premises to collect rent.

However, while the collection of rent at the premises may suit some people it would also represent an unacceptable intrusion for many.

The law should not give the lessor the right to access the. premises in order to collect the rent. However, the tenant should be able to consent to the collection of rent at the premises if he or she wishes.

There are many and varied arrangements for the making of inspections according to the different needs and circumstances of individuals. The lessor and tenant should be able to make their own arrangements as to matters with respect to notice
and the carrying out of inspections wherever possible. The law should also establish certain minimum standards which will apply unless. the parties agree otherwise.

The standard agreement requires the lessor to give the tenant 5 days notice of a routine inspection (cl 27(a) REI standard tenancy agreement). The Law Society tenancy agreement contains no requirement as to notice (cl 9.1). Most jurisdictions require the lessor to give at least 7 days notice of a routine inspection (s24 NSW). The Residential Tenancies Act 1980 (Vic) requires only 24 hours notice (s95).

Adequate notice is essential to the privacy of the tenant. However, what is adequate notice is more difficult.

There should be substantial notice of routine inspections to allow the tenant to make necessary arrangements for the inspection if he or she wishes to be present, time to negotiate a more suitable alternative inspection time if required and some risk that the tenant will be away at the time the notice is delivered and will therefore receive little, or no, notice at all.

Notice periods for repairs

The tenant should receive notice in writing of access by the lessor, agent and/or trades person in order to make ordinary repairs.

The occasion for making repairs arises in the normal course when the tenant notifies the lessor of the need to make repairs or the need for repairs is discovered during a routine inspection.


BASIC CONCEPTS OF PROPERTY MANAGEMENT
Rent roll
The rent roll is the list of clients (tenant and landlords) that the property manager manages. The benefits of property management from the agent’s point of view is that the rent roll is the agent’s “bread and butter”. The income from the rent roll is comparatively steady and safe. Income from the property management department is regular, quick (each month), reliable and therefore can be budgeted quite accurately.

Asset value

The rent roll has value as an asset as it is often borrowed against. When an agency is sold the rent roll is the major single item of value and has goodwill value. Smaller agents view their rent roll as their superannuation.

Connection with the sales department

An alert property manager can see many sales opportunities from the management of a number of rental properties. Aspect is most important during times of sluggish growth and a dearth of listings. The property management staff in their daily duties come across potential sales listings. One agent who has kept accurate figures over a number if years claims that 20% of his sales come from rental accommodation.

Sales only come about when the owner believes that the property manager has “done a good job”. Poorly managed property will not be sold through that agency.

Public relations

The agency with a property management department enjoys the value and goodwill of offering and promoting a complete professional service. This aspect may be difficult to value but should not be underestimated.


Skills and duties

There are 3 property management streams:

In this article we are only concerned with residential. Residential property management includes strata or unit title management. Some property management departments operate with fully multi-skilled personnel who complete most or all requirements relating to a property. Others work on functional lines with a number of people dealing with different aspects of property management.
Skills and duties of a residential property manager Unit title or strata management The property manager should aim to:

Property Management is a varied and challenging occupation. the dedicated professional property manager must be aware of: The “ideal” property manager should have the following attributes:

Body corporate/unit management
The curriculum research for this course also analysed the duties and responsibilities of the body corporate property manager:
Property management is a responsible profession. He/she has the daunting responsibility for sometimes millions of dollars worth of property and the sometimes doubtful privilege of dealing with people. Relationships with clients and tenants can last for years and varies between exhilaration and frustration beyond belief. There can be an enormous sense of achievement when all goes well with all parties resulting in a “win win” situation.

The skill of the property manager is in successfully balancing the demands of the two groups and aiming for “win win” situations.

The need for a good database

Special problems in Property Management are the recovery of possession rent/debt collection and consumer claims. All these problems will require the property manager to source information from various areas to allow him/her to handle the specific problem.

The following areas will the property manager to source the information required for specific problems:


The landlord’s perspective

The landlord looks for professionalism in the managing agent. He/she expects a personal service even though the rent roll may be quite large. He/she expects easy to read but thorough statements once a month. The number of agents who have lost valuable rent roll properties due to the owners difficulty in understanding the statement bears testimony to the need to make the statements readable.

STATEMENTS

An obligation under the Agents Act is to account to the Principal on a regular basis.

In NSW Reg 715 (F) states that the property manager must nominate on the Management Agency agreement, the manner and frequency at which he/she is required to account to his/her principal in relation to money received on behalf of the principal.

