Property Management update – June 2016

If you lease out a property, did you know that your tenant’s ability to obtain and claim against insurance is potentially affected if your property does not meet the minimum security requirements?

The lead in period for rental properties to meet the minimum security standards under the Residential Tenancies Act 1987 (the RT Act) ended on the 1 July 2015.

This means that any loss suffered by the tenant due to the lack of security to the property may lead to a civil claim by the tenant.

Should the tenant believe that the property does not meet the minimum security requirements, the tenant has the right to:

  1. Issue a notice to you, as the lessor, for a breach of the terms and conditions of the Residential Tenancies Act 1987. This breach would provide the landlord the opportunity to rectify breach as soon as practical
  2. If the breach is not rectified, the tenant can then apply to the Magistrates Court to instruct the lessor to comply with the minimum security standards. During this process, the Court also has the ability to grant compensation such as reduced rent for the rental period of non compliance or even worse, could grant a termination of lease leaving you with no tenant.

It should also be noted, if the lack of minimum security measures is likely to cause an injury to a person, expose the property to damage, or cause the tenant undue hardship or inconvenience, then the attendance to and repairs of may be subject to the ‘urgent repair’ requirements.

There are a number of companies currently providing a combined minimum security, RCD and smoke alarm service and compliance certificate for about $125 + gst and the cost is likely to be tax deductable.

Apart from the obvious requirement to comply with the minimum security standards, providing a safe and secure home for your tenants is a added benefit and may well be a tipping point for renting your property over another.

Tenants are not necessarily looking for alarms – proper security locks and gates and windows that close correctly will keep most tenants happy.

Further details on the minimum security standards can be found on the Department of Commerce website.