Frequently asked questions from property managers

1. We have a lease in place for 2 years and the landlord would like to increase the rent by $10 at the 12 month mark, how do we facilitate this?

A rent increase can be inserted into a lease on the basis that the:

• the parties agree;
• it is stated in the agreement; and
• it has been at least 12 months since the date of the last rent increase for the property.

When preparing your agreement you will need to ensure that the increase is inserted into the agreement as a special term. This can be annexed to the agreement or inserted in Part 3.

If you are a Realworks user, the special term is in a ready to use format under the annexure tab.

It is essential that you know that just having the increase in the lease isn't the final step in applying the rent increase mid-term. The property manager/owner must also give the tenant separate two-month written notice of the increase. It does not automatically come into effect because it is in the agreement. 

The notice should include the increased amount, the day it takes effect and the date of the last rent increase. Realworks users can access a compliant template notice to increase rent – EF213 Notice of Rent Increase - During a Fixed Term Agreement.

2. If we have a reason to enter the home and the tenant has given us mutual consent, do we still need to provide an entry notice RTA Form 9?

No, mutual agreement removes the need to provide an RTA Form 9.

The RTA has provided a list for when an entry notice is not required:

• in an emergency
• if the property manager/owner believes entry is necessary to protect the property from damage about to happen
• if the tenant verbally agrees with the entry
• to carry out site maintenance in a caravan park (if specified in the tenancy agreement)

Best practice would be to record the consent in your systems.

3. The tenant has vacated - what is the time frame for me to conduct the exit inspection?

The RTRA Act does not specify a time frame for an owner or property manager to conduct an exit inspection. What it does specify, however, is that if the outgoing tenant presents you with an exit report then the owner/property manager must:

• complete the form
• (if you disagree with the tenant on a particular item), make a comment on the report
• complete, sign and return a copy of the form to the tenant within three business days
• keep a copy of the signed report for 12 months after the agreement ends

Therefore, if the tenant has not supplied an Exit Condition Report no time frame applies to the conducting of the inspection or report.

In fact, the Lessor/property manager is not required under the law to complete the exit report unless provided by the tenant, so your reporting might be in way of a note pad.

Best practice is to complete an exit condition report on the RTA approved form and to conduct the inspection as soon as possible. However, risk management and evidence is crucial in minimising dispute between the two parties.

REIQ members with further questions on this topic or others can contact the Property Management Support Service on 1300 697 347 or at pmsupport@reiq.com.au. Not a member? Join today.