7 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.
All landlords are now required to acknowledge that they’ve read and understood the Landlord Information Statement before entering into a residential tenancy agreement.
Being a property manager isn’t easy. Gone are the days when the job was simply about collecting rents and organising repairs. The responsibilities of property managers have increased significantly and now include areas outside the core function of managing the relationship between the landlord and tenant.
Property managers are now expected to have competencies and express opinions as to the integrity and compliance of a broad range of building and safety issues – and this extension of duties and responsibilities has been a growing concern for REINSW.
According to Michelle McLean, Senior Property Manager at Leah Jay and Chair of the REINSW Property Management Chapter Committee, property managers provide a high-quality service within their specific areas of expertise, but landlords need to be more aware of their own responsibilities – and the new Landlord Information Statement will help boost this awareness and compliance.
“Requiring landlords to acknowledge that they’ve read and understood the Landlord Information Statement will be a great benefit,” she said.
“Consider smoke alarms, for example. How often do you hear ‘I’m not going to pay for an annual check’ or ‘why do I need to pay for someone to replace the alarm, can’t I just do it myself?’. The Landlord Information Statement will clearly set out the landlord’s rights and obligations, which will give property managers something to point to when a landlord questions a request.”
On and from 23 March 2020, all property managers need to ensure they understand the law when it comes to the Landlord Information Statement. Importantly, you need to know what’s contained in the statement and have processes in place to ensure all your landlords acknowledge it. Without this acknowledgement, landlords cannot enter into a residential tenancy agreement.
A new section 31A has been inserted into the Residential Tenancies Act 2010 (NSW).
This section will prohibit a landlord from entering into a residential tenancy agreement without acknowledging that they’ve read and understood the contents of the Landlord Information Statement.
Where the landlord engages the services of a property manager, they must provide a written statement to the property manager that they’ve read and understood the Landlord Information Statement. Only then can the property manager sign the relevant acknowledgement in the residential tenancy agreement on their landlord’s behalf.
A new field to be signed by the landlord (or by the property manager on the landlord’s behalf) is included in the updated standard form of residential tenancy agreement set out at Schedule 1 to the Residential Tenancies Regulation 2019 (NSW). This field is where the landlord (or the property manager on the landlord’s behalf) acknowledges that the landlord has read and understood the Landlord Information Statement.
The Landlord Information Statement includes information about the landlord’s rights and obligations at the start of a tenancy:
The Landlord Information Statement also includes information about the landlord’s ongoing responsibilities during the term of the tenancy, including:
Further, the Landlord Information Statement sets out information about ending the tenancy, including:
Like the Tenant Information Statement (which replaces the New Tenant Checklist), the Landlord Information Statement is an approved form and published by NSW Fair Trading.
Michelle said REINSW lobbied for this new Landlord Information Statement for many years.
“The New Tenant Checklist (now the Tenant Information Statement) has always been a useful tool for tenants and, similarly, we’ve long held that there should be a similar tool for landlords,” she said. “It’s essential for landlords to be better informed and educated about their responsibilities under the residential tenancies framework and other legislation, including the condition of the premises and their obligations regarding various statutory matters.
“All too frequently, landlords are not aware of their responsibilities and the Landlord Information Statement will go some way to addressing this issue. It will provide property managers with another important tool when communicating with their landlords.”
The standard form of residential tenancy agreement states that: “The landlord acknowledges that, at or before the time of signing this residential tenancy agreement, the landlord has read and understood the contents of an information statement published by NSW Fair Trading that sets out the landlord’s rights and obligations.” (emphasis added)
So how do the words “at or before” translate into practice?
“As property managers, will we need to obtain a written statement from our landlords that they’ve read and understood the Landlord Information Statement every time a new lease is entered into and for every renewal?” Michelle asked. “Or will it be sufficient to obtain that written statement only once when they engage our services?”
Michelle said that REINSW sought clarification from NSW Fair Trading on this point.
“NSW Fair Trading has advised that we do not need to obtain a written statement from the landlord acknowledging that they have read and understood the Landlord Information Statement every time they enter into a new residential tenancy agreement,” Michelle explained.
“Rather, we only need to confirm that they have read and understood the Landlord Information Statement in order to sign the acknowledgment in line with section 31A(2) of the Residential Tenancies Act.”
Michelle said that NSW Fair Trading also advised that section 31A of the Residential Tenancies Act only applies to new residential tenancy agreements entered into on or from 23 March 2020.
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