» tenants responsibilities

Best tenant screening processes and background checks

BMT team — Wed, 07 Aug 2019 06:35:32 +0000

Finding good quality tenants is often considered one of the biggest hurdles to property investors. To avoid being locked into an unpleasant rental agreement, it pays to perform a tenant background check before choosing who you allow to live in your investment property. Here are some ways to increase your chances of securing good quality tenants who are likely to take care of your property and pay their rent on time. Tenant background checks What information is needed from the tenant to conduct a check? What information is referenced when performing a check? What information is obtained following a check? Who can access database reports? What are the costs involved in obtaining a report? How else can I protect my investment? Points to remember when screening tenants Tenant background checks Landlords and property managers often use tenant screening services to conduct background checks. Tenant screening services contain historical tenancy information and are a good way to determine if a tenant is a sensible prospect to rent an apartment or house. Examples of screening services used to commonly access ‘enquiries’ databases and generate reports include: National Tenancy Database Tenancy Information Centre Australia (Tica) Trading Reference Australia Screening services run background checks to determine a tenant’s previous rental history, verify their income and employment and obtain a credit report to determine the ability of the tenant to meet rental obligations. What information is needed from the tenant to conduct a check? For a check to be conducted and a report obtained by the landlord or real estate agent, a tenant needs to provide the following: Full name Date of birth Photo identification (driver’s licence or passport) Email address Previous address Tenant signature authorising a credit report to be obtained Landlords or property managers should also contact previous landlords, ideally covering the past two years to verify dates of tenancy, monthly rent paid, reliability of payments as well as identify any issues the landlord experienced with the tenants, which may include any property damage. What information is referenced when performing a check? Former president of the Real Estate Institute of Australia (REIA), Malcolm Gunning identified that landlords and agents aim to obtain two results when conducting a tenant screening. They want to know if the tenant can make their rental repayments and if they have a history of looking after properties they have rented. To obtain this information, landlords and property managers will look at sources including: Screening services Past rental ledgers References from previous agents and tenancy database reports Social media sites including Facebook Credit reports What information is obtained following a check? Generally, the information found when conducting a tenancy search and obtaining a report includes: Tenant identity validation (to avoid identity fraud) Rental history details Blacklist information Bankruptcy issues via Australian Financial Security Authority bankruptcy register Court judgments, court writs and summonses Australian Securities and Investments Commission (ASIC) search results Previous searches on the tenant, who conducted them and when Visa status (where applicable) Search results from ASIC’s directorship databases Who can access database reports? Tenancy databases with annual turnovers of over $3 million dollars are governed by the Australian Privacy Act 1988. This law regulates the handling of personal information about individuals. Tenancy database reports can be accessed by landlords and property managers when consent is provided by the prospective tenant. The Office of the Australian Information Commissioner (OAIC) advises that under Australian Privacy Principles, individuals are also entitled to access database data about themselves to know what information is held about their rental history. An administration fee is often charged to cover the costs associated in locating and delivering this information from a database to the individual. What are the costs involved in obtaining a report? Australian leading consumer advocacy group, CHOICE conducted research to determine the process and costs involved in obtaining access to tenancy database information. They found that the National Tenancy Database (owned by Equifax) provides free copies of tenancy files within two weeks of request when emailing info@ntd.net.au. They also offer a $38.50 fee to access files instantly through their partner tenancycheck.com.au, but this method does not contain the additional information found in the former mentioned National Tenancy Database when searching the ‘enquiries’ database. Tica provides access to ten tenancy files online for an annual administration fee of $55. The report includes a search of both the tenancy database and its ’enquiries’ database. Additional charges apply for additional searches. Trading Reference Australia provides free copies of tenancy files within three weeks, or you can obtain it instantly for $22. Their online report only contains information from the tenancy database. Additional information was also requested including a phone number and employer information. Any fees associated in obtaining a tenancy report completed by a screening service, undertaking a credit check or sourcing information from relevant websites can be requested from prospective tenants. How else can I protect my investment? While undertaking background checks and screening potential tenants will go a long way towards protecting your financial interests and your investment property and minimising risks, it is also wise to obtain comprehensive landlord insurance that covers you against: Loss of rent Tenant damage (malicious and accidental) Theft by tenants Flood, storm and water damage Pet damage Standard building and contents insurance may not protect in the above-mentioned instances. It is estimated that up to 83 percent of properties are underinsured. BMT Insurance works with some of Australia’s most experienced providers and can assist you to find the appropriate level of insurance cover to meet your needs. Points to remember when screening tenants Be informed – Know what to look for, as past behaviour is a key indicator of future behaviour. People and the circumstances that affect them can change but be wary of those with an unreliable rent repayment history as you may want to investigate further. Obtain landlord Insurance – Obtain landlord insurance as standard building and contents insurance may not be enough to cover your property in the event of tenant damage or theft. […]

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Landlords and tenants rights and responsibilities explained

