Taking on the role of a DIY landlord is a significant responsibility. My goal, as an expert in NSW residential property management, is to equip you with the knowledge and tools to mitigate risks and ensure a successful, legally compliant tenancy. This guide is structured sequentially through the tenancy lifecycle, providing clear, actionable steps and essential resources.
1. Pre-Tenancy: Advertising, Compliance, and Tenant Selection
This phase is critical for setting the right foundations and securing a quality tenant.
1.1 Property Compliance and Safety Checks
Risk: Fines, disputes, and potential injury from non-compliant property.
Actionable Steps:
- Smoke Alarms: Ensure smoke alarms comply with current NSW minimum standards. They must be working and checked annually. Keep detailed maintenance records.
- Minimum Standards: Verify the property meets the basic health and safety standards (e.g., weatherproof, structurally sound, adequate ventilation, functioning electricity/plumbing/gas). Refer to NSW Fair Trading for the full list.
- Pool Compliance (if applicable): Obtain and maintain a valid Pool Safety Certificate and ensure the pool is registered on the NSW Pool Register.
- Landlord’s Information Statement: You must provide the prospective tenant with a copy of the Landlord Information Statement before they sign the agreement. This is something Kavaho helps you with diretctly. Tenants must click on the link provided within the Agreement before they can proceed to signing. The link directs the Tenant directly to the Landlord Information Statement on the NSW Fair Trading website.
1.2 Advertising and Viewings
Risk: Breaching anti-discrimination and ‘rent bidding’ laws.
Actionable Steps:
- No Rent Bidding: NSW laws prohibit landlords and agents from soliciting or encouraging tenants to offer more than the advertised rent. The advertised rent must be a fixed price.
- Accurate Representation: Ensure all photos and descriptions accurately reflect the property’s current condition. Misleading information is a breach of the Australian Consumer Law and the Residential Tenancies Act 2010 (NSW).
- Fair Access: Treat all prospective tenants equally and do not discriminate based on protected characteristics (e.g., race, sex, disability, etc.).
1.3 Tenant Application and Screening
Risk: Selecting a tenant with a poor rental history or inability to pay rent.
Actionable Steps:
- Application Form: Use a comprehensive application form that requests proof of identity, income verification (e.g., payslips, employment letter, bank statements), and contact details for past rental and employment references.
- Identity Verification: Use the applicant’s ID to confirm their identity.
- Reference Checks: Contact previous landlords/agents and employers directly. Ask specific questions about rent payment history, property care, and compliance with the tenancy agreement.
- Tenant Database Check: Access the National Tenancy Database (NTD) to check for any serious breaches of past tenancy agreements (e.g., excessive rent arrears or property damage) that resulted in an NCAT order and listing. Note: As a private landlord, you typically need to access these databases through a commercial platform.
Essential Resources:
- National Tenancy Database (NTD): Access via commercial service providers (e.g., RentBetter, Rent.com.au, or similar DIY landlord platforms).
- NSW Fair Trading – Tenancy Databases: (Search ‘NSW Fair Trading Tenancy Databases’) – Understand the rules around listings and disclosure
2. Commencement of Tenancy
This stage formalises the agreement and documents the property’s initial state.
2.1 The Residential Tenancy Agreement (Lease)
Risk: Using a non-compliant or incorrectly completed contract.
Actionable Steps:
- Use Standard Form: You must use the Standard Form Residential Tenancy Agreement provided by NSW Fair Trading. This ensures all mandatory terms are included. Of course, Kavaho’s Lease Agreement is fully compliant and aligned with the NSW Fair Trading Standard Form Residential Tenancy Agreement.
- Special Terms: Any special terms must comply with the Residential Tenancies Act 2010 (NSW) and cannot contract out of the tenant’s or landlord’s statutory rights. Example: A term requiring the tenant to arrange and pay for professional pest control at the end of the tenancy is generally void.
- Signing and Copy: Ensure all parties sign the agreement, and you provide a fully signed copy to the tenant. Within Kavaho, all parties named on the agreement must sign the agreement. Notifications are sent automatically to all parties named on the agrement when the last person has signed it. In addition, the document is made available to view and download within the Documents area of each signatory’s Kavaho account.
2.2 Condition Report and Bond Lodgement
Risk: Disputes over property condition at the end of the tenancy due to poor documentation.
Actionable Steps:
- Condition Report: Complete the detailed Condition Report (Schedule 2 of the Residential Tenancies Regulation) on or before the day the tenant moves in. This report is your crucial evidence of the property’s state. Once again, this you can do in Kavaho.
- When you tenants have signed the lease agreement, they are notified whenever a condition inspection is completed. The condition inspection reports are shared automatically.
- So, for the all-important Entry Condition Inspection Report, take comprehensive, dated, high-resolution photographs of every room and area (including garden, garage, and fixtures) before the tenant moves in. Upload them into Kavaho in a new ‘Inspection’ and add comments as requried.
- Tenant Review: Send a secure message through Kavaho Messages to you tenant requesting their acceptance of the report being a true and accurate representation of the condition of the property. Give the tenant seven days to review the report and respond to your email. If they do not do this, then the report you created stands as evidence of the property’s condition.
- Bond Lodgement: The rental bond must be lodged with NSW Fair Trading using the Rental Bonds Online (RBO) system. Do not hold the bond yourself. Provide the tenant with the RBO lodgement details.
