Many landlords around the country are currently facing financial uncertainty. Concerns about rent payments, eviction and legalities are running high, adding to an already frustrating situation. The government has announced measures to help both landlords and tenants through these hard times, including mortgage breaks, rent payments and JobKeeper payments.

COVID-19 has impacted people from all walks of life, with both health and economy taking a hard hit. Now is the time for stability and certainty for landlords affected by the coronavirus, and at Leased, we’re here to help. We know that information is key at such important times, so here are the steps to take and the assistance you can receive.

COVID-19 Landlord financial assistance

During the current climate, it’s more important than ever to keep your tenants on side and making rent payments. We’re able to help you work on a plan of action to ensure you aren’t left with an empty rental property by helping all parties come to a satisfactory solution.

Available Options

• If your tenants are facing financial hardship, we can direct them to the right place to claim their $1,500 wage package or advise on using the Centrelink website. It’s important to remember that the above options are only available for Australian citizens. There are currently no assistance options for non-native citizens.
• If you have taken out landlord insurance, you may be eligible to receive an equivalent rent payment for a limited amount of time after 6 weeks have passed. Please refer to your insurer for advice.
• You have the ability to request a moratorium (mortgage holiday) on your monthly mortgage payments from your bank. This can help ease the financial burden for a period of several months while COVID-19 is being controlled with activity restrictions. 
• If your tenant has failed to pay rent before the pandemic and is, or was, facing a tribunal hearing, they cannot be evicted. This is a new situation that will require careful planning and evaluation to find a way forward for all involved. 

COVID-19 Tenant financial assistance

As a landlord, you’ll need to ensure that your tenants are aware of all of the options available to them. Failure to do so could see your revenue stream adversely affected. While you could do this yourself, rules and regulations are changing on an almost hourly basis. Providing the wrong information and trying to keep on top of things can cause undue stress during already stressful times. 

This is where a property manager can step in and take control. Understanding the complexities of rental laws and recent changes can make all the difference between getting paid or going short. We can make arrangements directly with your tenants on your behalf, keeping them up-to-date with all of the latest financial assistance advice.

Available Options for Employees

• Employers who are eligible will receive a fortnightly JobKeeper payment of $1,500 for each eligible employee. This payment is then paid to the employee (before tax) and topped up by the employer if the usual amount exceeds this.
• If an employee has been stood down and they currently earn more than $1,500 a fortnight,  they are entitled to a minimum fortnightly payment of $1,500 before tax.
• If an employee has been stood down and they currently earn less than $1,500 a fortnight, They will receive their regular income amount.
• Be aware that superannuation on additional wage payments is done so at the discretion of the employer. This is not mandatory.
• From April 27th 2020, those who are self-employed, a sole trader, a contract worker or a casual worker now earning less than $1,075 a fortnight due to the economic effects of COVID-19 can receive assistance.
• The partner income test has been increased to $79,000 from $48,000 a year. To be eligible, applicants need to apply before April 13th. 
• Once an application has been made, tenants should keep on top of rent payments to the best of their ability. Your property manager should be able to mediate and provide a plan of action for those who are struggling until payments kick in.

Current Position on Eviction

While it can be frustrating when rent payments are missed, the current situation across the country has led to new laws being put into place. Communication is vital to ensure that any issues are dealt with swiftly.

Landlords should be aware of the following:

• Tenancy agreements across the board are now protected with a temporary moratorium of six months against eviction for non-payment of rent.
• Both tenant and landlord should try to come up with a mutual agreement. Your property manager can deal with this on your behalf.
• Tenants have the ability to terminate their lease or tenancy agreement if facing financial hardship. Preventing this from happening is and may require mediation to resolve.
• Those who are not impacted by COVID-19 are expected to honour the terms of their lease or tenancy agreement. This pertains to both landlord and tenant.

Short-term rental options

Airbnb has provided full refunds for stays booked in up until April 14th, 2020. This is likely to be extended, depending on the severity of travel restrictions and new temporary measures that make staying in short-term rentals illegal until further notice. 

If you currently operate private short-term accommodation, protecting your investment can be achieved with a few short measures. If you choose to remain in the short-term rental market, you could be facing zero occupancies and income for the foreseeable future.

