The Letterbox - August 2012 - From NSW Office of Fair Trading

Below you'll find the NSW Fair Trading's most recent enewsletter called "The Letterbox". This newsletter is an invaluable source of information, for landlords, tenants and property managers alike and is well worth subscribing too.

You'll find the online version of the newsletter here. Or alternatively you can head straight to NSW Fair Trading's website here.

Throughout the newsletter I'll post some of my own comments in purple. Enjoy, and let me know if you have any questions!


Welcome to the latest edition of The Letterbox, NSW Fair Trading’s enewsletter about tenancy issues. This edition focuses on ending a tenancy.
Ending a tenancy
Whether you’re a tenant or a landlord there are many reasons why a tenancy might end.
As a tenant you might want to terminate the lease because you're moving to a new home or because you think your landlord is in breach of the agreement. 

If you are a landlord you might want to end the tenancy because you have sold the property or you may have issued an eviction notice because you believe your tenant has broken the lease, for instance by not paying rent.
Whatever the reason, it is important that you understand how you can prevent an early termination if it’s not what you want, and the obligations you have when you are ending a tenancy.
Information on these matters can be accessed by downloading compilation fact sheets on Ending a tenancy – information for tenants (in PDF format size: 1.03mb) and Ending a tenancy – information for landlords (in PDF format size: 590kb) from the Fair Trading website. 
Read on to see Fair Trading policy experts answer your questions.
Back to top
Answers to your questions on ending a tenancy
Q. I want my tenant to move out. I am aware that I must provide them with written notification but I am not sure how much notice I must give them to vacate the premises. What are the time limits?
A: The amount of notice you need to give your tenant depends on why you’re terminating the tenancy.
Generally, if the lease is due to end and you want to terminate the tenancy you must give the tenant a minimum of 30 days notice to vacate. If the lease has passed its fixed term and you simply want to end the tenancy you must give the tenant 90 days notice to vacate.
There are other minimum time periods you must give the tenant to end the tenancy on specific grounds. Some of these include:

• 14 days notice for rent arrears or others breaches of the agreement; and
• 30 days notice if the premises have been sold after the fixed term has ended and vacant possession is required by the buyer under the terms of the sale contract.

Go to the Giving a termination notice page on the Fair Trading website for more information about notice periods.
The Serving notice page on the Fair Trading website also provides useful information when you are terminating a tenancy.
Q: I am a tenant and I have 11 months left on my lease. The oven does not work. The landlord keeps promising me he will fix it but no action has been taken. Will I have to pay any fees if I move out before my lease ends?
A: Repairs to a stove are urgent repairs. If the landlord does not fix the stove within a reasonable time, and you have given them a reasonable opportunity to have it fixed, you could issue the landlord with a termination notice for breach of the agreement and move out after 14 days.
No fees are payable if you terminate a tenancy early for breach of the agreement.
If the landlord disagrees with you, they would need to take the matter to the Consumer, Trader and Tenancy Tribunal and prove they have not breached the agreement.
Another option for you would be to ask the Tribunal to terminate the tenancy and seek compensation for your losses.
Because oven repairs are classed as urgent repairs you can also arrange for the oven to be fixed and be reimbursed up to $1000 by the landlord. If the stove costs more than $1000 to fix or you can’t afford to pay for it up-front, you can apply to the Tribunal for an urgent hearing to get the repairs done. You can also ask for the rent to be paid into the Tribunal or for a rent reduction until the repairs are carried out.
Go to the Getting repairs done page on the Fair Trading website for more information.
Q. My tenant and I are half way through our lease. I have just sold my property. The tenant wants to stay for the remainder of the lease but the new owners want to move in. What can I do?
A: Under the residential tenancy laws, if the property is sold during the fixed term of the agreement, the lease goes with the sale and the new owner is bound by it.
The tenant does not need to move out and can stay in the property for the duration of the lease. If the new owners want to move in they can negotiate with the tenant and pay compensation to end the lease early.
For more information, go to the Giving a termination notice page on the Fair Trading website.
Q. I am about to move out and the landlord said I have to get the carpets professionally steamed cleaned. I vacuumed the carpets regularly and never damaged them. Do I have to pay for carpet cleaning? See my response to this question from December 2011 here
A: No, unless you have kept a pet such as a dog or cat on the premises, you cannot automatically be asked to have the carpets professionally steamed cleaned when you leave the tenancy. Compulsory carpet cleaning clauses are prohibited and not enforceable.
When you end the tenancy, you are required to leave the premises as nearly as possible in the same condition as when you first moved in, allowing for any fair wear and tear. Furniture marks on the carpet and worn carpet in high traffic areas are examples of fair wear and tear, which you are not responsible for.

