Changes in Property Management & Consumer Laws

[LostInTheWoods]

Just a little heads up for those who have rental properties - self managed, or managed through an agency.

Come July 1st 2013, the new consumer protection laws relating to renting come in.

This means that there are new contracts that need to be in place by 1st July as well as a whole bunch of new requirements for rentals.

Everything is in the tenants favour. The laws treat the tenant as if they are idiots, and therefore not responsible for signing a contract.

It is almost as if the contract means nothing now as break of lease has little charges.

Do your research as it will affect you.

If you have questions, let me know and I will try to assist. There are something like 100+ law changes that they are releasing all at once. Awesome . . .

My wife manages 150 properties, which is a 100% workload. This will generate a shit load of work, confuse owners and tenants as well.

For owners, there are new minimum security requirements, which will cost most owners.

http://www.commerce.wa.gov.au/ConsumerProtection/Content/Property_renting/Renting/NewRTALaws.html

[GTB Liberty]

Yep ... Reminiscent of changes to the retail tenancies act.

I'm a tenant ... Spoon feed me please.

[Damo 69]

antilag, more usefull than my property manager.

[LostInTheWoods]

Actually Damo, She only got told about it this week. She now has 14 days to make 150 properties, contracts and PCR's comply. It will create chaos.

Thank Consumer Protection for that one! :-)

Although there are many terrible property managers out there.

[cplagz]

Thanks for the heads up, was about to sign up an offer on a property with a periodic lease on it... will make the owners serve notice as part of the contract to vacate by X date.

[Damo 69]

ok she isnt that bad, responded straight away

Hi Damian,



Most changes are quite small and should not play much of an effect on you.



The main big change is that of the option fee. Currently we would require a deposit equivalent to 1 weeks rent for a potential tenant to put down an application on a property. This has pretty much been scraped and as of the 1/7/2013 the option fees are capped at $50.00 per property for properties under $500.00 per week and $100.00 capping for properties above. This allows for tenants to apply for multiple properties at once. The down side to landlords is you will have more people pulling out of their applications as they can choose another one they instead applied for. Makes for a lot more work for agents as well as we will in most cases processing applications when the tenant may have no intention of proceeding with it in the end.



Other changes are general things that we have already enforced:

- Property Condition report must be provided to every tenant when they move in. We already do this.

- All bonds must be lodged with the bond administrator – we already do this.

- Inspections can only be carried out a maximum 4 times a year – we already do this also



I’m attending a course next week so if there are any other changes after that I’ll let you know.

[Joe]

All bonds must be lodged with the bond administrator.. fucking bullshit.

This is just so the government can take the interest from the money held, nothing else. It's a pain in the fucking arse getting money out of the bond administrator anyway, the form is shit and if your signature doesnt look exacly the same as the one on the original form down to the pixel, they'll knock it back.

Also, do we really have to fill in the new agreements, or can it be done after the old ones have expired?

[Macca]

All bonds must be lodged with the bond administrator.. fucking bullshit.

This is just so the government can take the interest from the money held, nothing else. It's a pain in the fucking arse getting money out of the bond administrator anyway, the form is shit and if your signature doesnt look exacly the same as the one on the original form down to the pixel, they'll knock it back.

Also, do we really have to fill in the new agreements, or can it be done after the old ones have expired?

Also stops the landlords gaining interest on it. Seeing as it is just a held $ value. Maybe all interest should be paid back to the tenant when bond is released?

Plus it stops dodgey real estate agents spending the money.

[Riggs]

My Mrs also manages 150ish properties. Been hearing all about this over the last few weeks.

[LostInTheWoods]

According to her meeting yesterday, all contracts need to be resigned. Considering she is 3 months in advance on her renewals, all need to be redone, or they do not comply to consumer protection laws. Apparently there is no "grace period". The dates and rates will be the same, the contract terms will be different.

It is still being cleared up to exactly what is required, but as of yesterday, all 150 properties require new contracts to be signed by end of month.