Available Options

• Switch your rentals from short-term to long-term leases. With job uncertainty, reduced income and a potential financial crisis looming, vacations and leisure travel will likely take a hard hit over the coming months.
• Avoid listing any properties as ‘work away from home’ or ‘isolation vacation packages’. Doing so puts you at risk of a hefty fine or imprisonment. you can continue to advertise, but the property must remain empty until further notice.
• As experienced property managers, we are able to help you find suitable tenants, deal with legalities, arrange viewings and much more. As short-term rentals are typically furnished, you could achieve higher rental prices or put furniture in storage and rent as unfurnished.
• Once you have long-term tenants in place, you will be guaranteed of consistent income. This income will not be affected by seasonality, economic constraints or future travel restrictions.

How Leased can help

Our team of highly experienced property managers are ready to step up to the mark and help see landlords and tenants through this testing situation. With tensions running high, it’s important to use the right approach to avoid any confrontations and potential legal action at a later date.

We’re able to provide current and up-to-date help and assistance, ensuring landlords face as few issues as possible. At Leased, we take care of our customers, providing them with the certainty they need, now and we’ll into the future.

In New South Wales, the government has advised that it’s currently illegal for anyone to stay in short-term accommodation, such as Airbnb, without having a lawful or valid reason.

According to the new regulations laid out to prevent further spread of COVID-19 in Australia, nobody should be staying in a property other than their own permanent residence. Anyone found breaking these emergency measures faces fines up to $11,000 or six months imprisonment.

The advice has been made clear. Stay in your home. Now is not the time to visit family and friends, travel or to go on vacation. Many short-term letting agents have tried to bypass these restrictions by advertising properties as ‘working from home bases’ and ‘self-isolation packages’. However, these are now no longer classed as a valid reason and have been clamped down on.

By-laws are also expected to come into force on April 10th prohibiting the short term rental of a property that isn’t the primary place of residence of the host.

What does this mean for short-term rentals?

In the simplest terms, landlords who focus on short-term rental properties are facing financial uncertainty. While advertising is still perfectly legal, allowing guests to stay is not. Nobody knows how long these measures will be in place, meaning revenue and income will come to a grinding halt.

Of course, everyday running costs, maintenance and bills still need to be covered. This could place an unnecessary financial strain on property owners who are already struggling to survive.

What is the solution?

Shifting away from short-term rentals to long-term rentals is one way to protect your investment. While it’s true that renting out your property as an Airbnb or holiday home can attract a higher daily rate, occupancy levels are now at an all-time low and are expected to be so for many months, if not years to come.

The coronavirus pandemic has revealed the fragility of the short-term market, showing how quickly things can go wrong. By moving to long-term leases, you’re guaranteed a steady and regular income throughout the year. Looking away from the current situation, short-term rentals are also seasonally dependent, resulting in low occupancy for many months of the year.

As a property owner, investment security is vital. Having a beautiful property standing empty can be bad for your balance sheets – and the economy.

Long-term rentals vs. short-term rentals

To help you get a clearer picture of how switching to long term rentals can be the best choice to protect your investment, here a few comparisons between the two. 

Short-term rental property

First and foremost, there is no guaranteed income for short-term lets. Seasonality, force majeure and economic downturns can all have a negative impact on occupancy. You could spend more trying to find guests than you receive, making your investment work against you instead of for you.

Excessive maintenance and upgrades, including providing a fully furnished property with modern amenities, decorations and cleaning can eat into your profit margins. Poorly maintained properties are likely to attract negative reviews, which could result in decreased bookings.

Management issues are also common. Coordinating gardeners, cleaners, maintenance, check-in and check-out, bookings and availability, guest complaints, refunds and more can eat into your time and revenue – especially if you don’t have the right support or tools on hand.

Lastly, competition in the surrounding area can be fierce. With the rise of Airbnb and similar property let’s, there will often be more properties than travellers, resulting in reduced supply and demand. Unless you have an amazing property at knockdown rates, it can be hard to succeed.

Long-term rental property

While short term rental properties don’t offer consistent income, long-term leases do. You are able to set the rental amount to cover all of your associated expenses, plus extra as disposable income. 

Another benefit is that the majority of tenants take on unfurnished rental properties. This means that you don’t need to provide modern and expensive furniture, decorations and amenities. Of course, the property needs to be in a habitable condition, but other than that, your initial outlay is low.

Charging higher deposits provides you with an additional layer of security. Not only does it safeguard against damage and destruction of the property, it also covers any missed and unpaid rent payments. With short-term lets, the small deposit may only provide protection against gentle damage, costing you more in the long term.

Fewer people in and out is also a huge bonus. The more turnover a property has, the more likely it is to need expensive maintenance, repairs and upgrades. You are able to stipulate who is responsible for general upkeep in the tenancy agreement, reducing the time and cost spent on the property.

The issue some long-term landlords face is finding reliable tenants and dealing with legalities, however, that is where a good property manager comes in.