I'm not sure if I agree with high traffic areas being considered fair wear and tear - these areas come up great with a good professional steam clean. As far as I'm concerned high traffic areas are no different to hand marks on walls or powerpoints, I would expect them to be cleaned up too.

However, if you have damaged the carpet such as by spilling wine on it then you would need to have the carpet cleaned.
Go to the Fair wear and tear section on the Getting your bond back page of the Fair Trading website for more information.
Q. I have recently moved out of my rented property. How do I get my bond back?
A: If you haven’t done so already, you should contact the agent or landlord to arrange a mutually convenient time to do the final inspection and fill in the outgoing condition report. This report details the condition of the property at the end of the tenancy.
If you and the agent agree on how the bond should be paid out, you can both sign the bond claim form available from Fair Trading and lodge it. This way, the bond can be paid out straight away.
You should try and sort out any bond disputes directly with your landlord or agent before your bond claim form is lodged. This way you can avoid having to go to the Tribunal if there is a dispute about your bond.
If there is a dispute over the bond that can’t be resolved, you can lodge the claim form yourself without the landlord or agent’s signature. If you do this, Fair Trading will send a letter to the other party advising them that they have 14 days to dispute your claim in the Tribunal. If the landlord or agent does not apply to the Tribunal within the 14 days, your bond will be paid out to you once the 14 days is up.
Tenants can go to the Getting your bond back page on the Fair Trading website for more information.
The landlord can also make a claim on the bond without the tenant’s signature. If the landlord lodges a bond claim form without the tenants signature, Fair Trading will attempt to contact the tenant in writing giving 14 days to dispute the claim at the tribunal, after which the bond will be paid out to the landlord.
Landlords can find more information on Making a bond claim page on the Fair Trading website.

A landlord or Agent has 30 days to finalise a bond. Sometimes this can be done a lot sooner, however regularly we are waiting on things such as invoices from cleaners, and once they are received the bond will then be finalised.

Q. My tenant has moved out but they have left behind all of their furniture. What should I do?
I am currently dealing with this exact problem.
A: You should first check that the tenant has actually moved out and is not on holidays or sick in hospital.
There are penalties under the legislation for unlawfully dealing with goods left behind by a tenant.
You should try and contact the tenant by phone, email or in writing first and check with the neighbours if you cannot contact them. If the tenant has also stopped paying rent this might be a good indication that they have left the property. If you are unsure, you can apply to the Tribunal for an order that the tenant has abandoned the property as well as orders about how to deal with the tenant’s goods.

Make sure you take lots of photos to indicate the state of the property. If the lawn is over a foot high, if there are cobwebs on the door frame and there is junkmail scattered about the premises then these photos will help show your reasons for believing the property to be abandoned.

If you are satisfied that the tenant has gone, you must store all of their furniture in a safe place (either on the property or elsewhere) for 14 days. Any personal goods such as birth certificates and passports must be stored for 90 days.
You should then contact the tenant in writing, in person or by telephone if you can, telling them you will dispose of their furniture if they don’t collect it within 14 days. If after 2 days you still cannot locate the tenant, you can leave a notice on the front door of the property or another prominent place.
If after 14 days the tenant doesn’t collect the furniture you can dispose of it by taking it to the tip or giving it to charity.
Alternatively, you can sell it and forward the proceeds to the tenant (or the Office of State Revenue after 6 years as unclaimed money if you can’t find the tenant). You are allowed to deduct your reasonable costs of sale and any occupation fees if the tenant left behind so many goods that they stopped you from re-letting the property.
Go to the Goods left behind by your tenant page on the Fair Trading website for more information.

