Whether it is routine maintenance, emergency repairs, lease renewals or property vacancies, you\u00a0will always have the landlord asking you to explain the necessity and costs involved. Property\u00a0Management over the last decade has become much harder, and time consuming, as legislation has\u00a0changed and people are taking others to tribunal over the smallest of things.<\/p>\n
The first lease I prepared was in 1997. It was typed on a typewriter with carbon copies, and there\u00a0was no such thing as inventories, CMA\u2019s or online bookings. If someone had told me that in 18\u00a0years\u2019 time that we would be arranging smoke alarms to be checked for every new lease I don\u2019t\u00a0think I would have believed them.<\/p>\n
This is what owners are also having trouble understanding. With regards to legislative items such as\u00a0smoke alarm checks, blind compliance and pool certificates, the simplest way to explain your\u00a0reasoning of these charges is that owners simply do not have a choice. If an owner refuses to\u00a0comply, you as a managing agent must cease management of the property or else you will be the\u00a0one at tribunal. My advice is to include these in a monthly\/quarterly newsletter or as a note on all\u00a0owners statements along the lines of \u2018\u2019you may notice additional charges appear on your statements\u00a0over the coming months for smoke alarm servicing these are legislative requirements and MUST be\u00a0performed. Please see attached information\u201d.<\/p>\n
Signing of a Form 6: It still bewilders me that upon due diligences there are still agencies that do not\u00a0have a signed copy of either a 20A or a Form 6 on file. I am not talking hard copy but even just a\u00a0scanned copy. The rules are the same \u2013 without a copy signed, if the owner refuses you must\u00a0immediately give the property to them to self-manage. I will also point out the rule is quite simple \u2013\u00a0if OFT find out you are managing a property without an agreement , you have been illegally\u00a0representing the owner and should not have been collecting any fees for the entire period you have\u00a0acted without a signed agreement. Therefore, you will have to refund ALL fees collected back to the\u00a0landlord and face a heavy fine from the OFT.<\/p>\n
Maintenance: This is by far the toughest item to be agreed upon. Although there is that lovely little\u00a0section in the management agreement where the landlord indicates they agree for you to spend\u00a0$500.00 or 2 weeks rent (for example) I highly doubt they will be happy when you spend $450 on\u00a0general repairs that may not have been urgent but make the tenant more comfortable. The phone\u00a0call comes in and the irate landlord asks you why you repaired the curtain rod, loose toilet seat and\u00a0dripping tap without their knowledge and you reply that the tenant requested it to be done. A\u00a0landlord will not find this answer acceptable. Dealing with tenant maintenance requests that are not\u00a0urgent is always difficult and each landlord will also view these maintenance items differently.<\/p>\n
In short there are 2 types of landlords<\/p>\n
1) Mr & Mrs \u201cwe appreciate your looking after our home as if it is yours\u201d<\/p>\n
2) Pay me the rent to pay my mortgage and that is all I care about.<\/p>\n
Owner type 1 will appreciate that you are trying to keep the property well maintained, as well as\u00a0making the tenant live as comfortably as possible so that they continue to remain great tenants and\u00a0pay their rent on time and will live at their property for as long as possible. This tenant will\u00a0understand that the landlord repairs things so the $10 rent increase will be justifiable.<\/p>\n
Owner type 2 \u2013 Not so much! This is what we call a \u201ctread carefully owner\u201d. This owner will likely\u00a0threaten to take the management off you at least twice in a 2 year period. The best way to\u00a0approach this situation is to advise them that the repairs are necessary to avoid any unnecessary\u00a0disputes, as tenants are very \u2018legislation canny\u2019 and to also mention that upon lease renewal we may\u00a0look at increasing the rent. Similar to above, but the mention of more income is a focus. Beware\u00a0not to promise though, due to CMA\u2019s in the area this may not be possible when the lease is due for\u00a0renewal. You may also need to remind this owner that they signed the section above allowing you\u00a0to spend $$ without notification and if they would like that to be amended you are happy to do so.<\/p>\n
You may also like to mention that part of your job as managing agent is to maintain the property for\u00a0the landlords benefit as well.<\/p>\n
In saying that, you as the agent need to determine one thing \u2026.is it worth it? If the property is\u00a0boutique maybe it is, but if it is $300 per week with 7% fees, it may not be worth it. An onsite\u00a0manager may view this differently, of course, as the complex is their livelihood.<\/p>\n
