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What ground rules should you set for your tenants?

1st October 2015
Just like well-implemented school rules help create well-behaved students, rules for tenants help create a better tenancy.

Just like well-implemented school rules help create well-behaved students, rules for tenants help create a better tenancy.

Ground rules for tenants are important: they let everyone know where they stand, and what their obligations are.

Think back to your school days: there were rules in place that dictated how you behaved. These rules might govern things such as clothing/uniforms, how to behave in public, smoking, and more.

And there was probably one teacher you never dared to challenge, because they were strict and stuck to any threats of punishment. Yet there was another teacher where you knew you could get away with breaking a rule or two.

What do schools have in common with landlords?

Schools and landlords both represent the ‘establishment’, i.e. the party that sets the rules. And tenants are the equivalent of the students that are expected to stick to the rules.

In property management, you need to be the ‘strict’ teacher. Which means not only setting those all-important ground rules, but also sticking to them.

So what are the ground rules for tenants in property management?

The ground rules for tenants in property management are:

  1. The requirements of the RTA (Residential Tenancies Act 1986);
  2. The terms in the residential tenancy agreement; and
  3. Any communications you have with the tenant at the application stage, and at the point of offering the tenancy to them.

The Residential Tenancies Act

If you’re not already familiar with the RTA, you can read it here.

The residential tenancy agreement

The tenancy agreement needs to be specific about any issues that the tenant must not contravene. Here are some examples from the Bridgman Property Management Tenancy Agreement:

Liability

“The tenants hereby agree that they are jointly and severally liable to the landlord for any debt due to the landlord and for the performance of any covenants.”

This protects the landlord, as he/she has more ‘names’ to pursue in the event of liability or debt due. If there are 3 residents paying rent then you should have them all (not just one) on the tenancy agreement as tenants.

This means that for any damage or rent arrears then all 3 tenants are responsible.

This would not be the case if the landlord had just one name on tenancy agreement, as tenant.

Every property manager or landlord has had tenant disputes where each tenant said they didn’t do it or it was someone else’s fault. By including the jointly/severally liable clause, all tenants are responsible. This means when the tenancy tribunal has issued a monetary order, you have a number of targets to pursue.

Authorised vehicle parking

“The tenant agrees to keep the garage or carport free from oil drippings and if necessary the tenant agrees to supply and use a drip tray.”

This is often overlooked, but even late-model cars can drip oil! Put the responsibility on the tenant to avoid the oil drips, rather than try and deal with a stained garage floor when the tenant is about to move out. After all, a tenant’s motivation level is at the lowest point in the last week of their tenancy so getting problems fixed at this point may be challenging. It’s best to avoid such problems in the first place.

Subletting

“The tenant agrees not to assign, sublet or part with possession of the premises belonging to the landlord.”

You need to know exactly who is living in the property, so you know who is responsible for paying the rent – and for any damage. This is absolutely vital.

Repairs

“The tenant agrees to notify the landlord as soon as possible after the discovery of any damage or the need for repairs. The tenant shall not arrange any maintenance or repairs without the landlord’s prior consent.”

It is really important that all your tenants understand that you rely on them to advise if/when a repair needs to be undertaken.

Likewise, if an accident happens (i.e. damage) they need to contact you so a repair can be made. We always use an example of spilled wine on the carpet, we say that it is important that the tenant does not try to clean it off but we will get a carpet cleaner out.

Alterations

“The tenant agrees not to make any alteration to the premises nor to drive nails or screws into the walls nor affix any kind of adhesive tape or blue tack to the walls. The tenant agrees not to deface or damage any walls, floors, woodwork, stonework, ironwork or any of the landlord’s fixtures and fittings. The tenant agrees to use only the ‘Command’ brand picture hanging system for hanging pictures.”

This is a ‘biggie’; you don’t want tenants making any modifications to the premises. When an accident/damage occurs, we would recommend that you use your own approved tradesman to make the repair.

Of course, you will need to present the tenant with a quote and receive payment from them prior to your tradesman starting.

Don’t be tempted to let the tenants complete the repair themselves; this may be to a different standard to what you intended!

Remember you are always aiming for a very smooth transition from something being damaged to the item being repaired – and at the tenant’s cost.

Your communications with the tenant

So far we’ve covered the ground rules for tenants  – but the key is in implementing them. It’s a bit like the relaxed schoolteacher not implementing the school rules and not being respected. You need to be like the strict teacher, who was always obeyed.

The key here is to lead from the front, and walk the walk.

If you say one thing but do something else, you’ll appear ‘flaky’ and weak – i.e. someone that can be taken advantage of. For example, it’s no good reinforcing cleanliness issues if you haven’t cleaned the property well for the new tenant. Likewise, it won’t reflect well on you if the tenant finds that the stove element or lounge lights aren’t working at the beginning of the tenancy.

Of course, there’s always the scenario where something worked perfectly last time you saw it, and then (as Murphy’s Law would have it), the tenant moves in and it no longer works. In that situation, ensure you get the problem fixed quickly. That way you’ll demonstrate to your tenant that their new landlord completes repairs promptly.

Summary

  • You need to set some ground rules for your tenants.
  • The ground rules for tenants in property management are:
  1. The requirements of the RTA (Residential Tenancies Act 1986);
  2. The terms in the residential tenancy agreement; and
  3. Any communications you have with the tenant at the application stage, and at the point of offering the tenancy to them.
  • You need to stick to the rules and enforce them – and also lead from the front.

 


 

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