Do You Own An Investment Property?

If you are the 1 in 5 Aussies who own an investment property, changes to a number of rental laws took place on 23 March this year which affects you as a landlord, the property manager you have appointed and your tenants.

Given that the changes are plentiful, I suggest you look at their media release to get your head across every point. To make things easier, I have pulled out four key points which I see are crucial to know as a landlord. As always, reach out to your property specialist or adviser if you have any questions.

New smoke alarm obligation

As we approach Winter, it’s a timely reminder to ensure that all smoke alarms are all in good order. Given the cooler temperature, tenants are more likely to turn on heaters or use their fireplace (if the place has one) with residential fires generally higher in this season.

To this point, one important note to know as a landlord is below:

  • You must repair or replace a smoke alarm within 2 business days of being notified.

Fit-to-live in requirements

As a landlord, you are now required to provide a property that is ‘fit for habitation’.  The changes introduced seven minimum standards which clarify what ‘fit for habitation’ means. This is applicable throughout the tenancy from start to the end of the agreement. No shortcutting here!

The NSW Fair Trading outlines this clearly below as a minimum:

  1. Be structurally sound
  2. Have adequate natural or artificial lighting in each room, except storage rooms or garages
  3. Have adequate ventilation
  4. Be supplied with electricity or gas, and have enough electricity or gas sockets for lighting, heating and other appliances
  5. Have adequate plumbing and drainage
  6. Have a water connection that can supply hot and cold water for drinking, washing and cleaning
  7. Have bathroom facilities, including toilet and washing facilities that allow users’ privacy.

Minor alterations, fixtures, additions and renovations

Tenants can now make minor alterations, fixtures, additions or renovations to the property. As a landlord, you cannot unreasonably withhold consent if it’s one of the points below as outlined by Fair Trading. However, they cannot just go and do it without your approval. Written permission is needed.

Here are the points for you to be aware of:

  • securing furniture to a non-tiled wall for safety reasons
  • fitting a childproof latch to an outdoor gate of a single dwelling
  • inserting fly screens on windows
  • installing or replacing an internal window covering e.g. curtains and removeable blinds
  • installing cleats or cord guides to secure blind or curtain cords
  • installing child safety gates inside the property
  • installing window safety devices for child safety
  • installing hand-held shower heads or lever-style taps to assist elderly or disabled occupants
  • installing or replacing hooks, nails or screws for hanging paintings, picture frames and other similar items
  • installing phone line or internet connection
  • planting vegetables, flowers, herbs or shrubs (shrubs that don’t grow more than 2 meters) in the garden if existing vegetation or plants do not need to be removed
  • installing a wireless removable outdoor security camera
  • applying shatter-resistant film to window or glass doors
  • making modifications that don’t penetrate a surface, or permanently modify a surface, fixture or structure of the property.

As a landlord, you may require the following changes be carried out by a qualified person:

  • installing hand-held shower heads or lever-style taps to assist elderly or disabled occupants
  • installing a phone line or internet connection.

This does not apply if a property is listed on the loose-fill asbestos insulation register, or if the property is a heritage item. Some restrictions and exclusions also apply to property in a strata scheme, residential land lease community, or to social housing properties.

Right to break lease or rent increases

For periodic leases, the rent can only be increased once a year (12-month period). If it’s a fixed term lease of two years or less, rent can only be increased within that time as outlined in the agreement. Now if a tenant needs to break a lease, below is what Fair Trading NSW outlines.

Tenants will pay a break fee of:

  • 4 weeks rent if less than 25% of the fixed term has expired
  • 3 weeks rent if 25% or more but less than 50% of the fixed term has expired
  • 2 weeks rent if 50% or more but less than 75% of the fixed term has expired
  • 1 week’s rent if 75% or more of the fixed term has expired

What this all means

In summary, there are a series of changes that affects you as a landlord. After all, this is not meant to be an exhaustive list of the changes! If you feel a little overwhelmed about the number of them, you’re not alone. Once you know know your obligations, it will help you help your tenant care for the property. I hope this article has assisted you in some way on this.  As always, we’ve got you covered.

Written by Christine Heywood, Director at RE Collective, 21 April 2021