RTA in Focus: Condition Reports

RTA in Focus: Condition Reports

2 April 2020

This article is part of the RTA in Focus series. With a raft of reforms to the residential tenancies framework set to start on 23 March 2020, we’re giving you the information you need to ensure you understand your obligations.

You can access all the articles in the RTA in Focus series here.

One electronic copy of the completed condition report can now be given to the tenant, rather than two hard copies.

In days gone by, condition reports were completed in hard copy, carbonised form. Time has moved on and today most property managers complete condition reports for ingoing, periodic and outgoing inspections via a handheld device as they’re inspecting the premises.

But while technology has streamlined the process of compiling condition reports, the Residential Tenancies Act 2010 (NSW) has remained steadfastly in the past, requiring property managers to provide hard copies to tenants.

This changed on 23 March 2020, with amendments now allowing for the electronic service of condition reports to tenants.

Michelle McLean, Senior Property Manager at Leah Jay and Chair of the REINSW Property Management Chapter Committee, welcomed the changes.

“It reflects current operational practice and the different formats in which condition reports are delivered and completed,” she said. “This amendment will allow us to simply email a copy of the completed condition report to the tenant, saving time and unnecessary hassle in most instances.”

Property managers need to understand the circumstances in which they are permitted to provide an electronic copy of the condition report to the tenant and, where it is being provided electronically, that the appropriate permission to do so has been obtained.

What was required prior to 23 March 2020?

Previously, under section 29(2) of the Residential Tenancies Act, two copies of the condition report were required to be given to the tenant by the landlord or the landlord’s agent either before the tenant signed the residential tenancy agreement or at the time of signing.

This requirement presented no issues when property managers completed condition reports in hard copy, carbonised form. Today, however, most condition reports are completed online or via an app, such as REI Inspect Live, giving property managers the ability to simply and quickly email a copy to tenants. But even though this ability is only a key stroke away, the Residential Tenancies Act did not allow it, instead still requiring hard copies to be provided.

What’s changed?

Section 29(2) of the Residential Tenancies Act has been amended, providing property managers with an option as to how the completed condition report is provided to the tenant.

On and from 23 March 2020, the tenant may be given two hard copies of the completed condition report or one electronic copy. This must be done before or at the time the tenant signs the residential tenancy agreement.

The amendments in practice

Michelle explained that although the amended section 29(2) allows a copy of the completed condition report to be provided to the tenant electronically, property managers still need to ensure they have the tenant’s express permission to do so.

“Consent to electronic service of the condition report can be obtained by way of REINSW’s Email Service of Notices and Documents Consent Form, which is available via REI Forms Live,” she said. “If the tenant doesn’t agree to electronic service, two hard copies will need to be given to the tenant.”

Important to note is that the condition report must be completed before or at the time of signing the residential tenancy agreement.

“Property managers need to be aware that agreements cannot be signed without completing a condition report,” Michelle said. “Therefore, there will be the ability for both the condition report and the residential tenancy agreement to be served electronically. Further, both should be provided to the tenant for execution at the same time.”

Michelle said photos and videos may form part of the condition report.

“Property managers should ensure that any photos and videos are date stamped, so there can be no dispute as to when they were taken,” she said.

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