The landlord is delegating responsibility to the managing agent so as to relieve him/herself of onerous duties and responsibilities. For example, tenant bonds, collection of rent, inspections etc. ASING THE RENT ROLL
Natural growth

Natural growth arises from referrals (goodwill) and the Sales Department.

Advertising

Advertising or promotion is usually by way of a block advertisement in the classified section and real estate section of the regional newspaper.

Also by the use of Wanted ads in the local newspaper.

PROMOTION AND ADVERTISING

Be careful if you are trying to “poach” clients of a competing agency. Do not forget that they can do to you what you are trying to do to them. Try to offer something unique, something the rival agency is not offering. The medium is usually letters, cards, Christmas cards, newsletters. Respond to other advertisements in the local and regional newspaper.

Use a database of investment property owners. This can be built up over time through inquiries and personal contacts.

Signs are useful. Erect signs on buildings already managed. To Let signs in a window of the premises to let or outside the property. However, be aware of the local authority’s requirements as to signs. Office window signs.

TRADE NEWSPAPERS AND JOURNALS

Watch out for new residential constructions. Develop a reliable and accurate database of the landlords who are building new residential properties for rental.

UPGRADING EXISTING MANAGEMENTS

Upgrading to a higher and safer income level can be achieved by advising your clients to refurbish, upgrade or strata title their premises. However, this should not be done without a proper feasibility study.

PROMOTING INVESTMENT PROPERTIES

The property manager should be able to write accurate investment reports. These should be written without hyperbole or puffing. Save these for the To Let advertisements.

WALK INS

This applies to institutions and departments with a high turnover of staff that require accommodation. For example, the Defence and Education Departments.

LISTING A RENTAL PROPERTY

Most of the factors that apply to the successful listing of sale properties also apply to the successful listing of rental properties.

THE LISTING SHOULD CONTAIN:

An extensive property list means that any staff member can give the correct information to prospective tenants. If a person cannot get the information they require they will go elsewhere.

A large map in the foyer of the agency with coloured pins showing location makes it much easier to show prospective tenants the available properties. Saves time!

TELEPHONE INQUIRIES

TELEPHONE BASICS

It is better not to give the address of a property over the telephone.

QUALIFYING CALLERS AS TO NEEDS


APPRAISAL OF RENTAL PROPERTIES

When the property manager appraises rental properties it is generally for internal use only. The factors taken into account for the valuation (appraisal) of properties for sale also apply to rental properties. The difference is that the rental value is more dependent on some of the factors than others. For example, proximity to public transport and work is generally more important for tenant than a home owner.

PROPERTY CHARACTERISTICS

In the property manager’s database the following factors and attributes should be noted:

COMPARABLE RENTAL PROPERTIES

The best way to determine the market rent of the subject property is to compare it comparable rental properties. Rent is a direct function of supply and demand. Sometimes the supply of properties is reduced through the natural conversion of rental properties to owner occupied properties. For example, the “gentrification” of the inner suburbs of Sydney. This will of course force a rise in rents.

Other factors that may affect comparability are social desirability (image) and the state and type of adjoining premises. Rental values may be affected by close proximity to a public housing development.

Monitor advertisement for rental accommodation in the same locality and similar premises to glean the latest asking rents. This is also a good opportunity to monitor the competition.

Another measure of rental activity are the vacancy rates in the subject locality. Obviously these are a measure of supply and demand. Keep a record of how it takes you to rent a property. Is there an increasing or decreasing trend?

Use secondary data sources such as REI Market Facts.

Rent setting by the property manager is important. For example, in a block of new units you may be able to lease one or two at a high rent but not the rest. When you lease the others at allow rent it creates dissatisfaction with the tenants paying a higher rent.

LANDLORD’S EXPECTATIONS

What does the landlord expect of the property manager?



RENTAL PROPETIES AS AN INVESTMENT

CASH FLOW

The property manager may be asked to manage a property for an owner who will entrust not only the collection of the rental but also ask him/her to manage the landlord's expenses.

For a cottage the typical expenses are:
If major repairs are necessary, then before placing the order for work. Check if there are sufficient funds to cover the work or have the account paid by the owner.

The property manager should also take into account the following factors:
The type of property has a great effect on the cash flow as different properties have different forms of income as well as the "high's and low's" of seasonal properties. For example, holiday lettings. This also applies to the recovery of contributions from tenants for certain outgoings.

The size of the property will dictate the degree of detail
necessary in the cash flow plan.
This is a most important factor as the condition of the property will determine the provisions for maintenance, repairs and capital works. For example if the
subject property has just been completed your provision for maintenance, repairs and capital works in the first year should be nil.

