Existing landlords

Setting a rental price is a precise science - too high, and the property won't rent or may take a long time to find a tenant. Too low, and you reduce the return on your investment and may not attract the right target market. We regularly consider the following important factors when setting rent baselines:

• Comparable properties on the market or recently rented
• Length of lease
• Time of year
• Type of tenant
• Owner’s opinion

Your rent is paid to you by electronic funds transfer into your nominated account at the end of each month.

Tenancy applications are only approved when we are confident that the rent will be paid on time and the tenants can look after the property. Occasionally changes in circumstances can put some tenants behind with their rental payments. Independent has a Zero Tolerance Policy for rent arrears. This is outlined at the commencement of the tenancy. Independent’s tenancy arrears are monitored on a daily basis.

Independent Property Management will keep the lessor notified of any late rental payments and we will only issue termination notices after discussing the situation with you.

As the property owner, you pay for:

• Maintenance (as required)
• General rates and land tax (quarterly or annually)
• Water supply (if a freestanding house, your tenant reimburses you for their consumption) (quarterly)
• Strata levies (if applicable) (quarterly)
• Smoke alarm compliance (annually)
• Insurance (landlords and where applicable - building,
  both annually)

We can pay these on your behalf from the rent if you want, but if you opt to pay them yourself you need to notify your Strata Manager and the Revenue Office of your postal address and the date your property is rented from.

Unless otherwise agreed, any additional costs relating directly to tenant use are paid for by the tenant, eg: electricity, gas, internet or Foxtel.

Property set up costs include installing blinds/curtains, a depreciation schedule, and landlords (and if applicable building) insurance. Our upfront costs technically aren’t upfront. Your first payment to us is deducted from the rent and covers the advertising/marketing, letting fee and recording of the inventory and condition report, along with an optional tenant gift. If the property is brand new, you may need to pay for initial utility connections (e.g. power, phone etc)

The ongoing management fee is detailed in your Agreement with us and is a percentage of the collected rent. That means if the property is vacant you don’t pay a management fee. Other ongoing costs are those mentioned above: maintenance as required, land tax, general rates, strata levies (where applicable), water supply, renewal of insurances and smoke alarm compliance.

We transfer rental income (less our fees and payment of any bills) to your nominated bank account at the end of each month and its safe to say funds should be in your account by the 3rd of the following month. Generally, you won’t receive any rental income for the first month due to the setup costs being deducted.

There will be a letting fee and marketing/advertising fee. This may be covered by the penalty costs your tenant pays for breaching their agreement.

Prospective tenants must view the property or have someone view it on their behalf. 100 points of ID is also required. We establish two important things for you - that the applicant can afford to pay the rent and that they will care for the property. If we are satisfied the prospective tenant can do this, we will present a summary of the application to you for your consideration and approval

It depends on the season, the local real estate market, and the property itself. Canberra has quite a seasonal market so during winter time we see tenant enquiry slow and over November - February we see a high demand for rentals across Canberra.

If you prepare the property, present it well and set the asking rent in line with the market, the property will rent. In the current market it's taking about three weeks on average to find tenants for unfurnished property.

Firstly, we do this for you! What we need to know is that they can afford the rent (no more than 30% of their income should go towards rental payments) and that they can care for the property (which is why we check previous rental history).

You won’t actually see any application. We’ll shortlist applicants after completing the necessary checks and undertaking our due diligence. We’ll talk you through a summary of applications that we’ve qualified as suitable based on the information they’ve provided us. Any applicants with poor references or unreliable ability to pay the rent, we will not bring forward to you.

As the property owner, you have the final say on who moves in. It’s common for people to apply with pets (often with comprehensive pet references!), so by flatly refusing any, you can limit your tenant choices, but ultimately you have to be comfortable with the decision. Be sure if you accept pets that your landlord’s insurance covers pet damage.

Again, it’s your property, so your choice. In lieu of rental history, we can ask for character references or a parent to be a guarantor.

It’s up to you – we’ll never tell an applicant the specific reason why they’ve not been approved; we simply let them know that you’ve opted to go with a different application.

You employ us to do this for you – we’re seasoned negotiators and constantly working to get the best outcome for you. Any direct conversations with a prospective tenant can cause problems down the track if they claim you have made any guarantees or promises. Let us know your T&C’s and we’ll do the rest.

Current legislation dictates that we cannot lodge more than 4 week’s rent for the bond.

We won’t put forward any application that raises concerns. Some applications may include pets, lower than advertised rental rate offers, posting clauses or shorter/longer tenancy terms. Whether or not you accept these terms is completely up to you and we can talk you through the pros and cons of each scenario.