This is a pain in the bum, because most of the items left behind are worthless, and therefore cost you a lot of money to remove and/or store them, which you're very unlikely to see again. Another reason why you should have LANDLORD PROTECTION INSURANCE! Very important!

Back to top
Status update – Fair Trading is now on Facebook 
Fair Trading is reaching out to the online world through its new Facebook page with over 1,400 likes in the first 24 hours.
Matching the success of Fair Trading’s Twitter account, Facebook has already proved to be a step in the right direction for community engagement. 
“We have a long history of providing high level customer service and engaging with our clients,” says the Commissioner for Fair Trading, Mr Rod Stowe. “Now we are taking that even further by asking the community of NSW to join our social network.”
Being on Facebook has made services more accessible to the community. It provides up-to-date information on changes to legislation including encouraging people to ‘Have their say’ on reforms, and allowing online audiences to be involved in conversations.
Join the rapidly growing group of followers by hitting ‘Like’ on the NSW Fair Trading Facebook page.
The Consumer, Trader and Tenancy Tribunal (CTTT) are also using the Twitter and Facebook communication platforms. Go to the Social media page on the CTTT website for more information about their Twitter and Facebook account.
Back to top
Did you know Fair Trading has a YouTube channel?
With over 35 videos on a range of topics, Fair Trading’s YouTube channel is worth checking out.
You can watch videos on buying or selling a home, strata living, picking a good real estate agent, discrimination in the rental market and loads more.
Visit Fair Trading’s YouTube channel.
Back to top
Listen up! Consumers have their rights read
Fair Trading has updated its popular audio resource Your home, Your car, Your money.
The 21 audio files help empower vulnerable consumers to exercise their consumer rights and combat unscrupulous operators.
“The audio resource contains valuable information on selling, buying or renovating a home, living in strata schemes, buying a car, door-to-door sales, preparing a will, moving into retirement villages, scams and traps for the unwary when using the internet,” Fair Trading Minister Anthony Roberts said.
You can listen to the audio files on the Your home, your car, your money page on the Fair Trading website or by ordering a free audio CD pack by telephoning Fair Trading on 13 32 20.
Back to top

In the next edition 
The next edition of The Letterbox - due for release in November 2012 - will focus on the topic of pre-agreement charges, ie. limits on bonds, holding fees and paying rent in advance. We invite you to email your questions to us at theletterbox@services.nsw.gov.au by Friday 7 September 2012.
Back to top

Feedback
We want to make sure The Letterbox is relevant and interesting. Please send us your comments, suggestions or topics you wish covered to theletterbox@services.nsw.gov.au
Back to top
Subscribe to Fair Trading's enewsletters 
Subscribe to The Letterbox and other free Fair Trading enewsletters.
Back to top

Choosing an agent

I get alot of prospective landlords who choose their agent based on how much they say the property is worth. This is such a bad idea, lets go through some better ways.