The Property Manager should be careful not to fall into the trap of ordering work on behalf of landlords, yet not having the money in the account to pay for that work. He/she must not under any circumstances pay for a repair, or pay an owner's rate notice unless there is sufficient funds to cover the amount at the time that the bill is paid.

It there are excessive repairs at a difficult time such as when the property falls vacant the PM must seek funds from the landlord or request that rent paid by the previous tenant be held over to pay expenses. DO NOT rely on reletting the property to pay the expenses.

INVESTMENT ANALYSIS

An investment analysis may be required on behalf of a client, whether an existing owner, an interested purchaser or the landlord’s bank. This analysis should include the content of any report to the owner together with the source of the information and the method of calculating the returns on the property.

The property manager should then prepare a cash flow plan of the property that provides the owner with a steady expected income less headache in the management of the property.

REAL ESTATE AS AN INVESTMENT

People invest in real estate for the following reasons (rightly or wrongly):

Having reached a decision, the investor must then decide from the following the type of property in which to invest:

In order to the investment report an analysis is made of income and outgoings. The components are:

1. Gross Income

The first step in any investment analysis is to calculate the anticipated future income. This income depends directly upon the rents which can be charged. The total potential rents for a fully occupied building is the gross rent, or gross
income, estimate.

The gross income less an allowance for vacancies and uncollected items gives the effective gross income. Gross rent is the largest and most important estimate in the entire analytic process. Small errors in the gross figures have a major effect on the investment analysis.

Estimates of future income for both existing and proposed buildings call for an exercise in imagination and creativity.

Income results from meeting an unfulfilled demand in the market. The largest increases in value arises from seeing new potentials and creating the property to meet then. Many of the
large profits in income properties result from such actions.

The promoter builds a new type of building or one in a new location. He/she sees the need for a shopping centre or office building where none existed before.

For existing buildings, the present rent roll is one, but only one, of the factors serving as a basis of the future rent estimate. Current leases may have been written under entirely different demand conditions. They may be far above or below the current market rents.

The dates of renewal may be the key in enjoying future success. The new owner may recognise demands for use that ad been previously unexplored. Productive use of wasted space may sharply raise the gross income.

The estimating problem differs considerably for each type of property. For a single tenant building, the present lease and prospects of renewal may be critical. For a commercial property, the amount of business which can be expected under given percentage leases will be most significant. For flats and office buildings, an analysis of future competition is required. In each case, it is necessary to recognise that estimates are only that. They have a probability of coming true, but may diverge considerably from what actually happens.

2. Operating Expenses and Net Income

The second step in the investment analysis is to project operating expenses and to subtract them from the estimated effective gross income in order to determine net income.

The kind and amount of operating expenses vary tremendously with the type of property and kind of lease. Some single tenant leases are on a so-called "net-net" basis. They require the tenant to pay all operating expenses including taxes. In other cases, the tenant may agree to pay all expenses except for capital costs, such as a new roof.

In contrast to net leases, owner-operated properties frequently have heavy operating expenses. The level and quality of the services rendered and the type and age of the property influence the costs of operation.

The three basic kinds of operating expenses are general costs, replacement costs of reserves, and taxes and insurance. General costs are those expended in each period. They include items such as wages and salaries leasing costs, utility services, repairs and maintenance, and miscellaneous.

Replacements of items such as stoves, elevators, roofs, and furnaces occur only at longer intervals.

Proper procedures establish an annual expense charge credited to a reserve so that expenses are spread evenly rather than concentrated in the year replacement actually occurs. Taxes and insurance are normally calculated on an annual basis.

Estimates of expenses require a calculation of their probable frequency, and this in turn depends on the quality of service. Painting may be necessary anywhere from one a year to once every five years or more. The number of employees will vary with the level of maintenance, requirements for security,
operators, etc. Replacements may be anticipated from general experience.

The amount of utilities depends on how they are metered and previous experience.

It is not enough to estimate the potential requirements for each item. They must be put in cost terms by calculating probable movements in wage rates and prices. The trend for these items has been upward. A decision must be made as to whether or not to extend this trend for the future period.

The inclusion of some type of adjustment should give better estimates than the simple assumption that the status quo for wages and prices will continue.

All these calculations add up to the total estimated operating expenses. They are subtracted from the gross income to give the estimated net income. The final net projection results from two separate judgements, of gross income and expenses. Any errors on either side will carry through and may cause major difficulties with the final anticipated net income.

Assume that you have been asked to prepare an investment for the marketing of a block of flats. Typical headings and calculations are as follows:
Improvements:

A modern brick building of three (3) storeys, twelve spacious two bedroom flats and 12 lockup garages on the ground floor.

