Property management at ground zero
Transparency goes a long way, the landlord must come with clean hands.
Blogger: Edwin Almeida, Managing Partner, Just Think Real Estate
As I was reading an article in the AFR, Rental agents who couldn’t give a rat’s' by Rebecca Thistleton, I began to think back on the notion behind the revised Residential Tenancies Act 2010 (NSW). The principle purpose I understood was, to bring landlord and tenant to a closer working relationship and maintain harmony in this relationship “the tenancy”. This was to result in a windfall both to landlord and tenant. Provided the agent controlled the process.
However, the proposed harmonious relationship, “does not-will not - won’t ever eventuate” if; landlords, landlord’s agents and tenants are not transparent when they first come to the negotiation table before the signing of the lease. It’s a two way street, a good property manager must control and facilitate the process. A show of good faith on behalf of the landlord will go a long way and this is perhaps what the minister was referring to, in her maiden speech, as she introduced the changes to the Act.
Without transforming this article into, a sociological piece and dealing with the agent-tenant interaction. Allow me, to point out where transparency begins and assists all parties concerned to move in harmony. I refer to 4 main questions that revolve around the requirements governing disclosure of “Material Facts” when it comes to signing a lease. Questions which by law require clear answers. The answers given by the agents or the landlord in turn, producing the fundamental framework for maintaining a working relationship between parties concerned with the tenancy.
1) Have the premises been subject to flooding, in the last 5 years?
a. Issue of security-safety
b. Insurance implications
2) Are the premises subject to significant health or safety risks that can not be seen?
a. Prior mould issues that has been cleaned
b. Vermin infestation that has been treated
c. Asbestos sheeting exposed
3) Have the premises been the scene of a violent crime in the last 5 years?
a. Retaliation implications
b. Implications governing beliefs
4) Will the tenants have to share common areas?
a. Boundaries around granny flats
b. Common areas in and around strata lots
The benefits for having a meeting of the minds by being transparent unfolds, when we take into account the following notion, “happy tenant-happy landlord”. Therefore, by referring back to the questions above and sub points, allow me to answer the following question in brief.
What does make a tenant happy?
• Quiet enjoyment of the property.
• Property maintained to a reasonable standard.
• Issues being resolved quickly by agents/landlords.
Now let’s explore what makes a landlord happy.
• Rent paid on time.
• Property well maintained.
• Respecting neighbours especially in property where common areas are shared.
No, this is not an article on positioning the tenant above the landlord. The tenant has many critical responsibilities as well to keep to the lease terms, we will address in “Part 2” of this series. The underlying motive of “Part 1” is however, to make investors/landlords and property managers aware, transparency is the best and less hazardous path to take. Concealment of “material facts” has the very potential to; aggravate the tenancy, diminish the value of the property and land both agent and landlord with hefty fines and possible criminal charges along with law suits.
Resolving minor issues before the properties are let out while there is a short vacancy period. Attending to repairs and issues that may have risen prior to or during the tenancy, professionally as well immediately, protects all the parties. These are only two of the many ways you can work with your property manager and tenant to; be sure your investment is protected, not incur possible legal costs and again I say “happy tenant-happy landlord” which results in regular and on time payment of rent.
Dealing with issues raised before and during the tenancy proactively, as opposed to an ad-hock basis and with a belief you can fool the tenant, is a role the property manager and landlord can work toward to establish transparency and credibility. Therefore, placing the landlord and the agent on the front foot as well as gaining the psychological control of the tenancy. The control inherited because you are acting within the confines of the Tenancy Regulations and the trust placed on you by the tenants themselves, when they acknowledge how honestly you operate.
About Edwin Almeida
Edwin is an independent real estate agent who is passionate about teaching people the many skills he has learnt over the years. Edwin teaches people skills that can assist in making decisions on all things real estate and property, from preparing to rent to leasing property as a landlord, buying a first home to organising an investment portfolio. Edwin is most happy when he gives free advice, and shares industry secrets with other real estate professionals.