3. During Tenancy: Maintenance, Inspections, and Breach Management
Consistent management throughout the tenancy minimises property damage and non-compliance.
3.1 Maintenance and Repairs
Risk: Breaching the landlord’s obligation to maintain the property, leading to NCAT orders and compensation claims.
Actionable Steps:
- Timeliness: Attend to all repairs in a timely manner, especially urgent repairs (e.g., burst water pipes, electrical faults). Landlords have 24 hours for urgent repairs. You can show your Tenants that you have seen their request by marking it ‘In Progress’ and setting a date by which you plan to have the work completed. This prompts them to respond to calls from the tradies you select for the job.
- Use Licensed Tradespeople: Always use appropriately licensed contractors for work that requires a license (e.g., electrical, plumbing, gas fitting, building work over a certain value).
- Check Licenses: Use the Service NSW website to check that any tradesperson’s licence is current and valid for the work being undertaken.
- Tenant Access: Provide the correct written notice to the tenant to access the property for repairs, usually two days’ notice (Section 55(2)(c) of the Act).
3.2 Routine Inspections
Risk: Allowing hidden damage or poor housekeeping to escalate.
Actionable Steps:
- Frequency and Notice: You can only conduct four routine inspections in a 12-month period. You must give the tenant at least seven days’ written notice (Section 55(2)(d) of the Act). Kavaho helps you with this one, as well. When creating the lease agreement, you also set the inspection schedule by entering the dates of the first Routine Condition Inspection and Fire Safety Inspection and the frequency with which they occur. Kavaho automatically sends notifications to all parties named on the agreement 14 days prior to the inspection occucing and one reminder notification thereafter.
- Document Findings: Take photos (only of areas showing potential damage or necessary repairs, and with the tenant’s privacy in mind), upload these into the Inspection within Kavaho and write detailed notes on the property’s condition, housekeeping, and any required repairs.
Follow Up: Address any identified issues promptly. If the tenant’s care of the property is a concern, send a follow-up letter or Notice to Remedy Breach (if appropriate).
3.3 Managing Rent Arrears and Breaches
Risk: Allowing rent arrears or breaches to continue, making termination difficult.
Kavaho monitors for rent and bill payment and sends notifications to both the tenant and landlord when any amount is not paid in full. Follow-up notifications are then sent, but there may come the time when automated prompting does not work. If you can maintain your composure and show empathy, but remain professional about this business arrangement as this is your investment property, then conversations can work wonders. If the problem persists despite your best efforts, then you may have to follow the formal procedures outlined below.
Actionable Steps:
- Rent Arrears: If rent is 14 days in arrears, you can issue a Non-payment Termination Notice (14 days’ notice). You can also apply to NCAT for termination.
- Other Breaches: For non-rent breaches (e.g., not keeping the property reasonably clean), issue a Notice to Remedy Breach (at least 14 days’ notice) giving the tenant time to fix the issue. If the breach is not remedied, you may issue a Termination Notice or apply to NCAT.
- NCAT (NSW Civil and Administrative Tribunal): This is the ultimate mechanism for resolving serious, unresolved disputes (e.g., termination, significant damage, excessive rent). Do not attempt to take self-help action (e.g., changing locks).
Vacation date and calculation of amounts owed: The Lease Termination process in Kavaho allows you to terminate the lease on a past, present or future date. Kavaho calculates the amounts owed and distributes this information automatically to all parties named on the lease agreement.
Essential Resources:
- NSW Fair Trading – Ending a Tenancy: (Search ‘NSW Fair Trading termination notices’)
- NCAT (NSW Civil and Administrative Tribunal): (Search ‘NCAT Residential Tenancies Division’)
4. End of Tenancy: Final Inspection and Bond Refund
This is the final hurdle to ensure a smooth transition and close out the agreement.
4.1 Exit Condition Inspection Report
Risk: Inability to claim the bond for damage or cleaning due to lack of comparative evidence.
Actionable Steps:
- Final Report: Complete a final Condition Report after the tenant has vacated and returned the keys. The Exit Condition Inspection is created automatically upon termination of the lease within Kavaho.
- Compare to Entry Report: Directly compare the move-out report and photos to the original move-in report and photos. The tenant is only liable for damage beyond fair wear and tear.
- Documentation: Take a full set of final, dated photos and videos. This is your evidence for any bond claim.
- Notice to Vacate: Ensure the correct minimum notice period was given by either you or the tenant as required by the Act.
4.2 Bond Claim
Risk: Unjustified claim leading to dispute, unnecessary stress, and a potential NCAT order against you.
Actionable Steps:
- Mutual Agreement: If you and the tenant agree on the bond refund amount (including any deductions for cleaning, damage, or arrears), complete the joint bond claim form via Rental Bonds Online (RBO). This is the fastest method.
- Disputed Claim: If you cannot agree, you must apply to NCAT for an order to have the bond paid out. You must provide all your evidence (Condition Reports, photos, invoices/quotes for repairs) to support your claim. NSW Fair Trading holds the bond until a mutual agreement or NCAT order is issued.
Essential Resources:
- NSW Fair Trading – Getting your Bond Back. This guide provides a robust framework for managing your property in compliance with the Residential Tenancies Act 2010 (NSW).