Accommodation:

Two bedrooms, lounge-dining room, kitchen, bathroom, laundry, balcony. Each flat has one lockup garage, the rental for which is included in the overall flat rental.

Services:

All flats are serviced by electric stoves and individual hot
water systems. Each flat has its own internal laundry.

Repair:

All flats are in a good state of repair.
Unimproved value for property tax purposes: $ 250 000

Gross Annual Income: 12 flats leased @ $ 175/week @ 50 weeks (after vacancies) =  105 000
Outgoings and Expenditure:
Property taxes including land tax (4 703)
Water & Sewerage
(5,370)
Insurance, Fire, Public Risk, loss of Profits:
(1,650)
House Lights  (225)
Repairs and Maintenance say:
 (2,000)
Cleaning and Gardening
(2,248)
Postage and Stationary
(145)
Management Fees at 5% @ 105 000
(5,250)
Total outgoings: (21 591)  Per flat: (1 799) ----------
Net Annual Return per flat: 6 951 83 409


To complete the analysis the percentage return on market value is calculated. If the market value of the property (determined from comparable sales) is 1 000 000, return on investment is:

83 409/1 000 000 * 100 = 8.34% per annum

It may be the situation that your client requests you to advise him what he should pay for the property given that he requires a net return of 9.5%. This is the capitalization method of valuation and uses the following formula:

MV = NAI * 100/NR

Where:

MV = market value
NAI = net annual income
NR = net annual return as a %

Using the example above he/she should offer:


MV = 83 049 * 100/9.5  = 877 990

WARNING

The above analysis uses the assessment of market value. However, the property manager is not a valuer and therefore should be cautious about the use of such data otherwise he/she may find themselves open to a claim for damages suffered from wrong or negligent advice given to the client.

PROPERTY MANAGEMENT OF UNIT/STRATA TITLES

As well as the skills and attributes required for residential property management the unit title manager needs:
Note: A section 39 (2) Certificate is a Certificate required under the Unit Titles Act for settlement of a unit sale. This Certificate denotes the amount of the unit levy; the date to which the levies have been paid or the amount of levies outstanding; the insurances held by the body corporate and the location of the books of the body corporate.

Section 39(2) states:

(2) A person to whom this section applies may request the relevant
corporation -
(a) to issue to him, within fourteen days after the request is received by the corporation, a certificate under the seal of the corporation certifying whether or not any amount that is payable under the last preceding section by way of contribution in respect of that unit is unpaid on the date of the certificate and, if so, the amount unpaid and the date on or before which the amount is, or will become, due; or
(b) to make, as soon as is reasonably practicable after the request is received by the corporation, the books and records of the corporation available for his inspection and to give him reasonable opportunity to inspect those books and records.
THINGS TO DO

Discuss the required skills, attributes and knowledge for property management with your nearest friendly property manager. Does he/she agree with the list? Are there other necessary attributes that are required and not covered in the list?
Word length: 500 words



COMPLETION OF THE APPROPRIATE DOCUMENTATION REQUIRED WHEN AN ESTATE AGENT IS LETTING AND/OR MANAGING A PROPERTY


Managing agent instructions

Managing agent instructions are in two forms: This is the agency agreement, the form that denotes the terms and conditions of the contractual agreement between landlord and agent. This form contains the information required for the property manager to be able to carry out the management of the property effectively and efficiently.

Both forms must be completed in full, there should not be any blanks.
Samples of the two forms are in appendices A and B respectively. These two forms are fundamental to the day to day property management of residential property.

Managing agent’s instructions

A comprehensive set of Managing Agents Instructions, providing clear information, is the first step towards establishing the contractual relationship between agent and landlord. Prima facie the instructions are the contractual obligation of the property manager to the landlord.

The instructions provide the property manager with all aspects of managing The property, from selecting the tenants, signing the Tenancy Agreement, collecting and disbursing rental funds, arrangement of maintenance, payment of accounts. It also provides important information on insurance, person to contact an emergency, preferred tradespeople, location of water meter. security installations and any other special features. Further, it specifies the landlords policy on pets, garden, or special instructions.
The Instructions are the managing agent’s contract to Act as Managing Agent and needs to meet the rules of contract to be a valid. For example, if the property is jointly owned it should be signed buy both parties. The landlord is bound by any decision made by the managing agent provided it is allowed for in the instructions.

The following are the directions provided on the ACTREI Form relevant to filling in the form.