The highest rental offer does not necessarily come from the best applicant. Difficult tenants may offer more money to secure properties because their rental references may not be as strong (or are omitted).

Although they may be approved, until the Tenancy Agreement is signed, they aren’t legally bound to the tenancy, so an approved applicant may fall through. Generally, tenants will apply for multiple properties and will choose their favourite of any they are approved for. As such, we always try to secure the tenancy urgently after they are approved.

We can accept offers for more rent in advance, but we cannot ask for it. If a tenant offers 12 weeks’ rent up front and turns up with only 2 weeks, we must accept it and cannot legally ask for the other 10 weeks.

Yes, but sometimes when two or more applicants are approved, only one will be available to sign the lease – we get lots of tenants moving from interstate as an example. In these cases, we’ll still lock in the tenancy with one tenant and have additional tenants sign the documentation at a later date. All approved tenants will still be listed on the agreement up front, but those who haven’t yet signed are listed as occupants.

We always try to encourage your tenant to sign a renewal for your peace of mind, but in the ACT, the legislation states we cannot enforce that they do. Your tenant can opt to remain in a periodic tenancy which continues until either party gives notice to cease the agreement. In a periodic tenancy, the rent can still be reviewed every 12 months.

We request that the tenant reports all maintenance issues to Independent Property Management in writing (either via email or through the Sorted ap). We will contact you for authorisation to conduct the repairs and for any larger maintenance items quotes will be obtained and discussed with you prior to organising the work. Urgent repairs, regardless of the cost, may be required to be acted upon immediately as legislated in the Residential Tenancies ACT 1997. Of course, we will inform you if this occurs.

Inspections of your property are conducted twice a year. This is to ensure that the tenant is looking after the property as stipulated in the Tenancy Agreement. Inspections are also conducted to ascertain any repairs and maintenance that may be necessary.

A maintenance issue is when something is not working as it’s intended e.g. appliances such as dishwashers or heaters, also things like leaking taps, doors not latching, blocked drains, etc. There’s also general property upkeep, e.g. worn carpets, aged paint, failed hot water systems etc.

Your tenant is responsible for replacing light bulbs and batteries where safe to do so, as well as maintaining the garden, including mowing and weeding. All other maintenance and repair work is your responsibility.

Once your tenant has submitted a maintenance request, you have 4 weeks from the time of reporting to attend to it, unless it is an urgent repair, in which case we recommend you attend to it ASAP.

Urgent Repairs as set out in the Residential Tenancies Act 1997, as follows:

• A burst water system
• A blocked or broken lavatory system
• A serious roof leak
• A gas leak
• A dangerous electrical fault
• Flooding or serious food damage
• Serious storm or fire damage
• A failure of gas, electricity or water supply to the premises
• The failure of a refrigerator supplied with the premises
• A failure or breakdown of any service on the premises essential for hot water, cooking, cooling, heating or laundering
• A fault or damage that causes the residential premises to be unsafe or insecure
• A fault or damage likely to cause injury to person or property
• A serious fault in any door, staircase, lift or other common area which inhibits or unduly inconveniences the tenant in gaining access to and use of the premises

If it’s within office hours, we’ll contact you for your approval to arrange a repair. If we can’t make contact within 12 hours, we‘ll arrange a repair up to the maximum value as outlined in your contract for urgent repairs. If it’s after hours, your tenant can call our emergency repairs line and arrange work up to 5% of the annual rent.

Yes – it’s in your best interest for three main reasons: tenant safety, fulfilling your legal obligation and ensuring your property is not damaged which could potentially void your insurance for not actioning repairs promptly.

Gathering multiple quotes or deliberating for too long can delay the work being done, but we can provide estimates of the work to be undertaken using our recommended tradespeople. This gives us the best chance of completion within the 4 weeks. If repairs exceed this timeframe, the tenant can issue a notice to remedy or may seek compensation.

We use the inventory and condition report your tenant completes at the commencement of the tenancy as a guide to compare when they vacate, taking into account fair wear and tear. If the damage is the tenant’s fault, whether malicious or accidental, we will ask them to pay for the repairs and often this will be claimed from their bond.

Fair wear and tear is the expected deterioration of the property from both natural forces (wind, rain, sun etc.) and normal, day-to-day use by the tenants.

Different policies cover different things, but we suggest your policy include cover for the following, at the very least:

• Legal liability
• Loss of rent
• Damage to building and contents, including fixtures and fittings (both malicious/deliberate and accidental)
• Tax audit
• Damage caused by pets

Most importantly, ensure your policy includes cover for periodic tenancies, as some don’t (and it’s usually in the small print!).

