VIC Increase in Safety & Compliance Obligations in Victoria

@rizzle, I don't have the exact answer to the legality of your question right now, but here's an example to think about: I am not an electrician, but I could very easily change a faulty powerpoint. But I wouldn't do it, because if something went wrong, I would be liable. If my DIY work and lack of experience caused someone to die, that's not good.

$100 to pass on the liability to someone else is a small price to pay. In my opinion, landlord insurance is once of the less-expensive insurances out there. So if you pay $285 for the LL insurance and then add the $100 for the smoke alarm maintenance, you're still paying less than $400 per year to insure the unpredictability of human beings in your half-million-dollar asset.

Also, that $99 (with Smarthouse) includes adding missing alarms, repositioning wrongly placed alarms and tenant-reported problems with unlimited callouts so it's a great service.

 

That is a very poor example. Because you're not an electrician, a licensed trade, of course you would be liable for any injury caused by you DIYing a faulty powerpoint. "Smoke alarm servicing" is not a licensed trade. The legislation for each state sets out the requirements for smoke alarm compliance, and in each state it is the same - follow manufacturer's test instructions, and replace battery. Provided you follow the legislation, you do not have liability.

Like I said earlier - a "compliance certificate" from a smoke alarm company has the same weight as a scribbled note on toilet paper - none. It will not save you from liability or make one whit of difference to an insurer (in fact I'd argue requiring you get one would be illegal tying).

You can make the claim all you like, but the reality is that it's just because your agency doesn't want to check smoke alarms. That's fine, but don't dress it up as being a liability issue - it's not.

 

In terms of whether you can do the regular servicing or not, it does not say that you need to use an external company.

The draft legislation does state that a "suitably qualified person" must do repairs. However if works on the property do not require a qualification (such as changing a door handle) I would take this to mean that the owner can do the works unless an electrician is required for hard wired alarms.

As an agent I do not accept the liability to check alarms, that's not a risk I'm willing to cover if they're in the wrong spot, the battery was in backwards or my staff fell off a ladder etc.

Currently I have 65% on smoke alarm servicing and I personally feel this one is important to pay for. It's not too expensive, everything is covered no matter the number or type of alarms, unlimited call outs etc. If you need an electrician it will cost more than $99, so I see value there. I have started going through the other 35% to slowly have them signing up prior to the 1st January.

If an owner chooses to take on this responsibility they need to be willing to jump at it immediately, and ensure it's done at minimum every 12 months. The legislation is moving away from the tenant even changing the batteries.

In terms of the gas and electrical safety compliance, this must use a qualified trade. I personally use Detector Inspector in my business, they've been great - but I appreciate the importance of having options available. This is why I've also contacted one of my regular plumbers and electricians who are going to put a schedule together - they won't have unlimited call outs, all parts would be additional - but it at least gives the client the option to decide what they want.

It's more work for me, but in my opinion doing that ground work is a value add for my clients and shows we're doing our own due diligence on the matter.

Regular servicing is easiest for me, it is straightforward and a fixed price for the owner - but it's not always the best financial decision, especially given it's no longer a $99 fee but four times as much.

 

I keep seeing this liability thing come up, and it's still just wrong.

Again, the agent and/or lessor is always responsible for ensuring the smoke alarms are in good repair, in the right spot, with batteries etc - that's in the legislation. Whether you do it yourself or outsource to Smoke Alarm Solutions or some other mob, you're still liable anyway. None of these companies have an indemnity clause in their contract with you. In fact most of them expressly disclaim liability, and Detector Inspector even has a clause requiring you to indemnify them from liability!

This is a valid point, and I agree that many will find value in the fact that if a tenant hits the smoke alarm with a broom to shut it up and breaks it, the smokie mob will replace it for no additional charge, er, theoretically.

Right, and that's a fair point to convey. But many agencies are saying they "must" have a (worthless) compliance certificate. Or pull out the (as you just did) liability card - which just isn't the case. Not only do you not actually offload the liability using these mobs, you actually quite literally take on theirs in the contract!

 

@Mat, regardless of the use of "liable", I don't want my businesses or my client's tenants exposed to any potential risks where possible. If this means that we don't take on the DIY landlords, then that is ok with me because (in my personal opinion), there is less risk and liability within our agency.

 

It's the owner that is liable.

At no stage do we say Detector Inspector is 100% liable should there be a fire, I'm just saying that as the agency we are not indemnifying the owner of their legal responsibility. That's why we recommend someone who supplies a regular service and has the knowledge of the locations and types required.

As the agent we ensure they're there and ask the tenant if they're working. I am not sending my staff up a ladder (which I am 100% liable for should they fall) or advising owners that they are or aren't definitely in the right location, the correct number or type for the property. As an agent we have a rough idea of this, sure, but I am not a building inspector. Same as any other repair.

I do agree though that an agent should be giving the correct information, and be honest with clients to advise them the legislation and also advise that it is not a responsibility to outsource it - but it's easier and is a low cost method to ensure they're regularly looked at.

 

Hi @Lil Skater , thanks for putting in your thoughts. Thats exactly what i was looking from my PM as well. Rather than go for a regular servicing, give me options on what I can select and how much would it cost. I did some search myself but could not find many doing that.
Would you be able to pass on some contacts please? I will ask my PM as well to look for options and pass on to me.

 

Mine is just through my regular trades, it's a win for another small business and also gives options to the clients.