• You should like your agent. They're going to be calling you with problems, you're better off liking them to begin with, because if someone you don't like very much is calling you with issues, it's going to make those issues that much harder to handle...
• Read through the managing agency agreement. Make sure you agree with everything you're signing for now, because you can't change it down the track.
• Are you happy with the commission rate? This is one area where it doesn't hurt to compare, the difference between 7% and 8% may only be a couple of dollars every week, but it does add up.
• Are there any other fees? Just because you're only paying 5% commission doesn't mean you're getting a great deal. Are they also charging for advertising? Repairs? Tribunal hearings? Find out exactly what you'll be paying for in advance.
• Having said those last two points, I need to also point out that you get what you pay for. The is quite possibly a reason why one agent charges you 8.5%, while the one down the road is willing to go down to 6.5% - are they going to be offering you the same standard of service as the more expensive agent?
• How many inspections will your agent do a year? In NSW by law they can only do a maximum of 4 a year, but most agents will only do 2 - personally I only do 2, unless I'm worried about how the property is being kept. I don't want to alienate good tenants by constantly looking over their shoulders. With good long term tenants I'm happy to only do 1 inspection a year.
• How does the office work? Well you just be dealing with one property manager? Two or three? or will you be dealing with a whole team - with a different person calling you for each matter. How many property managers do you want to be dealing with? How do they deal with tenant rental arrears?
• How long has the property manager you're going to be dealing with been with the company? If the office has a high turn over of staff you'll be likely to see several property managers come and go. This isn't good for your property, as a property manager that lasts longer knows more about the property, what repairs its been through, how long ago the hot water system was installed etc. In fact, while you're house hunting for the perfect investment property, it wouldn't hurt to also check the jobs section of the paper - is there one agent who seems to always be asking for property managers? Chances are they have a high turn over of staff.
• What sort of training do the staff do? Are they up to date on all current legislation? Are they kept motivated?
• What application process do they go through? Are they a member of any defaulting tenant databases such as TICA, Landlord's Advisory Service or National Tenancy Database? Chances are you won't find an agent that is a member of all three, but they should definitely be a member of at least one of these services.
• How does the office handle the bad stuff? No point burying your head in the sand - bad tenants exist, and regardless of how strenuous the tenancy applications are processed some bad tenants do slip through the cracks. What happens then? Do they have experience with the Consumer, Tenancy and Trade Tribunal? How do they handle complaints?
• Do they bad mouth other agents to you or other clients? This is really unprofessional. There is no excuse for this, and basically it's just childish. Yes I'll admit it, amongst our office we often have a good b*tch about what other agents around town have gotten up to, but we would never even consider sharing this information with current or prospective landlord and tenants. It's just not on.
• Talk to other people you know with investment properties, chances are they'll tell you all about their current agent, and why you should or shouldn't go with them. Also, many cities now have Facebook pages which are dedicated to good or bad reviews of different companies around town, if you have access to those pages feel free to ask the general public for their thoughts on the matter. However when doing this keep in mind that you should take every review with a grain of salt.

Do you have any suggestions about finding a good agent? How about things that you wish you had thought of before signing up? Share them here!

The Organised Housewife

I have decided to take part in the "20 Days to organise and clean your home" challenge, created by The Organised Housewife.

I've decided to share this challenge here, because I know there are plenty of people out there who claim they don't have time for cleaning, and whose lives in general could do with a good organising. For that reason I'm inviting everyone to join me on this challenge, and we'll see how easy it is to get into a good routine, and hopefully stick with it!

A message to all of my landlords -

The main point of this post is to have a bitch about some of my landlords. If you're a landlord and feel I'm way out of line here please tell me, other wise please take what I say to heart and keep it in mind!

1. If you haven't heard from me in a while, that's a good thing! It means everything is ticking along the way it should. I know we may have a friendly relationship, but that doesn't mean we're friends. I'm not going to call you for a chat, if I'm calling it means there's something wrong - your tenant is vacating, or is in arrears, there's a repair needed, etc. I'd love to have time to call and see if there's anything else you'd like me to do, but unfortunately that time does not exist.

2. Don't rent out a property that you have some form of attachment to - it's not going to stay how you remember it, and the tenants have the right to live their lives how they see fit, not how you think they should be living.

3. If you have a problem with how your property is being managed tell your property manager about it, don't go straight to their boss and complain, and don't make snide comments about it on social media like facebook. It will get back to your property manager and sour the relationship, without fixing the problem.

4. I also don't have time to call you and tell you what was wrong with the leaking tap/hot water system/tv antenna or whatever the last repair was that got done. You will get a copy of the invoice, read that. If you don't understand it call the tradesman who did the work, they will be more likely to explain it to you then what I will.

5. Remember yours is not the only property your property manager looks after. They are not sitting waiting for your call, and don't check in with your tenant every day.

Sorry for the whingy post, number 3 is what set me off tonight...

Don't you hate that!?!

I had a whole post ready to go and now it's gone!

That's what I get for trying to type one on my phone instead of using the word processor on my computer!

I'm going to bed, better luck tomorrow...

A usual day in Property Management

9:00am - Get into work and start computer up. Check to see what has appeared in your in tray since you were last here. Sort out the crap and put the important stuff somewhere where you can deal with it later. Do all this while taking phone calls that come in and seeing people who have come to the office to see you.

9:10am - Delete all the spam from your inbox, and start making your way through the real emails. Responding where required and making notes of things you need to get to later. Do all this while taking phone calls that come in and seeing people who have come to the office to see you.