Why use a property manager?

Property management services are hugely useful at the best of times, ensuring you have a stress-free experience from start to end. But it’s at times like these where you could truly benefit from the knowledge and expertise of a leading property manager. 

The current situation is evolving at a rapid pace, with new laws, rules and regulations coming into force on an almost daily basis. 

A property manager help with:

• Determining how much your property should be marketed for to prospective tenants.
• Recommending property improvements to make it more appealing to tenants.
• Verify the suitability of applicants with industry tools to check rental history and references.
• Taking care of maintenance issues in a timely manner to prevent any issues from arising.
• Make sure that any strata levies, rates and insurance costs are paid on time.
• Perform regular inspections to ensure the tenant is taking care of your investment
• Rectify any payment issues and provide representation at any Residential Tenancies Tribunals.
• Advertise and promote your rental property in the best possible way.
• Keep on top of legal issues and current laws and legislations as per your governing state.

The easiest way to switch

While short-term property rentals can typically attract higher daily rates, running costs, maintenance, taxes and low occupancy can cost you dearly both long and short-term. With the current situation making it illegal to rent out or stay in private short-term accommodation, now is the time to take a new approach.

Forget about the complexities of entering the long-term property rental market alone. At Leased, we can take care of everything on your behalf, giving you maximum peace of mind during these uncertain times. Our job is to make your property work for you, not against you. Make the switch today and discover property management done right. 

As of March 23rd 2020, changes to current NSW residential tenancy laws came into effect. But what exactly do the new Tenancy laws mean for NSW landlords? Whether you’re a landlord or a tenant, understanding how the recent changes will affect you is important.

Changes to the NSW Residential Tenancies Regulation 2019 and the NSW Residential Tenancies Amendment Act 2018 will have an impact on rental increases, breaking leases and tenancy termination.

Here is a summary of all the main changes landlords and tenants should be aware of, regardless of whether you use a property manager or not.

Changes to NSW Rent Increases

Rent increases are limited to one increase during every 12 month period for ongoing periodic agreements. If the agreement is fixed-term and for less than two years, landlords no longer need to provide 60 days written notice. However, any increase must be set out in the agreement for the written notice waiver to be valid.

Changes to Fixed Utility Providers

Landlords or property managers are prohibited from including terms that make it mandatory for tenants to use specific utility providers if the landlord is not restricted to using any one provider. This change applies to all residential tenancy agreements dated from March 23rd 2020 onwards. Tenants are free to choose any provider they deem fit and cannot be forced to take on the landlords ‘preferred’ utility providers.

Tenant Breaking Fixed Term Tenancy Agreement

Tenants are well within their rights to break their lease early, with a fixed breaking fee reflecting the total length of the fixed-term lease that has expired. This will take effect on all leases signed after March 23rd 2020.

• Tenants will pay a break fee equivalent to one week’s rent for fixed-term agreements that have satisfied 75% or more of their lease duration.
• Tenants will pay a break fee equivalent to two week’s rent for fixed-term agreements that have satisfied at least 50% of the lease duration but less than 75% of it.
• Tenants will pay a break fee equivalent to three week’s rent for fixed-term agreements that have satisfied at least 25% of the lease duration but less than 50% of it.
• Tenants will pay a break fee equivalent to four week’s rent for fixed-term agreements that have satisfied less than 25% of the lease duration.

Tenant Making Minor Alterations to Premises

Tenants are able to make minor renovations, additions and alterations if the residential tenancy agreement permits it or they have the landlord’s written consent. Should the tenant make a request, the landlord or property manager cannot withhold consent unreasonably.

Unless the landlord or property manager agrees otherwise, any additions, renovations, alterations or fixture installations must be paid for by the tenant. For properties that are listed as heritage items or on the loose-fill asbestos insulation register, the changes to tenancy laws do not apply.

The following list of minor additions, renovations, alterations and fixture installations still require the tenant to get written permission from the landlord or property manager. 

However, if the property is not exempted due to being a heritage item or on the loose-fill asbestos insulation register, placing conditions on consent or refusing consent to the tenant will be seen as unreasonable.

