VIC New property requirements / change of policy

So, as an agency, we've recently reviewed our policies in relation to the properties we manage. Basically, it's the policy of - if you can't maintain your property to minimum standards, then unfortunately we can no longer manager your property.

We don't think the standards are too high - all we ask is that the property is clean, everything inside is working (or removed if not working as a landlord in Victoria is obligated to repair if it's not working and you can't contract outside of that obligation), that sufficient heating is installed (this will be a legal requirement July 2020) and that all repairs are completed in a reasonable time frame.

As an agency, we can't take the risk of dealing with owners who don't fix things or, try to lease houses with broken items - so, was just curious - what do you think the best wording for this would be?

 

No idea on wording. I think there should be more property managers doing this.

 

I think you're right in this policy Michelle. I share an office with a property manager and I've been looking at some of the legislative changes coming through. Minimum housing standards are a big part of the legislation. If a landlord isn't providing a property to meet those standards, then property managers probably don't want them as clients. It's simply too risky to a property management business.

The difficult part to define is what is 'clean'? Some other thoughts come to mind:

* It's the landlords responsibility to provide a property that is clean and in good repair at the beginning of the lease.
* It's the tenants responsibility to maintain (and return at the end of lease) the property in a clean condition.
* It's the tenants responsibility to report problems and potential repairs in a timely manner.

The other thing that's difficult to define is around repairs. You'll need to differentiate between repair required due to wear and tear, as well as repair required due to tenant negligence.

 

It's stuff like this, Agent's no longer willing to take 'some' of the risk for their Clients, nor have their reputation questioned because the Tenant and general public such as A Current Affair audience always believe it's the Agent's fault:



I've had this up on my website for a while because quite frankly got sick of making excuses for Owners who don't want to spend money and Tenants who seem to think it's my fault:

 

You could try to prescribe standards and definitions etc in your management agreement. The risk you run, though, is that the law changes and your agreement no longer aligns with the law, leaving you exposed. This could happen either due to legislative change, or through frequent case law changes as the relevant tenancy tribunal interprets the legislation over time. Also it requires you to try to duplicate or otherwise reflect all the landlord's legal obligations in your management agreement. This could get pretty cumbersome.

A simpler approach could be to include in your management agreement a clause that allows you to terminate it if, in the opinion of the agency/property manager, the landlord is in breach of their obligations under the relevant residential tenancies legislation.

That would oblige the landlord to comply with changing legal requirements on an ongoing basis to retain your services as manager.

 

Hi Michelle, would this be a manage by exception scenario, or are there that many non-compliant properties where you are? :/

I have a 'Landlords Checklist' that I go through with new Clients during the onboarding process. During that conversation if it becomes clear that I won't be able to do business with them, it doesn't proceed past that point. I put a lot of information on my website and direct people there before we meet - very much a self help type of approach - however I've found a lot of people don't want to read, so in a way it's almost a waste as you still have to have these conversations anyway. As long as your staff are trained well you could create pro-forma's as supporting material to take into meetings with you and include as take away material for your potential new & existing Clients?

 

Thanks for the feedback Michael - it's taken a little while to turn around the office I worked for from a numbers game to a value game (having 100 quality properties is better value than 150 poorly maintained ones). We sacked an owner of 3 last month as the arguments about fixing things (broken window, door stopped locking...) was just too hard.

Much easier now since I'm running my own show, but I still help out in the office in Werribee (so yes, we have a lot of average / sub par homes in the area)

 

Dear Michelle,
I am very happy to listen to your sensible thoughts!
I am a landlord who wants to maintain their property!


With my landlord's hat on, in the past year, I have asked one of our Managing Agents to:
Repair roof, replace white goods and annual pest control.
Requested copies of signed documentation.
None of these things happened!

Am micro managing, and consuming too many resources!

Do you have any suggestions for me?
we are inner Sydney based.

 

Happy to provide suggestions- being in Victoria our legislation is different but that doesn’t change the property manager / landlord dynamic. As a landlord, if you request works and signed docs like your tenant lease for example- that’s a very basic part of what property managers do. If you’re not getting it - might be time to find a new pm.

The only time a pm should step in and suggest you don’t do something is when based on experience they know it’s not the right course of action- for example, a plumber attended and serviced a heater (very old one), and it Failed carbon monoxide testing. Owner was angry that the plumber disconnected it and said, don’t worry about replacement as her handyman would get it going again... so many red flags there (agent who was telling me that one sacked that owner)