REIACT instructions to act as managing agent
OWNER (Principal) Address
Obtain FULL names of ALL parties that is, couple, joint investors etc. Request that a forwarding address be made available, including telephone numbers, at the first opportunity. Failure to do so may cause delays in receiving their statements and/or cheques or other relevant information relating to the property.
Owners should arrange for a redirect of their mail. Failure to do so may result in personal and business mail going astray. Receiving the previous occupants’ mail is a nuisance to the tenant.
ADDRESS
Property address, block and section numbers (legal description). If applicable; unit plan number, registered unit number and the body corporate secretary’s name and address.
STATEMENT
State the frequency of statement. It is usually monthly but may be rendered less frequently in certain cases for example, where landlord is traveling.

RENT

The banking details are most important. They must be provided and correctly recorded on the computer. It should include account name and full account number including BSB (branch number), branch name and branch address. This is necessary particularly if the banks is in a large city as there are a number of branches.

Ask for owner to supply an encoded deposit book for your exclusive use. This can avoid delays in the rental proceeds reaching your clients account and hen problem calls to you. It is also a good record of deposit made.

RELETTING

Reletting should be allowed at either the end of each lease or in the event of a vacancy.
Relet at market rental for an agreed term. The term may be any length but is usually one, 2 or 3 years. A 3 year lease should be registered on the Certificate of Title.
Refer to owner for instructions. Unless there is a sudden vacancy, the owner is notified immediately of an impending vacancy. Until you receive advice that it is permissible to relet the property, the property manager is not in a position to commence looking for a new tenant.

BONDS

A maximum of the equivalent of 4 weeks rent can be charged. The bond must be lodged with the Office of Rental Bonds (ORB) within 30 days in the case of an Agent or 10 days for a private landlord.
Once the tenant has vacated and the property thoroughly inspected the agent may authorise the refund of the bond or balance of bond once all the obligations of the tenant have been met.

ADVERTISING

Display “To Let” signs and advertise the property for rent. The cost should be closely monitored and not exceed an agreed amount.

REPAIRS

Authority should be obtained to attend to necessary maintenance/repairs subject to a fixed limit. All relevant paper work, quotes, invoices, receipts should be retained and on file for future reference.

EMERGENCY REPAIRS are not subject to the fixed amount above. For example, an emergency repair of burst water pipes, a section of roof dislodged during a storm etc. This exception applies particularly if the damage will affect other residents or is life threatening.

INDEMNITY

The owner agrees to indemnify the agent against legal action and demands, costs and expenses that may be taken or made against the agent in the course or arising out of the proper performance or exercise of his/her powers, duties or authorities.

DISBURSEMENTS

RATES
Specify type of rate. General, Water, etc. Include account numbers. How frequently should rates be paid?

UNIT LEVIES
The property manager should refer to the Unit Plan number,. Registered Unit number, Body Corporate address and the name of the Secretary of the Body Corporate.

GAS/OIL
Pay the final accounts. Determine from the owner whether or not to cancel these services and to have his/her security bond refunded. Tenants can start their own accounts without risk to the owner.
Encourage owners to leave oil tanks almost empty and vacating tenants can do the same.

ELECTRICITY
OWNERS FINAL ACCOUNT
Owner can arrange to have the final electricity account forwarded to your office for payment from rental funds on the property.

TELEPHONE
FINAL ACCOUNT
As above. Always ask owners to arrange for the disconnection of telephone service early as failure on the part of the telephone company to comply with a disconnection request, can result in high costs for the landlord.

OTHER PAYMENTS
This heading covers repairs arranged by owner prior to vacating. Ensure that you have specific instructions on what was expected of the trades people by the owner, and at what cost. Check that the work has been satisfactorily completed prior to payment.

CLEANER/GARDENER
Cleaner will probably be the final account from owner. Gardener may be final account or may be a particular service the landlord wishes to continue for example, the annual pruning of fruit trees or roses.

INSURANCE
Most important. If the information supplied is not adequate and accurate, it can cause great inconvenience at least, and serious consequences at worst (to the owner, tenant and property manager).
Ensure all sections are completed and clearly noted whether or not the property manager or the landlord is to pay the premiums. Make sure a change of address has been notified to the insurance company if the property manager is responsible for the account. In the event that the owner is to pay the account, the property manager should insist on receiving a copy of the policy in case you need to make a claim. If you do not have this information you are unable to proceed with a claim if you cannot contact owner,

MORTGAGES
Due dates and to whom the payments are to be paid. Make sure it is clear whether or not the property manager or the owner is paying the mortgages.

INSTRUCTIONS

These may be many and varied. They can include no pets or a preference for non smokers. It could refer to items that the owner wants particular attention paid to on inspections. The property manager should advise the owner that he/she cannot specify “no children” as this is illegal under discrimination legislation.