Ask your PM is they can request this from their normal tradespeople as they might be able to negotiate a better deal for you, depending on where your property is I may just be able to pass on the details of my guys too if you like

 

Sure,

Sure, will check with them.
Property is in Geelong (Newcomb) if that falls in area of your guys

 

Ah sorry! I’m Melbourne based

@Warren from Geelong and I may not 100% agree on everything, but the team at Geelong Property Managers are ace. Maybe they’ve got some trades they’d be happy to share

 

This legislation is now in effect with a commencement date of 29/3/21. There seems to be only one company that does the checks - do you smell a rat?? and they charge over $747 for the first year - criminal

 

Just spoke to an electrician who is going to charge $350 ex GST, just to do the electrical check. He said there was 70+ pages to fill in and he wasn't happy with that price but didn't think he could charge any more. Then you would have to get a plumber in for the gas. He said the Detector Inspector was advertising for new staff and that they won't be able to service all the people signing up on these subscriptions. We are between a rock and a hard place.

 

You don’t have to use that company or any particular company - the compliance paperwork has to cover off a few things (address, date etc) but nothing any plumber, electrician etc wouldn’t be able to do.

70 pages seems a lot - are you sure he isn’t exaggerating?

I get the gas safety checked every two years by a regular gas plumber.

 

Your agent is correct in advising you of the changes coming into effect from end of March 2021. Our company is currently looking at alterative suppliers to perform the works. It appears not all providers are the same and I suggest perhaps asking your agent if there is another provider who you can compare with.

 

I find these posts rather concerning and demonstrates a real lack of understanding of basic property management fundamentals. I would be insulted if I was labelled a DIY landlord by simply wanting to press my own smoke alarm test button. Furthermore, the liability has always been with the rental provider - never the property manager.

In the last few days I also received an email from my property manager who is planning to hire a third party to fulfil this service for $99. They are almost panicking to meet the March deadline. I had to explain that you still have 12 months. Plus, if s/he were smart, you would do the 2 year electric test first and get the electrician to press the test button of the smoke alarm for free.

As a rental provider providing a pre-1997 house, years ago I got a (qualified) electrician to swap the existing battery operated alarm with a mains powered alarm that I purchased from an electrical wholesaler. I also purchased a 10year lithium battery, that I change between renters. I may be the sad exception but I can do a better job, and more qualified (with an engineering degree), to check and service a smoke alarm. So many of the Government's well intention initiatives these days attract rouge tradies and service industries (solar panel rebate, globe to LED swaps, and pink batts are other example that come to mind). And this smoke alarm testing is going to attract anyone that can press a button and use a ladder (and hey, if the property was built before 1997, they can throw up the cheapest and nastiest alarm).

 

Thanks @Kym Ryan , can you please suggest any reliable suppliers to perform this work if you have found any?

 

Hi,
Posting the email from my PM in Melbourne.

"
Dear XXX,
We recently informed you of our Electrical Safety/Compliance program, at the time of announcement we were able to negotiate a cost of $235 (plus GST) every year to complete the Safety check & Smoke Alarm Service.
We have since been able to re-negotiate the costs and terms with XXX and are please to advise a more affordable program:

• A full electrical check will now only be completed every 2 years (as legally required) at a cost of $235 (plus GST), this also includes smoke alarm servicing.
• As Smoke Alarms are required to be serviced every 12 months, they will be done on the alternating year at $90 (plus GST)

Example: Year 1- Full Electrical Service inc. Smoke alarms ($235 plus GST),
Year 2- Smoke alarm service ($90 plus GST)
Year 3- Full Electrical Service inc. Smoke alarms ($235 plus GST),
Year 4- Smoke alarm service ($90 plus GST)
"

Appreciate your thoughts.

Thanks.

 

Thanks @Hotshot , is there no information about gas compliance which also need to be done every 2 years?
Also would you like to specify the name of the vendor doing this? Thanks!

 

Hi,
There was no mention of Gas compliance. Most likely they will organise a seperate vendor for that...
The name of the Electrical compliance vendor was NH Electrical. No further details provided i.e. Website, etc.

Regards.
HS.

 

Hi,

I too have received notification from my PM with regards to "Action Required: Safety & compliance obligations for rental properties have increased".

Honestly and this is my opinion, I think this is a joke.

I have no issues with the requirement for Smoke Alarm testing yearly and have been covering this for years. Despite thinking that a monkey with a broom could test as well as replace a battery yearly (including climbing up and down a ladder), I went with the "better safe than sorry" mentally on this one and am covering this cost.

However the new requirement to check for gas and electrical safety checks, this is just a money grab in my opinion. Properties have been around for decades with both services never requiring any checks. Rather than bust every property owner, the government should focus on the shoddy workmanship of some of these so called "qualified" trades and increase training and testing on new homes/apartments being built. In the past couple of years, there have been more and more issues arising from dodgey workmanship and lack of proper checking. All I see is the laws protecting idiots and making those who have some common sense pay for this.

As far as the costing goes, I will be going back to my PM for alternatives to the 1 provider that everyone seems to be getting (Detector Inspector’s Safer Home Package) and seeing what else is available. Wondering if Detector Inspector has shares available as they are about to go through the roof with all these subscriptions.

I can definitely say that rental property prices are about to go up, as I will be incorporating this cost to my next rental review and increase. I am sure I am not the only one who will be doing this.

Regards,
oluh