Lease renewals: \u201cno, I don\u2019t care if the tenants are on a lease\u201d. The agency cares because generally\u00a0you will receive a lease renewal fee. A rent roll valuation is favourable \u2013 fixed term leases attract\u00a0more income, the structure of a fixed term tenancy makes it much easier to prepare (busy periods,\u00a0lease expiries, actioning rent increases within legislation etc). Owners need to feel that their half\u00a0weeks\u2019 lease renewal fee of $200 is warranted\u2026what will they get for it?<\/p>\n
1) Financial security<\/p>\n
2) No insurance issues \u2013 Besides your industry insurers, AON, EBM, Terri Scheer etc some\u00a0insurance companies such as banks, home insurers etc do not cover landlord insurance if\u00a0tenants are on periodic leases.<\/p>\n
3) Rent increases can be written into leases these days so there is nothing wrong with a 12\u00a0month lease with an increase after 6 months.<\/p>\n
Property Vacancies: We have been lucky in QLD of late that vacancy rates are very low. However,\u00a0some owners expect you to find them a tenant a day after the other tenant vacates. The general\u00a0turnaround time should be close to a week minimum to allow the Property Manager time to\u00a0perform the vacate inspection, have the tenant attend to anything they need to, plus have any\u00a0maintenance carried out. This needs to be explained to your owner by the BDM upon signing the\u00a0management agreement.<\/p>\n
The majority of the time that properties cannot rent could be due to rent being too high. A property\u00a0should not be listed prior to 4 weeks from vacate date or it will become stale. The average person\u00a0needs to give 2 weeks\u2019 notice to vacate and will begin looking 2 weeks before this notice. The\u00a0property manager\/leasing consultant will perform the CMA and advise the owner of what they feel\u00a0we be an achievable rent. If an owner is insisting on a higher rent you need to advise them that you\u00a0are happy to try higher for a 2 week period but if the property does not generate interest in that\u00a0time they will need to look at dropping the rent. For some reason, owners see $450 (what they\u00a0want) compared to the $430 you are advising, as a massive difference in rent, but they forget that\u00a0for every week the property is vacant they have lost $430\u2026.which actually negates the $20 per week\u00a0increase over 21 weeks (for each empty week).<\/p>\n
The sign up process with a tenant, and owner, is the most important thing to cease objections. If\u00a0you advise them of all your systems and procedures at the get go this will generally halt a lot of\u00a0objections at a later date. The sign ups may take longer but this will stop a lot of irate phone calls in\u00a0the future.<\/p>\n
We are here to help at Real Strategix, if you have any questions or would like some advice please\u00a0contact us.<\/p>\n
Lauren Kropp<\/p>\n
Director Real Strategix<\/p>\n
www.realstrategix.com.au<\/p>\n","protected":false},"excerpt":{"rendered":"
Whether it is routine maintenance, emergency repairs, lease renewals or property vacancies, you\u00a0will always have the landlord asking you to explain the necessity and costs involved. Property\u00a0Management over the last decade has become much harder, and time consuming, as legislation has\u00a0changed and people are taking others to tribunal over the smallest of things. The first lease I prepared was in 1997. It was typed on a typewriter with carbon copies, and there\u00a0was no such thing as inventories, CMA\u2019s or online bookings. If someone had told me that in 18\u00a0years\u2019 time that we would be arranging smoke alarms to be checked for every new lease IRead More →<\/a><\/p>\n","protected":false},"author":1100,"featured_media":121,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"_mbp_gutenberg_autopost":false,"footnotes":""},"categories":[7,6],"tags":[],"class_list":["entry","post","publish","author-laurenrealstrategix-com-au","post-117","format-standard","has-post-thumbnail","category-general-interest","category-landlords-tenants-renting-and-management"],"_links":{"self":[{"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/posts\/117","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/users\/1100"}],"replies":[{"embeddable":true,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/comments?post=117"}],"version-history":[{"count":5,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/posts\/117\/revisions"}],"predecessor-version":[{"id":125,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/posts\/117\/revisions\/125"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/media\/121"}],"wp:attachment":[{"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/media?parent=117"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/categories?post=117"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/tags?post=117"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}