PETS
The owner may require an emphatic no to all pets. Or it may be no to one type of pet only. This condition is often left to the discretion of the agent who should if in doubt always refer back to owner for instructions. A common clause when a tenant is allowed to keep a cat is that the carpets are professionally cleaned on a regular basis.

GARDEN
The general rule is that reasonable maintenance of the garden is a tenant responsibility. However, depending on the type and standard of the garden, it is sometimes more prudent to encourage the owner to assist with some maintenance of the garden. This may require the owner to meet some of the costs of water consumption.

MISCELLANEOUS INFORMATION

PREVIOUS OWNER OR TENANT
This information is helpful for forwarding mail, or inquiring regarding previous maintenance history of the property.

OWNERS SOLICITOR
The property manager may need to know the owner’s solicitor in emergency or difficult situations when the owner is no available.

FRIEND OR POWER OF ATTORNEY
Again this is important information in case of an emergency. It is more important where the owner is out of the country. If possible the property manager should also know where the owner can be contacted if they are out of town or overseas. The nominated person can advise what action the property manager should take in emergency or difficult circumstances.

TRADES PERSONS
The owner can supply the name and contact number for any preferred builder, handyman, plumber or electrician. However, the owner should realise that while every endeavour will be made to use the nominated person an alternative will be used if that person is unavailable,

SECURITY DEVICES
Security devices include burglar alarms, deadlocks and detectors. It is necessary to have the directions for use and the company contact in case of an emergency.

MAINTENANCE GUARANTEES
Are there any guarantees on the buildings or contents? If so, then property manger should have full details and documentation.

LOCATION OF:
INSTRUCTION BOOKS
This is most important, It is extremely useful to copies of the instruction books so as to avoid costly and necessary service calls on appliances. Originals should be kept on file and copies left on the premises in one of the kitchen drawers.

It is a good idea to have the owners compile a House Book. This can include appliance manuals, information on locks and alarms, chimney sweeps. pest control, garbage night, neighbourhood watch, gardening tips, swimming pool maintenance. Anything that helps the tenant to look after the property and reduce the number of call outs on minor matters. It is useful to have a list of appliance showing the model, serial and type number, when last serviced and by whom.

HOT WATER SYSTEM
The property manager should firstly ascertain where it is. It can be outside, in the laundry, cupboard, in the roof or under the house.

METER BOX
The property manager should ascertain where this is. It may be on the side, left or right, rear of the premises. Does the granny flat have a separate meter?

WATER METER
STOP COCK
The property manager should ascertain where this is. This knowledge is essential in an emergency. It can be in the front lawn, driveway or buried. In Canberra it is common to require a special tool to turn the water off in an emergency?

SIGNED BY
Signatures of owners, witnessed. If joint owners, both parties must sign. The signature should be executed under seal in the case of registered Company with the ACN,

ADDITIONAL INFORMATION
Additional information can be attached to the basic document. The additional sheets should be signed, dated and witnessed by both parties.

SERVICE REQUIREMENTS
Service requirements may be already covered in the tenant’s information handbook. However, information should also be available on:

PEST CONTROL: When and how often it is to be done and by whom.

SWIMMING POOLS AND SPAS: It is invaluable to have the name of original supplier in case of warranty service or claims. The name of a preferred pool/spa maintenance firm in se of maintenance. The property manager should recommend owner pay for initial pool instruction to tenants.

lNGROUND SPRINKLER SYSTEMS: As above.


MANAGEMENT OF PREMISES

FEES
These are the fees to the property manager payable by landlord. It should include current charges including percentages charged on gross rent collected and maintenance arranged (if applicable). It should also include inventory, check in and out fees.

The property manager clearly and fully state fees and charges. If they are not listed there is no legal requirement for the landlord to pay them.

AGENTS AUTHORITY


THINGS TO DO

Ask your friendly property manager for three instruction to act as property manager and agency agreements. The names of the parties can be blocked out for anonymity. Analyse the agreements and answer the following questions:


1 Are there any unusual aspects about the agreements?
2 In an emergency such as a hot water system in the roof overflowing, how should the property manager act? Are the emergency instruction sufficient to meet the needs of such an emergency?
3 Following from 2 the property manager wishes to claim damages on the insurance contract. Is there sufficient information to do this? Does the insurance contract cover such a situation?
4 Is there another person with authority that can be contacted if the owner cannot be contacted during this emergency?
5 The tenant claims that the carpets are now foul smelling because of the water overflow. How would you handle this problem based on your instructions?
6 Can the agreements be improved in any way?