9:30am - Return phone calls that you missed while you were out of the office. Make notes of any jobs that this creates. Do all this while taking phone calls that come in and seeing people who have come to the office to see you.

10:00am - check to see who's behind on their rent and text, email, send letters our call them to find out when it should be coming in. If there's any one who is substantially behind, call the landlord to update them on what's happening. Do all this while taking phone calls that come in and seeing people who have come to the office to see you.

10:30am - Go through applications that have come in and either call, email our fax for reference requests. Give all applications that are either incomplete or have been filled out incorrectly back to the receptionist so she can call the applicants back and tell them that we do need answers for all of the questions on the forms, not just some of them. If there are any suitable applicants try and contact the landlord to get them approved. Send text messages or call any of the dodgy applications to let them know they've been declined. Put aside any applications that are waiting on return phone calls. Do all this while taking phone calls that come in and seeing people who have come to the office to see you.

11:30am - Call landlords about repairs that need to be done on their properties, argue with them that while TV is not considered an essential service, the tenant rented a property with television reception, and therefore they need to get the antenna fixed so it works again. Also explain to them that you use your tradespeople because you've found that they are reliable and reasonably priced, and no you don't feel comfortable getting their nephew to do it for half the price. Agree with them that owning a rental property is supposed to be an investment, but point out that most investments also cost money, and they should have expected repairs when they bought it. Tell them you really don't have time to go over to the property to check to make sure the leaking tap they've reported hasn't been intentionally damaged, but your plumber would let you know that anyway. Enforce that just because their neighbour once stopped their hose from leaking, doesn't make him a licensed plumber, and he's really no better then the nephew. Agree to call them back to let them know how much the repair cost and what the problem was.

Action all repairs that you can by calling emailing or faxing the trades people. Do all this while taking phone calls that come in and seeing people who have come to the office to see you.

12:00pm - Check through all final inspections that were carried out the previous day and call the tenant to inform them what needs to be done, such as cleaning, carpet cleaning, lawns and gardens, damage, outstanding water accounts, missing keys and outstanding rent. Explain that you're sorry they believe the place looks better now then when they moved in, but according to the condition report that they had for 7 days back when they first moved in, there were no stains on the carpets, the walls weren't all grubby, the kitchen was clean, the lawns and gardens were done, and there were no holes in the walls. Email them copies of photos you took from the beginning of the tenancy proving this to be the case. Agree to meet them at the property to show them what cleaning was missed. Schedule it for later in the week. Calk the landlord to keep them updated. Do all this while taking phone calls that come in and seeing people who have come to the office to see you.

12:30pm - Print off your calender, and collect the required keys for all afternoon appointments. Do all this while taking phone calls that come in and seeing people who have come to the office to see you.

12:45pm - Leave the office for your afternoon appointments, first one is at 1:00pm.

1:00pm - Your appointments usually start around this time, and you try and spend only 10-15 minutes at each property, using the last 15-20 minutes of the half hour to get to the next property, which is usually over the other side of town. Answer all the same questions at each property; Q - "What do I do now?" A - "If you're interested in applying for the property pop into the office to pick up an application form, answer all questions and include copies of ID and proof of income, then we'll process it for you." Q - "does the property allow pets?" A - "if you have a good application, the landlord will be less likely to say no to a dog or cat." Q - "how long does the application process take?" A - "that depends, if your references are easy to get in touch with then it can take maybe 3 business days, but if we have trouble getting in touch with any one, it takes a lot longer." Q - "Is the owner planning on putting the property up for sale?" A - "They haven't said anything to me about it, but peoples conditions can change at any time, so I'm not sure what could happen down the track." Q - "What happens if I move in and the house sells?" A - "You would still have the property for the length of your lease, regardless of whether the property sells, after your lease is up they would either give you 30 days notice to vacate, or if the new owners are investors then you wood stay on at the property." Etc.

Do all this while taking and returning phone calls that you've missed.

5:30pm - Go home. Remember to leave your work behind you at this time so you can get some rest and prepare to do it all again tomorrow.

**note** On top of your daily calendar, you also need to include a 2 hour meeting once a week, 3 hours of routine inspections twice a week, and any ingoing or outgoing inspections that are required, which take approximately 1 hour each.