We've put together some helpful articles and links that address some of the most common questions about property management in Queensland. If you're situation isn't covered below or is a bit more complicated, feel free to give us a call on (07) 5535 3999 for some obligation free assistance.
My tenants are breaking their lease. What are my rights as a landlord?
Under normal circumstances a tenant’s lease ends when the dates on the lease agreement are reached AND when the tenant notifies their real estate agent/landlord in writing that they will be leaving. Leases can be terminated at any time without penalty if both parties agree in writing.
If your tenant wants to break their lease and you do not agree in writing, you cannot stop them from leaving. But you do have some financial protections under the law. Tenants who break their lease are generally responsible for:
- Rent until a new suitable tenant is found
- Relet fees to the property agent plus GST
- Advertising costs plus GST
These protections help ensure that you, the landlord, are not out of pocket from the lease break.
A few important things to note:
- For added protection, it’s important that the above charges are included in the special terms of the lease at the beginning of each agreement. You should check with your property manager if these terms have been included.
- When searching for a new tenant, the advertised rent should be at the same amount that the current tenants are paying (to avoid possible legal disputes with the departing tenants).
- The above guidelines apply to all parties breaking a lease, not a change in shared tenancy.
- The above guidelines assume there have been no remedied breaches.
- Tenants breaking a fixed term lease must provide 14 days notice in writing (the approved RTA form is best to ensure all items are covered)
The above protections to not apply to periodic lease agreements. If you’re a long term investor and are certain that you’ll continue renting out your property, it’s in your best interest to make sure your tenants are on a fixed term agreement. Allowing a periodic lease could leave you with a vacant property and no compensation if the tenants leave with short notice. If you’re not sure, check with property manager and insist that a fixed term lease be signed.
If your situation is more complicated, feel free to call our office on (07) 5535 3999 for more specific guidance. Please note that every situation is different and this is not to be taken as legal advice for your specific situation.
Written by Daniel Pirotta
How Much Notice Do I Need to Give My Tenant To Move Out?
There are a lot of reasons why you might want or need to end a tenancy agreement. Every situation will depending on a few factors so we’ve illustrated a couple of the most common situations.
Scenario One: Owner Moving Back In
John owns an investment property. His personal circumstances have changed he needs to move back into his investment property as soon as possible. The tenants are good tenants. They’ve always paid their rent on time and they are taking good care of the property.
John is required to give his tenants a minimum of two months’ notice on the approved form. This applies if the tenants are on a periodic lease or a fixed term lease. If there is a fixed term lease in place, notice still must be given, BUT the tenancy only ends at the later of:
- The lease end date
- The end date of the notice period
Scenario Two: Tenants have breached their lease agreement
Janelle owns a rental property and her tenants are behind on their rent. To make matters worse, the neighbours called Janelle saying that the tenants have been having regular parties are a nuisance to the neighbourhood. Janelle is worried that there the might damage to the property from the party goers and needs the rent money to make her loan payment.
Janelle should give the tenants a Notice to Remedy Breach. Both issues (late rent & nuisance) should be listed on the notice.
- Late Rent: The tenants will have 7 days to get their rent payments up-to-date. If they fail to do this, Janelle can issue an approved Notice to Leave form. In this situation, the tenants have 7 days from the notice to leave date to vacate the property before legal action begins.
- Parties/Nuisance: If the tenants get back up-to-date on their rent, but continue to have their loud parties, then they can still be given a notice to leave because they are still in breach of their agreement. In this situation, the tenants have 14 days to vacate your property from the notice to leave is given (before legal action begins).
Side note: Trouble tenants can be reported to agencies like TICA & the National Tenancy Database. These databases help other agents and landlords avoid similar issues as reported tenants will be flagged and will have a difficult time renting from a reputable agent in the future. If you plan to report problem tenants, it’s important to note in your lease agreement and the Notice to Remedy Breach form that tenants may be reported for failure to correct the issue.
Please note that every situation is different and this is not to be taken as legal advice for your specific situation. If you’d like additional guidance, please give us a call on (07) 5535 3999.
Written by Daniel Pirotta
Can I Charge My Tenants For Water Consumption?