THE TENANCY AGREEMENT
The following is an explanation of the various clauses contained in the standard RElACT Tenancy Agreement. A copy is in Appendix B.
ITEM I: Date the agreement is actually signed by all parties
ITEM 2: Landlord. Requires the full names of each owner, Owners are the registered proprietors of the property, the “Lessor”.
ITEM 3: The name of the real estate agency in full
ITEM 4: The full names of all tenants, the “Lessee”.
ITEM 5: The Premises. Ensure block and section details and property address are correct. Registered unit number and Units Plan number and the Secretary of the Body Corporate and his/her address if unit title.
ITEM 6: Maximum number of persons permitted. If the tenants are a family insert “one family”. In case of a couple or a group specify the maximum number of persons allowed.
ITEM 7: Term. Enter the commencement and ending dates.
ITEM 8: Periodic Tenancy. This is usually month to month, but may be any period agreed upon,
2Gb The Landlord/Agent has right to reinspect the property if the initial inspection was not satisfactory. This right continues until the tenant has rectified all faults. However, the Landlord/Agent not to interfere unreasonably or unnecessarily with the tenants right to quiet enjoyment.


Damage to Tenants Property
27 The Landlord is not liable for damage caused to tenants property. For example, burst water pipe causing water to damage tenants furnishings
27a The Tenant is responsible for claims resulting from his/her neglect. For example, if the Tenant leaves windows open and curtains are damaged by rain.
27b Covers damage resulting from neglect or misuse by persons invited onto properly by the tenant, For example, a tenant’s guest or trades person engaged by the tenant.
27c Covers the breach of terms or conditions of the Tenancy Agreement. For example, damage to furniture in case of furnished property.


Compliance with Notice
28a The Tenant is to comply with Landlord/Agent`s written notice to repair, clean or disinfect premises in accordance with their obligations under the Tenancy Agreement.
28b Covers the failure by tenant to start rectifying the landlord’s concerns within 14 days and complete tasks within a reasonable time. It allows the landlord the right to have such matters attended by the landlord but at the tenants expense.


Premises required by Landlord
29a In this case one month’s notice may be given to the tenant if the property is required for use by the landlord or his/her dependents.
(See s3(4)(9) Landlord & Tenants Act and s78 (Premises not to be sold or Ieased under certain circumstances),
29b On expiration of Notice in Clause 30 the rights, liabilities and obligations of both parties to the Tenancy Agreement, cease without prejudice.
29c The rent is to be paid until day of termination.


Rent Increases
30a Rent may only be increased after the 12 months and thereafter not more than every 12 months for the same tenant.
30b Intention of rent increase to be in writing. Then property manager should state the amount of increase and specify the date of increase (a minimum 50 days notice is required).


30c The Tenant has right to terminate tenancy by giving a minimum of 14 days notice prior to specified the date (the day the rent increase is due to commence). The Tenancy will end on rent increase date.
30d Landlord or tenant may give written notice to the other party to withdraw any notices served under clause 31 prior to the specified date.
30e Applies if notices are not withdrawn. New rent to commence on the specified date.
(See s62A(1)-(10) Landlord & Tenant’s Act).

Holding Over
31 Written notice required by either party (30) days prior to end of tenancy. If not given, the lease continues as a periodic tenancy for example, month to month.
The same rights and responsibilities apply to both parties.

Notice
32 Any written notice required by Tenancy Agreement shall be served (a) & (b) Personally, or by prepaid post or by being left in the mail box at the premises of the Agency as applicable.
32c Prepaid post is deemed served on the second working day after posting
32d Notice may take effect on any working day of the month if it relates to ending a periodic tenancy ( after required length of notice).

Disputes
33 Parties to promptly supply relevant information and to act reasonably to settle disputes without delay.-

Stamp Duty
34 The Tenant will any Stamp Duty applicable. This is not currently required on residential eases in the ACT..

Statutes
35 All parties to observe relevant laws pertaining to premises. This clause is particularly important for strata/unit titles.


THINGS TO DO

Using a copy of the tenancy agreement  fill it out using the following information:
Today’s date: 13 March 2008.
You have now found a husband and wife as tenants for Mr Brown’s property at:
12 Smith St, Weetangera 2614

The tenants are: John and Joan White
Rent is: $200 per week payable fortnightly

They will be moving in on the 15 February 1998 for a period of 12 months They are signing the tenancy agreement today.

Should they sign as joint tenants or tenants in common?

ASSUME ANY ADDITIONAL INFORMATION YOU REQUIRE
or
Ask your friendly property manager for three files at random or if you a property manager, choose three files at random. After perusing these files answer the following questions:
I Is the agreement completed correctly?
2 If not how could the missing information pose problems for the property manager?
3 If the agreement is completed correctly what problems could you foresee from an incorrectly completed agreement?