We ask the tenant to supply their intention to vacate in writing and the tenant can give notice for a number of different circumstances:

• If they are in a 'Periodic' Residential Tenancy Agreement they are required to give 21 days' written notice prior to the expiration of your agreement of their intention to vacate.
• If they are in a 'Fixed Term' Residential Tenancy Agreement they are required to give 21 days' written notice prior to the expiration of the agreement of their intention to vacate. This is a breach of agreement as it’s prior to the end of the term and as such we ask them to contact the property manager immediately.

Your tenant may be required to either:

• Continue paying rent until either a new tenant is found or the fixed term period ends (whichever comes first) and pay you an additional week of rent as compensation to cover advertising and reletting costs; or
• If there is a specific clause in your Tenancy Agreement, they will be required to pay a breach cost of 6 weeks’ rent when the breach occurs within the first half of the fixed term period, or 4 weeks’ rent when the breach occurs within the second half of the fixed term.

In these instances, you need to mitigate the tenant’s loss, which means advertising the property ASAP at market rate rent.

We’ll start advertising your property around 4 weeks before your tenant vacates. We use professional photography, advertise on Allhomes, Domain and our website, and prepare a fact sheet for your property to hand out at exhibitions.

Unless we have photos on file from a previous vacancy, we don’t take photos of the tenants’ belongings – they often feel it’s an invasion of their privacy and it can mean the property is not presented in the best light. If we’re still advertising once the tenant vacates, we’ll arrange for internal photos and update the ads then.

If your property is still tenanted during the advertising period, the leasing consultant will hold 1-2 exhibitions a week, depending on the tenant allowing access. If the property is vacant or the tenant is breaching, the leasing consultant will always try to conduct 2 exhibitions a week. You will hear from your Property Manager on Mondays with feedback from the open homes.

Fair wear and tear is the expected deterioration of the property from both natural forces (wind, rain, sun etc.) and normal, day-to-day use by the tenants.

The tenants are required to return your property in substantially the same condition as per the inventory and condition report, signed at the start of their tenancy (fair wear and tear considered). Our policy states they also need to have the carpets professionally steam-cleaned and provide a receipt.

Absolutely. When your Property Manager notifies you that your tenant is vacating, let them know if you’d like to attend, so that they can arrange a time with you.

We schedule a reinspection a day or two after the initial vacate after giving the tenant the opportunity to rectify the issues, depending on what it is (e.g. cleaning, damage) found at the final inspection. Your Property Manager will contact you to advise of the outcome after the reinspection.

The invoice amount will initially need to be taken out of your rental income. Once the bond refund has been processed (this can take 4-8 weeks), the amount will be reimbursed to your account at the end of that month.

Landlord’s insurance will generally cover this, so we highly recommend you have a comprehensive policy in place. If you’re not insured already, be sure to get a policy that also covers periodic tenancies – a must-have in the ACT!

It depends on what your tenancy agreement says.

A tenancy agreement can impose a requirement that the tenant must seek the landlord’s consent before keeping a animal. If that requirement is in the agreement, the tenant must comply with it and seek consent before keeping a animal on the property.

If the tenancy agreement does not have a provision about animals, the tenant may have a animal without seeking the permission of the landlord.

No. The tenancy agreement may only state that the tenant must seek the landlord’s consent before keeping an animal.

If required under the tenancy agreement, the tenant must request consent in writing. This could be done via email or letter. If you do not respond within 14 days of receiving the request, you are taken to have consented.

You may only refuse consent for a animal with the approval of the ACT Civil and Administrative Tribunal. The Tribunal may approve the refusal if satisfied that any of the following apply:

• The property is unsuitable to keep the animal (e.g. a large dog
  in a small apartment)
• Keeping the animal would result in unreasonable damage to
  the property
• Keeping the animal on the property would be an
  unacceptable risk to public health safety
• You would suffer significant hardship
• Keeping the animal would be contrary to law

Yes.

If the condition is reasonable and relates to the number of animals that may be kept on the property, or the cleaning or maintenance of the property, you do not require the Tribunal’s approval.

If you want to impose other conditions, you must seek the
prior approval of the Tribunal.

If you impose a condition that the tenant disagrees with, they
must apply to the Tribunal to resolve the dispute.

Yes. The Residential Tenancy Act 1997 makes it clear that you cannot request:

• An ‘animal bond’
• An increase in the bond over the capped amount of the first
  four weeks of rent payable
• More frequent inspections than would otherwise be allowed

When you advertise your rental property, you must declare that the tenant will be required to seek their consent to keep an animal - if that’s the case, of course. If you have prior approval from the Tribunal to impose a condition on consent, you must also state this.

