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Stay informed about the August 2017 tenancy law changes

By Ben Faulks

With 67.9 per cent of homes in Belconnen being rented, according to the 2016 Census, there are plenty of landlords around who will need to stay up to date on the latest tenancy law changes. On August 24, a number of updates were made to the Residential Tenancies Act 1997, providing a few more things for both tenants and landlords in the Australian Capital Territory to be aware of.

Here are a few key changes.

1. Smoke alarms

Smell something burning? Even if you don't, doesn't mean it isn't – and that's why smoke alarms must now be installed in all rental properties. This applies immediately to any new tenancies, and properties under existing agreements need to have smoke alarms fitted within a year from August 24.

2. Posting clause 

The existing optional posting clause has been updated. With this clause, if you are being relocated by your business and require the tenancy of your rental property for yourself, you are entitled to terminate the tenancy early.

Following these changes, you will be required to give tenants eight weeks notice – double the previous requirement. This only applies to agreements signed after August 24.

3. Breaking the lease

A new optional fee clause sets a fixed rate for early termination of tenancy agreements, dependent on the lapsed and remaining length of the lease. If this clause is included in a tenancy agreement, tenants who wish to terminate their fixed term lease early, for whatever reason, will pay a set fee for the termination.

If the fixed term is fewer than three years, and

  • less than half of the term has passed, six weeks of rent must be paid.
  • more than half of the term has passed, four weeks of rent must be paid

If the fixed term is more than three years, the amount must be agreed upon by the tenant and lessor.

4. Final inspections

When the time comes for tenant and landlord to part ways, a final inspection should take place. The updated Act provides clear requirements for the end of a lease. Simply put, you must conduct a final inspection of the property in the presence of the tenant.

Both parties must agree upon and sign a condition report. However, if either you or your tenant fails to attend the inspection despite reasonable opportunity, the report may be signed on behalf of the absent party.

5. Claiming bond

Lessors' obligations regarding bond have been clarified, and a new deduction made available. If keys are not all returned by the tenant at the end of a lease, you may deduct the reasonable cost of changing the locks from the bond.

If claiming deductions, you must provide your tenant with a bond release form within 10 days of the end of the tenancy agreement. The form should outline any claims for deductions and an estimate of the price of repairs or security.

Bear in mind that if the tenant doesn't agree with your claims, they can file a bond release form independently from you. The Office of Rental Bonds (ORB) will notify you if this happens, and you'll be given 10 days to dispute their application. Any disputed amount will be withheld by the ORB until such a time that the matter can be negotiated at the ACT Civil and Administrative Tribunal.

Keeping yourself informed of changes to the tenancy laws is vital if you're renting your property out. If you're struggling to stay afloat amongst all the changes, consider hiring a property manager.

With years of specialised experience, the team at Ray White Belconnen will ensure your property remains compliant with the law, and that you're kept aware of changes at all times. Get in touch today to talk about managing your property.

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