APPENDIX

S8
"prescribed premises" means any premises, other than-
(a) premises which are for the time being used as a grazing area, farm,
orchard, market garden, dairy farm, poultry farm, pig farm or bee farm or
which have been leased, either expressly or impliedly, as a grazing area,
farm, orchard, market garden, dairy farm, poultry farm, pig farm or bee farm
or for the purpose of being used as such;
(b) business premises; and
(c) premises licensed for the sale of spirituous or fermented liquors,
and includes any part of any premises and any land or appurtenances leased
with any premises;

RENT INCREASES

LANDLORD AND TENANT ACT 1949 - SECT 62A Rent increases in relation to prescribed premises

62A. (1) Where the lessor of prescribed premises desires to charge in
respect of those premises a rent higher than the rent payable by the lessee in
respect of those premises, the lessor may give the lessee notice in writing-
(a) specifying the higher rent the lessor desires to charge in respect of
those premises;
(b) specifying a date, being a date after the expiration of the period of-
(i) 12 months commencing on the date of commencement of the
tenancy; or
(ii) 60 days commencing on the date on which the notice is
given,
whichever is the later; and
(c) informing the lessee that, at any time on or after that date and until
the rent payable in respect of those premises is further varied the rent
payable in respect of those premises shall be the higher rent referred to in paragraph (a).

(2) A lessor of prescribed premises who has given notice to the lessee of prescribed premises under subsection (1) may, by notice in writing given to the lessee at any time before the prescribed day, withdraw that notice.

(3) Where-
(a) the lessor of prescribed premises has given notice to the lessee of
those premises under subsection (1) and has not withdrawn that notice before the prescribed day; and
(b) the tenancy in respect of which the notice was given is not terminated by virtue of subsection (6) and has not otherwise been terminated,the tenancy shall, by virtue of this subsection, be terminated at the commencement of the prescribed day and shall, for all purposes, be deemed to be immediately replaced by a new tenancy between the lessor and lessee under which the rent payable in respect of the premises shall be the higher rent specified in the notice in accordance with paragraph (1) (a) but which shall, in all other respects, be subject to the same terms and conditions as the tenancy terminated by virtue of this subsection.

(4) Where the lessor of prescribed premises has given notice to the lessee of those premises under subsection (1) and has not withdrawn that notice in accordance with subsection (2), the lessee may, by notice in writing given to the lessor not less than 14 days before the prescribed day, indicate that he or she wishes the tenancy to which the first-mentioned notice relates to be terminated at the commencement of the prescribed day in relation to the first-mentioned notice.

(5) A lessee of prescribed premises who has given notice under subsection (4) may, with the consent in writing of the lessor of those premises, withdraw that notice by notice in writing given to the lessor at any time before the prescribed day in relation to the notice given by the lessor to the lessee under subsection (1).

(6) Where the lessee of prescribed premises has given notice to the lessor of those premises under subsection (4) and has not withdrawn that notice in accordance with subsection (5), the tenancy to which that notice relates shall, by virtue of this subsection, be terminated at the commencement of the prescribed day in relation to the notice given by the lessor to the lessee under subsection (1).

(7) Notwithstanding any agreement between the lessor and lessee of
prescribed premises, the lessee is not, where the tenancy is terminated by virtue of subsection (6), liable to pay to the lessor any sum by way of
damages or compensation for the early termination of the tenancy.

(8) An agreement between the lessor and lessee of prescribed premises to the effect that the rent payable in respect of those premises may be increased otherwise than in accordance with this section shall be void and of no effect.

(9) Where the lessee of prescribed premises has been required, in pursuance of an agreement referred to in subsection (8), to pay, and has paid, a higher rent in respect of those premises than the rent applicable to those premises in respect of the period in respect of which the payment was made, the lessee may recover from the lessor of those premises in a court of competent jurisdiction an amount equal to the difference between the higher rent paid and the rent applicable to those premises in respect of that period or may, without prejudice to any other method of recovery, deduct that amount from any rent payable by him or her to the lessor within 6 months after the date of the payment of the higher rent.

(10) In this section, "prescribed day", in relation to a notice given under subsection (1) in respect of prescribed premises, means-
(a) the day specified in the notice in accordance with paragraph (1) (b);
or
(c) where a tenancy of those premises has, by virtue of subsection (3), been terminated within the immediately preceding period of 12 months, the day immediately succeeding the expiration of that period, whichever is the later day.






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