BMT team — Sun, 17 Mar 2019 23:16:03 +0000

Throughout a residential tenancy landlords and tenants have various responsibilities which must be upheld. In Australia state-specific legislation protects both landlord and tenant’s rights. As legislations are often amended it’s imperative landlords understand what their responsibilities are as investment property owners, as they are obligated to abide by state law. When a tenant moves into a rental property the landlord or Property Manager must have ensured the premises are habitable and in a reasonable state of cleanliness and repair. The tenant is required to keep the rental property clean and tidy and, taking into account normal use considered general wear and tear, hand it back in a similar condition to how it was found at the start of their lease at the end of the tenancy. In this article we will explore: Choosing a tenant The bond Responsibilities of the landlord to the tenant Maintenance inside the property Maintenance outside Swimming pools and spas Respect for the tenant’s right to privacy Seek expert advice Choosing a tenant The landlord has the right to choose the most suitable tenant for their property. However, under the Equal Opportunity Act they must not discriminate against any of the applicants based on their gender, age, race, religion, marital status, sexuality, having children, pregnancy, mental illness and disabilities. If they do, they could be liable to pay damages or fines. The bond Rental bonds are paid by tenants at the start of their tenancy and are a goodwill payment held in trust by the specific state government rental authority. They are a financial protection for the landlord in case the tenant breaches the terms of the tenancy agreement. At the end of the tenancy damage to the property may be paid for out of the bond if both parties agree. However, landlords cannot charge tenants for any fair wear and tear of property that may have occurred during the tenancy. The process then becomes a little more complicated if there is any damage as both parties must agree the damage and cost of any repairs occurred during the tenancy. For example the landlord may make a claim on the bond for: rent not being paid damage caused by the tenant or their visitors cleaning expenses abandonment of the premises by the tenant landlord being forced to pay tenant’s bills loss of landlord’s goods Responsibilities of the landlord to the tenant During a residential tenancy, landlords have a number of responsibilities to their tenants, which are enshrined in the relevant legislation. At the time of signing the lease, the landlord/Property Manager is required to give the tenant a copy of the relevant State or Territory booklet outlining their rights. Maintenance inside the property During the tenancy, the landlord/Property Manager must keep the premises in a reasonable state of repair and comply with building, health and safety laws. They are responsible for the upkeep of the property (for example plumbing and the maintenance of provided contents such as the dishwasher or air conditioner). Landlords are required to ensure that all properties are fitted with smoke alarms. The number of alarms much be appropriate for the property size, as prescribed under the Building Code of Australia (‘the Code’). The alarms must also be working in accordance with Australian Standard 3786-1993 and correctly positioned as under the Code. Health and safety laws also require that landlords must ensure that any window coverings with cords or similar hazards are in line with existing requirements. For example, in NSW all blind cords can’t be within reach of children due to the risk of strangulation. These rules apply whether the tenants have children or not. The tenant is responsible for basic household maintenance such as replacing light globes, cleaning windows, dusting and removing cobwebs inside and out and ensuring there is adequate ventilation to help avoid mould problems in winter. Maintenance outside The tenant is responsible for garden maintenance such as mowing, edging lawns, weeding and pruning. If the tenant becomes aware of any potential damage to gutters as a result of leaf blockages or notice a water leak, they are required to advise the landlord or Property Manager. The landlord is responsible for maintenance of any garden reticulation system, tree lopping, cutting back overhanging branches (such as those near power lines) and maintaining firebreaks unless your tenancy agreement says otherwise. Swimming pools and spas If the rental property has a swimming pool or spa, the tenant is responsible for keeping the pool or spa or any associated equipment in a properly treated and clean condition. They must also observe all legal requirements relating to pools or spas during the period of the lease. The landlord or Property Manager is responsible for ensuring the pool or spa is secure, that it’s child safe and complies with pool safety standards. At the beginning of any tenancy, the landlord or Property Manager should make sure the water is clean, chemically balanced and the pool and equipment have been serviced. The tenant should also be provided with the necessary tools and equipment for day-to-day maintenance such as vacuums, hoses, brushes and scoops. Unless the lease states otherwise, the tenant is responsible for the day-to-day maintenance and upkeep of the pool such as cleaning and maintaining the chemical balance of the water, including the purchase of pool chemicals. Respect for the tenant’s right to privacy The landlord/Property Manager is not to enter the premises to carry out a general inspection until after the end of the first three months of the tenancy (depending on the relevant state legislation) and even at this time should always follow the rules regarding proper notice periods. Seek expert advice Resources: There are many great tools and resources available online for both landlords, tenants and Property Managers to help make the process of renting as easy as possible for all parties Property Managers do more than just advertise for tenants, they can make a landlord’s life easier. Property management isn’t just about collecting rent. It’s about ensuring the landlord’s property is always rented and making sure the best possible tenants are chosen. They make sure the property is well maintained, track […]

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