In Queensland, landlords can pass on the consumption portion of their water rates notice to tenants if certain conditions are met. The consumption portion of the bill includes the State Bulk Water Charge & the Water Usage Charge.
To pass these costs on:
- The property must be individually water metered
- The property must be water efficient (see below)
- The lease agreement must indicate that the tenants are responsible for water consumption.
This flow chart will help you determine if and how much you can pass on to your tenants.
Which Devices Must Be Water Efficient?
Internal cold water taps and single mixer taps installed over a hand basin, kitchen sink or laundry trough must have a maximum flow rate of 9 litres per minute. The requirements don’t apply to bath tub taps, outside garden taps or taps to washing machines or dishwashers.
Toilets require a dual flush function with the following flush volumes:
- Full Flush: 6.5 litres
- Half Flush: 3.5 litres
- Max. average flush volume of 4 litres (based on 1 full flush & 4 half flushes)
Written by Daniel Pirotta
5 Tips To Lower Your Vacancy Rate and Find Tenants Faster
Vacancy can be one of the highest ongoing costs of owning a rental property. To put things in context in the Gold Coast market:
1 Week Vacancy = 3 months management commission
That means, if your property is vacant for 4 weeks, you’ve just missed out on rent that is equal to a full year of management commission. So what can you and your agent do to keep this to a minimum? Below is a 5 step checklist to help keep the rent coming in and your vacancy down.
1. Price your property correctly: Before advertising your property for rent, do your market research. You don’t have to be the cheapest property on the market to find tenants fast, but tenants know what a reasonable rental price is.
We’ve delivered rent increases for many of our landlords and there’s a balance between what’s fair and reasonable and a high price that will leave your property vacant. What’s worse is that if you start too high and lower your price later, your listing will become stale. This means your ad will be at the bottom of the list on the listing portals. Anyone who’s actively looking for a place like yours probably won’t make it to page two of the listings which is bad news for you.
2. Advertise your property well: Once you’ve got the price right, don’t skimp on the actual ad. Make sure you have 8-12 well lit photos that give prospective tenants a good idea of what your property has to offer. Only showing the outside, or pictures of local parks and beaches leaves too much to the imagination and you won’t get as many inquiries as you should.
Make sure the description of your property is enticing, but also a true representation of your property. Don’t just write a couple of lines and be sure to highlight features that may not be obvious in the photos. Since people receive information differently, it’s best to combine paragraph format with bullet points to appeal to both audiences.
3. First Impressions: Make sure your property makes a great first impression. Lawns should be mowed and the property should be clean so prospective tenants can picture themselves living there. If your property is currently tenanted, give your tenants plenty of lead time before an inspection so they can tidy up and help you present it at it's best.
Arrive early to the inspection to open the blinds, windows and doors. This will make the property feel open and inviting when the first prospect arrives. If it’s cloudy or there's not much natural light at the time of your inspection, turn on the lights beforehand too.
4. Find Long Term Tenants: One of the best ways to reduce vacancy is to have long term tenants. Not only does this keep the rent coming in, but it reduces your advertising costs and letting fees if you have a property manager.
This shouldn’t be the only filter you use when screening an application, but it is something that should carry some weight in your decision making. Assessing how long a tenant stayed at their last property and the rent as a proportion of their income are two things you can look at to help determine if your new tenants are likely to stay long-term.
You should also make sure your property manager is treating the tenants fairly and acting on reported maintenance issues that are reasonable. The last thing you want is a tenant to leave because they don’t think you care about them or the property.
5. Process: Timing is critical when it comes to finding back-to-back tenants. You could complete steps 1-4 really well and still have a vacancy if you don’t get this part right.
This year, we’ve been able to find back-to-back tenants for over 97% of the properties we manage. We’ve found that the following process delivers the best results.
Start Early! 2 months before lease expires, contact your current tenants to see if they would like to renew their lease.
If they will be leaving arrange for the following:
- Tenants to send you appropriate notice to leave form
- Photos of the property for advertising
- Write up the copy for your ad
The ad should be placed approximately 1 month before the current tenants leave. Most tenants don’t start looking much earlier than this so you don’t want your ad to get pushed to the bottom of the list by starting too early.