These advertising requirements are intended to provide potential tenants with enough information that they can decide whether to apply for the property. You can be fined if you fail to state them in the advertising.

A tenant is required to comply with their requirements under both the Residential Tenancy Act 1997 and under strata law (the Unit Titles (Management) Act 2011). Under strata law, the owners corporation’s consent is required to keep a animal. Owners corporations must not unreasonably withhold their consent.

The new laws do not affect the protections given to people who rely on assistance animals. The Discrimination Act 1991 makes it unlawful for landlords to discriminate against a tenant who has a disability, which includes their reliance on an assistance animal.

A residential tenancy agreement may include a ‘break lease clause’, that requires the tenant to pay a fee (the ‘break lease fee’) if they want to end the tenancy earlier than the fixed term end date.

The break lease fee varies depending upon the terms of the tenancy agreement and how much time is left on the agreement. If your agreement is for three years or less, the break lease fee is:

• Six weeks rent if the tenancy is less than halfway through the fixed term
• Four weeks rent if the tenancy is more than halfway through the fixed term

e.g. If a lease is signed on 1 January and the tenant breaks the lease in June, they will owe you an amount equal to six weeks rent. If they break the lease in July, they will owe four weeks.

The break lease fee is reduced if a new residential tenancy agreement is signed within a ‘defined period’. The defined period aligns with the break lease fee and is:

• Six weeks if the tenancy is less than halfway through the fixed term
• Four weeks if the tenancy is more than halfway through the fixed term

If a new tenant is found within this time period, the break lease fee will be the sum of the original break lease fee MINUS the rent payable by the new tenant PLUS your reasonable costs of advertising and reletting.

Costs of advertising and reletting are capped at one week’s rent if the tenancy is less than halfway through the fixed term. Two-thirds of one week’s rent if the tenancy is more than halfway through the fixed term

If your actual costs are less than this amount, you can only claim the costs incurred.

Sure.

Laura is a landlord. Trevor is her tenant. They sign a tenancy agreement on 1 January, with a weekly rent of $580. Trevor then accepts an overseas job and gives notice to Laura that he will vacate on 20 June.

Laura places an ad online and it costs her $399. She finds a new tenant, Nova, who will move in 16 days after 20 June (6 July). Laura does not increase the rent, so Nova will pay the same rent as Trevor did.

Did Laura enter into the tenancy agreement with Nova during the ‘defined period’?
Yes. Trevor ended the tenancy less than half way through the agreement. This means that the ‘defined period’ was six weeks, beginning on 21 June and ending on 1 August. Nova’s agreement commenced on 6 July, which is within the defined period.

What fee is payable by Trevor?
Trevor will pay six weeks rent minus the rent paid by Nova within the defined period. He will also pay the reasonable cost of advertising and reletting the property, up to the defined cost limit.

What is the defined cost limit for reasonable costs of advertising and reletting?
Trevor ended the tenancy less than halfway through the fixed term the agreement, so the defined cost limit is equal to one week of rent: $580. But Laura only spent $399, so Trevor will pay $399 and not the full amount of $580.

How much is Trevor’s break lease fee?
$1,642 total, the breakdown being: $3,480 (six weeks rent) -
$2,237 (rent paid by Nova) = $1,243 + $399 (reasonable costs of advertising and reletting) = $1,642 as the break lease fee.

No. If you sign an agreement with a new tenant during the defined period, the break lease fee is limited to the amount of the original break lease fee, less any rent paid by the new tenant, plus the cost of marketing the property (up to the capped amount).

If you don’t find a new tenant during the defined period, you receive the full original break lease fee instead, but no additional amounts for marketing.

You can’t increase the rent during the fixed term. The exception to this is if it is set out in the agreement that you will do so, and by how much. Otherwise, you’ll have to wait until the fixed term is finished and renegotiate a new agreement with higher rent.

If your tenant is on a periodic tenancy, you can increase the rent at 12 month intervals but not more frequently.

By law, the tenants are not obligated to sign another fixed term agreement, however the rent can still be increased regardless of whether another fixed term agreement is signed.

If an increase is permitted under your tenancy agreement, it is allowed if it is not ‘excessive’. This means that it is not more than the ‘prescribed amount’ outlined in the legislation.

The prescribed amount is 110% of the percentage increase in the rents component of the housing group of the Consumer Price Index (CPI) for Canberra.