Stupid thing is, is that if an owner puts the rent up for the end of the current contract, you can not charge the tenant the new rate until 30 days into the new contract, regardless of how much notice you give the tenant. The more retarded thing is that they didn't make it 28 days to tie in with rental periods (4 weeks exactly) so now trying to explain to tenants that they are being charged 4 weeks and 2 days at one rate, and then the new rate for 5 days + 1 week for the next fortnight is going to confuse the shit out of tenants.

Do real estate agents even earn interest on a trust account. How the hell would they consolidate that? I would have thought that they would be in interest free accounts, unless the interest is paid to a separate account, kind of the opposite to a mortgage offset account.

The frequency of Auditing means that real estate agents stealing funds is pretty rare.

Several of the law changes, especially those mentioned in Damo's managers response are standard practice anyway. However having to put locks on every window and door, and potentially security rated screens on front doors will add costs to properties.

Many affect the changes to property management, which is why people with self managed properties will need to be careful. It will add addional work required for each property, meaning that over time management rates may go up?

The break of lease fees are now significantly reduced.

Also, the feedback I got was that far more cases will go in front of the magistrate wasting the courts and PM's time. I believe this is as a result of how the contract is viewed and can be disputed more readily. It will allow tenants to breach owners more readily as well.

[Joe]

Also stops the landlords gaining interest on it. Seeing as it is just a held $ value. Maybe all interest should be paid back to the tenant when bond is released?

Plus it stops dodgey real estate agents spending the money.

When I was in the trade as an agent, we used to give the interest back to the tenants.

Now I do it privately, I hold bond money in an account that doesn't incur any interest, just to keep it simple.

[LostInTheWoods]

Yeah, she is seriously considering a career change!

It was bad enough that they are personally liable for so much.

Guy rents 60's house, gets pissed, falls through french windows, cuts himself, sues property manager successfully for 100k, seem's reasonable.

[Joe]

Do real estate agents even earn interest on a trust account. How the hell would they consolidate that? I would have thought that they would be in interest free accounts, unless the interest is paid to a separate account, kind of the opposite to a mortgage offset account.

The frequency of Auditing means that real estate agents stealing funds is pretty rare.

Yeah as above, we used to give the interest back to the tenants. Thing is, we were commercial agents so there were different laws. We just applied this to the residential tenants we had also. REBA never pulled us up on it either, and that was with a yearly audit, so it must have been okay.

[crabman]

What the caused all these changes? Pretty happy I decided not to manage my mums property, albiet in manning so at least the rental cost should weed out the type of people that are degenerates.

Makes me wonder if renovating my house to rent is even worth it, by the time I am done the tennants will have even more rights...

[Fukushima]

Makes for a lot more work for agents as well as we will in most cases processing applications when the tenant may have no intention of proceeding with it in the end.

I often give people $50-100 and fill out forms with all my personal details and referees for no particular reason.

[zxz]

about time they got rid of that completely
it used to be a weeks rent as their "let fee" but it got ruled out a few years ago, so then they made up this "option fee"

most rental applications take a week to get 'processed' (should only take 1-2 days) , which is a long time to wait to get knocked back and have to start over again

many times i was instructed by an owner to wait for a better application, but not to decline the ones pending in case that was all they get

one of the reasons i became a property manager was so that agents stopped screwing me over
once you know all the little laws for it, you would be surprised just how much they bluff over things

[LostInTheWoods]

I don't agree with having no option fee, but I don't think it should be a full weeks rent either. Especially in a market as tight as Perth, it can take time to get into a property, even as excellent candidates, let alone being average ones. Only being able to apply for one property per week is really limiting. It could work for both parties, with owners having a broader selection to choose from, but could be frustrating at the same time if option 1, 2 and 3 manage to get accepted elsewhere.

[JME]

Just charge more on the bottom line. Red tape just makes it more expensive. But you'll find the bureaucrats who push for change have no real world experience. Comes with the territory, and the rates just go up to compensate. Give 12-24 Months.

[GhostFc3s]

I have a rental property and i agree with no option fee or at least reduced, most PM pocket it anyway. Im sure there are some good property managers but the ones I have dealt with are as useless a tits on a bull. They are nothing more then a message forwarding service from tenant to landlord.

[Damo 69]

They are nothing more then 2 week delayed message forwarding service from tenant to landlord.

fixed and agree