Once you’re ready for inspections, make sure you send prospective tenants an application before the inspection. Make your form easy to fill out online and by hand. Waiting for the inspection to hand out applications could mean you lose 2-3 days as you wait to receive them back.
Finally, make sure you offer multiple inspection times to get the most traffic through your property. After 4:00pm works best for working tenants, but don't forget about the shift workers too. It's also best practice to have several inspections per week to capture the largest pool of tenants.
Summary: If you have a centrally located property on the Gold Coast that is fairly priced and well-presented, your vacancy rate should be no more than a few days in the current market.
If your property is vacant, chances are one of the above steps have been skipped. From studying the market extensively, it seems like the most common cause of vacancy is a failure to execute step 5 effectively. If you need help getting your property rented, please call us on (07) 5535 3999.
Written by Daniel Pirotta
My Tenants Want To Use Their Bond As Rent, Should I let Them?
Before we launch into the answer to this question, many people who write in start by saying “This may be a stupid question, but…”. I want to assure you that if you have a question, someone else is probably wondering about the same thing too. Ask away and we’ll do our best to answer them all.
Ok, on to answering this question. When leases are coming to an end, many tenants ask if they can just use up their bond for the last four weeks of their rent. The thinking is that it’s their money and there will be less paper work at the end of the lease. For some reason many tenants are also quick to announce that they are leaving the property in a better condition than when they moved in, so there should be no problem if the bond is used for rent.
If you get asked this question, you need to be ready with an answer that not only protects you, but is fair and doesn’t leave the tenant feeling like you’re a nasty landlord.
First of all, let’s start with why you shouldn’t allow this to happen. In short, the bond is one the few protections the law gives landlords. If bond is used up on rent, you’ll probably be left carrying the bag for anything else that’s left. This isn’t to say that all tenants will maliciously cause damage and cost you money, but there are situations where bond must be deducted even if the tenants were good.
Some examples are:
- Additional cleaning might be needed if something was missed by the tenants
- There may be some minor damage that needs repairing
- An outstanding water consumption bill might need to be paid
It’s always best to proactively work with good tenants on getting these things sorted out, but there are times when a tenant can’t go back to finalise things. In these situations the bond must be used to pay for the loose ends.
If the bond has been used up on rent, then it will be much harder and more stressful to wrap up the lease amicably. If you end up playing the role of debt collector, you’ll also end up with more work on your hands and you’ll be the “bad guy” even though you’re entitled to the money.
If you get asked by a tenant to use their bond for rent, a few things you can simply say are:
- "The bond will be sorted out at the end of the lease. We’ll work with you if there is anything that you need to go back and fix or clean so you can get it all back, but unfortunately the bond cannot be used for rent.”
- “The RTA holds the bond so we cannot draw on it for weekly rent payments. We need to pay our loan, council rates etc in the meantime, so we can’t wait until the end of the lease for the RTA to release the money.”
If the tenant insists on using the bond, by not paying the rent then the law is on your side. The RTA is very explicit in saying that “tenants must pay the rent on time” and this does not include using the bond as a form of payment. In this situation a breach notice can be issued and if it’s not rectified within the prescribed timeframe a Notice to Leave Form (eviction notice) can be served. These notices will hinder a tenant’s ability to rent from any reputable agent who completes thorough references checks in the future.
Good tenants generally won’t go down this path, but it’s best to what the rules are in case you’re faced with this scenario.
With good tenants a safe philosophy is to be fair to them, but don’t be unfair to yourself at the same time.
If you have any questions that you’d like answered, please write in to firstname.lastname@example.org or call (07) 5535 3999. Please note that this is not legal advice and every situation is different.
Written by Daniel Pirotta
Helpful Links For Landlords
* RTA: Landlord Rights & Obligations
* Smoke Alarm Legislation
* Smoke Alarm Responsibilities (Tenants & Owners)
* Residential Rooming & Accommodation Act 2008
* Maintenance & Repairs: who's responsible?
* Tax Depreciation
Links & calculators are provided by third party websites and Propcare One is not responsible for the content/data produced by them. We always recommend seeking independent legal and financial advise specific to your situation