The following information and suggestions have been prepared by the South Sydney Realty Property Management Team to inform you of your responsibilities as a Landlord

As a Landlord, what are my responsibilities?
Every property needs regular maintenance and repairs. It’s the owner’s responsibility to ensure that their rental property is safe and properly maintained. The property must be safe at both the start and throughout the tenancy. Proper maintenance protects the value of your property and in many instances can prevent major expenditure. Landlords need to budget so that when repais or maintenance are required they have enough money to pay for the repairs. It's also important to conduct regular inspections of the property to ensure it's safe and adequately maintained. To do so, you can inspect the property up to four times a year if you give your tenants proper notice.


Maintenance
An investment property, like any other asset, requires periodic maintenance. If you have a property manager, she or he will advise you of any repairs needed to maintain the value of your investment - both the capital value and the rental return.

Landlords must maintain rental premises in a reasonable state of repair, considering the nature of the property. A poorly maintained residence does not encourage good tenants. It reduces rental returns and devalues the property in the long term. Also, repairs and maintenance can be a deduction for taxation purposes -this matter should be discussed with your accountant.

Because of the legal requirement that rented properties be 'fit to live in', you are obliged to organise a qualified tradesperson to carry out urgent repairs - such as leaking roofs, or any fault or failure of the gas, electricity or water supply - as soon as reasonably possible. A breach of your duty of care to provide safe premises may mean you are sued for negligence.


Agent repair approval
As an owner, when you are negotiating your management agency agreement with your real estate agent it is important to include what amount you will allow the agent to approve without consulting you on repairs and maintenance. This should be written into the management agency agreement and clearly state whether there is an agreed maximum level up to which an agent can authorize repairs or that all repairs are referred to the property owner or that the owner will do their own repairs.

As a guideline, a sensible agreed amount to allow an agent to refer to the owner for approval would be when any repairs are over $300.


Are you responsible for the work of tradespeople?
Yes. Recent court cases have held the landlord responsible for the faulty work of tradespeople they hire. It’s vital that you or your agent hires licensed tradespeople to do repairs and maintenance. By law, you must have a written contract for work over $1,000. Ask to see the licence and the insurance of tradespeople.


Regular Maintenance and Safety Checks
The frequency of inspections of the premises will depend on the age and condition of the property. If you have a managing agent it is good practice to have at least one inspection annually. Some agents conduct inspections every 6 months. Discuss your individual needs with your agent.


Security
Legislation requires that the property is reasonably secure. The need for security measures (e.g. window locks, bars, deadlocks) will vary depending on the area so it's a good idea to objectively assess what security is required. Your agent will also be able to guide you on what is appropriate.


Smoke alarms
Smoke alarms are compulsory in all new or substantially renovated buildings. While not compulsory in older rental properties at present, from 1 May 2006 it is likely that this will change. They are a small price to pay to save lives in the event of a fire.

Smoke alarms can be hard-wired by an electrician. This is the recommended type of smoke alarm. With battery-operated alarms, tenants are normally responsible to replace batteries although this is something that should be checked during inspections.


Urgent Repairs
If there is an urgent repair and the tenant cannot reasonably contact the owner or agent, then the tenant is able to authorise the work using a qualified tradesperson and seek reimbursement for these repairs up to $500.

The following items are regarded as urgent repairs:

  • A failure or breakdown of the gas, electricity or water supply eg. Burst hot
  • water system or blocked sewerage
  • A failure or breakdown of any essential service for hot water, cooking, heating
  • or washing
  • Blocked or broken toilet
  • Serious roof leak
  • Dangerous building fault
  • Flooding or serious flood damage
  • Serious storm or fire damage
  • Anything that causes the premises to be unsafe or not secure eg electrical faults


Insurance
It is critical that your investment property is adequately insured, at least in order to cover the worst kinds of disaster. The two most important kinds of insurance you should have over residential premises are buildings insurance and public liability insurance.


Buildings insurance
Without buildings insurance to protect your property against fire and other forms of damage, you may not be able to secure a loan. It is a good idea to take out a replacement policy, where the insurance company guarantees to get your damaged property back to its original condition, either by repairing or replacing it.

You will have to decide how extensive your buildings insurance will be: for instance, will it cover flood damage? Damage caused by tenants? Costs of demolishing and redesigning the premises if they are damaged beyond repair?

Be careful not to underestimate how much your property is worth: if it is underinsured, your insurance company will only pay out a proportion of the costs of replacing it.


Public Liability Insurance.
This form of insurance is meant to protect you against a damages payout if anyone is injured on your property as a result of negligence. Again, you must decide how extensive your policy will be (for instance, does it cover injuries to trespassers or burglars?) You can usually take out public liability insurance as part of your buildings insurance policy.

Your managing agent can advise you further on what kinds of insurance are appropriate for your needs. Remember that the policies offered by various insurance companies can vary considerably. Shop around, and remember to read the fine print carefully!

Other types of insurance you may wish to consider are:

  • Fixed contents (for items sometimes not included in the building policy eg
  • carpet, blinds etc.)
  • Malicious damage by tenant
  • Loss of rent
  • Landlord Insurance