Minor Additions, Renovations, Alterations & Fixtures

• Installing window safety devices, such as window locks to improve the safety of children residing in the property.
• Installing child safety gates within the property, such as on doorways and stairs.
• Attaching child-proof latches to outdoor gates of single dwellings.
• Affixing furniture to non-tiled walls for safety purposes.
• Affixing fly screen to windows on the property.
• Applying shatter-resistant film to glass doors and windows.
• Replacing or installing internal window coverings such as removable blinds and curtains and installing cord guides and cleats.
• Installing lever-style taps and handheld showerheads for disabled or elderly occupants.
• Planting shrubs, herbs, flowers and vegetables in the garden if existing vegetation does not need to be removed and they don’t grow more than two meters tall.
• Inserting or replacing screws, nails and hooks for hanging picture frames, paintings and similar items.
• Installing removable wireless security cameras outdoors.
• Installing cable internet connections or phone lines.

The landlord or property manager can request that the installation of phone lines, internet connections, lever-style taps and hand-held showerheads be carried out by a qualified person.

Tenant Damage and Modifications

Except for fair wear and tear, tenants are responsible for leaving the property in the same condition as they found it when their residential tenancy agreement started. This includes ensuring any renovations, additions or alterations are removed at the end of the lease. They are also responsible for repairing any damage caused to the property.

Any fixtures the tenant has installed can also be removed if they wish to do so. However, should any damage occur as a result of removing fixtures, the tenant is obligated to either repair or compensate the landlord. Any fixtures that have been paid for by the landlord cannot be removed by the tenant.

Should the tenant fail to make any repairs or any repairs are not made to a satisfactory standard, landlords can seek compensation by applying to the NSW Civil and Administrative Tribunal. This is especially true should the landlord or property manager face hardship in letting the premises to future tenants due to the nature of disrepair or damage.

Landlord Smoke Alarm Responsibility

Landlords and property managers must ensure that smoke alarms are installed and in good working order. Failure to do so will result in penalties. Landlords must:

• Perform annual smoke alarm checks and verify that they are working correctly.
• Replace removable batteries either annually or as per the smoke alarm manufacturer instructions.
• Replace or repair smoke alarms that are not working within two days of becoming aware of the fact.
• Replace smoke alarms with new ones within 10 years of the date of manufacture; or earlier if specified by the manufacturer.

If a tenant becomes aware of a smoke alarm that needs replacement or repair, they need to immediately notify the property manager or landlord. This includes the need to replace a battery. Should the tenant replace the battery themselves, they must notify the property manager or landlord upon completion.

When it comes to replacing or repairing smoke alarms, tenants can only do so if the landlord or property manager fails to repair or replace the smoke alarm within two days of being notified. Tenants should be reimbursed for the cost of replacement or repair when providing appropriate evidence.

*Note – social housing tenants are not covered by these provisions.

Landlord or Property Manager Information Disclosure

Property managers and landlords must not conceal material facts or make misleading or false statements to prospective tenants before they sign a tenancy agreement. 

Before any agreement is signed, the landlord or property manager must also tell the tenant of any prepared sales contracts, intentions of selling the property, or if any court action is being taken to repossess the property.

The complete list of material facts can be found here. The new material facts that have been added include:

• Landlord or property manager disclosing whether the property has been used to grow or manufacture prohibited drugs in the past two years.
• Landlord or property manager disclosing whether the building has been issued a fire safety or building product the rectification order for external combustible cladding.
• Landlords or property managers must disclose whether the property is part of a strata scheme with scheduled major repairs or rectification work to be done on the common property during the fixed-term agreement.

Seven Standards of Fit for Habitation

To be able to legally rent out a property to tenants, landlords and property managers must ensure the property is fit for habitation. Over the years, the ambiguous nature of these requirements has often led to disputes. 

To help clear up any ambiguity and clarify what fit for habitation is considered to be, the following habitation requirements have been introduced. it’s important to note that all rental properties must meet these minimum requirements as of March 23rd 2020.

1. The property must be structurally sound.
2. The property must have adequate ventilation.
3. The property must have adequate drainage and plumbing.
4. The property must contain private bathroom facilities, including bathing and toilet facilities.
5. The rental property must have adequate artificial or natural lighting in all rooms except for garages and storage rooms.
6. There must be a connected water supply service or infrastructure for the supply of cold and hot water for cleaning, washing and drinking.
7. Must have a gas and electric supply with adequate gas or electricity outlets for appliances, heating and lighting.

Make the Change – Get Leased

Keeping on top of current rental property laws, regulations and codes of practice can be challenging for many landlords. If you have any questions regarding the recent changes to NSW rental laws and are considering letting your property, contact Leased today.

Know exactly where you stand when it comes to your tenants and landlord rights when letting a property through Leased. Secure your investment and enjoy knowing your rights are well protected!

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Discover the difference. Make the change and switch to Leased today.

The content of this blog post is for reference use only. For a full list of changes to NSW property rental laws, please check the NSW fair trading website for more.