Rent increase: example

1. Last date of rental increase: June 2018
2. CPI report for rents component for Canberra for June 2018: 104.0
3. CPI report for rents component for Canberra for June 2019: 107.3
4. 107.3 – 104.0 = 3.3.
5. 3.3 / 104.0 = 3.17%
6. 3.17 + (3.17/10) = 3.49%.
7. Therefore, the prescribed amount is an increase of 3.49%.

So if the rent was $500 per week, you can increase by 3.49%, being $17.45.

You can increase the rent by more than the prescribed amount if any of the following apply:

• The residential tenancy agreement permits you to increase the rent by the amount
• The tenant agrees in writing to the increase
• You obtain the approval of the ACT Civil and Administrative Tribunal

If you wish to increase the rent you must give eight weeks notice of the increase in writing. The notice must state:

• The amount of the proposed increase
• That the increase is more than the prescribed amount
• That if the tenant does not agree to the increase, you will need approval from the Tribunal to make the proposed increase

Modifications are changes to the rental property. There are two categories of modifications: special modifications and general modifications.

You can only refuse consent for special modifications with the consent of the Tribunal.

You can refuse consent for general modifications without the consent of the Tribunal, but only if the refusal is reasonable.

Special modifications fall into two sub categories: minor modifications and modifications for certain defined reasons.

Minor modifications are modifications that can be removed or undone so that the property is restored to substantially the same condition as it was in at the commencement of the tenancy, fair wear and tear excepted.

Examples of minor modifications include:

• Putting up picture hooks
• Installing a bathroom shelf
• Affixing blinds to a window
• Planting a herb garden

Modifications for defined reasons are modifications made:

• For the safety of people on the property (e.g. furniture anchors or child safety gates)
• To assist a tenant who has a disability (e.g. access ramps, safety rails) – the tenant must provide a written recommendation of a health practitioner in support of their request
• To improve the energy efficiency of the property
• To allow access to telecommunication services or
• For the security of the property or people on the property (e.g. deadlocks or alarms).

General modifications are any modification other than a special modification.

This depends on the type of modification and your reason for withholding consent.

For special modifications, the Tribunal may make an order permitting the landlord to refuse consent if:

• You would suffer significant hardship if the modification were made
• The special modification would be contrary to law
• The special modification is likely to require modifications to other residential properties or common areas (e.g. in apartment buildings)
• The special modification would result in additional maintenance costs for you.

The Tribunal will consider the matter fairly taking into account the views of both parties.

The below is a helpful guide:

Special modification: Minor modification or defined reason modification

• When can you refuse consent? - Only with approval from the Tribunal
• How should approval be sought? - You must apply to the Tribunal for approval to refuse consent. If the tenant makes a written request for modification and the landlord does not respond within 14 days, the landlord is taken to have consented.

General modification

• When can you refuse consent? - When the refusal is reasonable
• How should approval be sought? - You cannot unreasonably withhold consent. If the tenant believes that refusal is unreasonable, the tenant must apply to the Tribunal for approval.

Yes. For both general and special modifications, you can consent only if certain conditions are met. These might include:

• The proposed modification to be done in a stated way to minimise damage to the property
• That a qualified tradesperson must undertake the modification
• That a qualified tradesperson must do the restoration at the end of the tenancy.

At the end of the tenancy, the tenant is responsible for restoring the property to substantially the same condition it was at the commencement of the tenancy (fair wear and tear excepted). This includes if a tenant:

• Paints a wall, they must paint it back to the original colour
• Secures a bookshelf to the wall, this must be removed and the wall patched up
• Installs handrails for mobility, these must be removed
• Installs an alarm system, they have to remove it

The only exception to this is if the tenant and landlord agree that the modification should remain in place. This is common where the modification improves the property; for example, security locks or energy efficient improvements.

It is not sufficient for the tenant to argue that their modification improved the property and therefore they don’t have to remove it. Both parties must agree.

The tenant. This is the case even if the modification improves the property.

However, you may come to an agreement with the tenant that you will share the cost if they agree to leave the improvement in place at the end of the tenancy. This can be mutually beneficial if, say, the tenant wants to affix blinds to the front window or install security locks.

We recommend all Landlords take out an appropriate landlord insurance policy. Landlord Insurance may cover you in an event of a tenant not paying the rent, vacating the property early, malicious damage or severe neglect, as well as public liability and contents insurance eg. floor coverings and curtains.

We recommend a comprehensive landlord’s insurance policy, so that damages can be claimed and your risk mitigated. Ensure your insurance provider covers periodic tenancy, as some don’t; in the ACT, this is a must-have. If your investment property is a freestanding house or townhouse, you’ll also need to take out building insurance. Apartments are usually covered by Strata building insurance, but if you’re unsure, it’s worth double-checking.