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Renting in Canberra – nothing but trouble?

By 21 September 2010 78

for lease

There’s been plenty of previous discussion on RA around issues for renters in Canberra. There are plenty of stories of tenants who are kept in the dark about their rights, or treated by their landlords or property managers as second class citizens. 

On the other side there’s plenty of times when a landlord either has issues with their tenant, chosen agent, or when self managing they have no one to turn to for advice - sometimes leading to poor decisions which can create unwanted conflict with the tenants. No one is perfect, and it’s always tough to manage conflicting priorities that involve someone’s home.

Who’s offering to help? Tenant’s Advice Service can be useful if you can catch them during their limited availbility (and only if you’re a tenant!), the tribunal will give you a definite answer after taking your time, money and giving you a headful of frustration. Why are there no other places for people to turn when they are dealing with these issues?

I’ve been in property management for a while now and I wouldn’t dream of saying that I know it all or that I’ve seen it all… but I want to be part of the solution, not part of the problem. What issues are you facing with your Canberra rental property?

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78 Responses to Renting in Canberra – nothing but trouble?
#1
davecdp2:33 pm, 21 Sep 10

We have decided to sell a rental property and the tenants lease runs out in February. How much notice am i required to give them? How much notice would you (or the rest of you) recommend i give them? i know availability is at its worst just before and just after Christmas and they have been great tenants so i’m happy to make this as easy for them as i can.

#2
Woody Mann-Caruso2:47 pm, 21 Sep 10

What issues are you facing with your Canberra rental property?

Property managers who demand 7% of a weekly rent that’s more than double what it was ten years ago for doing less work.

#3
Property Manager3:00 pm, 21 Sep 10

davecdp said :

We have decided to sell a rental property and the tenants lease runs out in February. How much notice am i required to give them? How much notice would you (or the rest of you) recommend i give them? i know availability is at its worst just before and just after Christmas and they have been great tenants so i’m happy to make this as easy for them as i can.

You need to give them a minimum of 8 weeks written notice AFTER their lease ends, meaning they won’t necessarily be moving until some time in April, by which time the market is typically a little more tenant friendly.

Remember, they can leave at any time after their lease expires by giving you 3 weeks written notice.

I would think that 8 weeks formal notice is usually enough for a good tenant to find a new place, but you could give them the heads up a little in advance – as long as you can deal with them moving out before the 8 weeks is up if they find a great place quickly.

#4
Property Manager3:08 pm, 21 Sep 10

Woody Mann-Caruso said :

What issues are you facing with your Canberra rental property?

Property managers who demand 7% of a weekly rent that’s more than double what it was ten years ago for doing less work.

Based on your example of 7% a property that takes in a rent of $2712.60 per month ($500pw) would cost a tick over $150/month in agent fees; a cost which is tax deductible. Assuming you already have a full time job, why would you question that cost to have someone spend their entire working week looking after your rental investment?

If you don’t think that’s value for money you need to find an agent that is actually worth the money they are being paid. I’m not going to target any particular agents, but there are good and bad as in most industries. The bad ones make it harder for the rest of us to impress – and some of us relish that challenge.

#5
davecdp3:09 pm, 21 Sep 10

Thanks for the advice.

#6
rosscoact3:15 pm, 21 Sep 10

Woody Mann-Caruso said :

What issues are you facing with your Canberra rental property?

Property managers who demand 7% of a weekly rent that’s more than double what it was ten years ago for doing less work.

I pay 10% and have no problem with it.

#7
Genie3:18 pm, 21 Sep 10

Based on your example of 7% a property that takes in a rent of $2712.60 per month ($500pw)

I think your maths is off.

Wasn’t aware of a month being 5 1/2 weeks.

#8
Property Manager3:44 pm, 21 Sep 10

Genie said :

Based on your example of 7% a property that takes in a rent of $2712.60 per month ($500pw)

I think your maths is off.

Wasn’t aware of a month being 5 1/2 weeks.

Sorry, a typo – $2172.62 is the monthly figure.

#9
colourful sydney rac3:54 pm, 21 Sep 10

In my experience as a tennant property managers do not “spend their entire working week looking after (a) rental investment”.

They do the absolute minimum. They are A grade bullies to tennants and take up valuable oxygen that other people could breathe.

#10
enrique3:54 pm, 21 Sep 10

LANDLORDS (i.e. davecdp)

If you’re a landlord and you’re coming to a public internet forum/chat room for legal advice then you deserve all the trouble you end up with.

First, read this… http://www.legislation.act.gov.au/a/1997-84/default.asp

If it’s too much for you to understand then get a property manager.

If your property manager isn’t able to deal with issues/problems for you then why are you paying them? Get a new property manager.

If all else fails, pay a solicitor.

Why mess around when you’re dealing with investments worth hundreds of thousands of dollars?

TENANTS

If you think you’re being “kept in the dark” don’t sit around and do nothing…

First, read this… http://www.legislation.act.gov.au/a/1997-84/default.asp

And the stuff here… http://www.ors.act.gov.au/rentalbonds/WebPages/rentalbonds_publications.html

These people are here to help… http://www.tenantsact.org.au/

ALL

Tenants and Landlords are both parties to a legally binding agreement. Take a bit of time to inform yourselves of the terms & conditions of your agreement and your rights & responsibilities. Read the legislation. If it’s too hard to understand seek professional advice.

#11
trix3:58 pm, 21 Sep 10

To be honest, if you are a landlord and you have no clue how much notice you should be giving your tenants, you should probably get out of the game.

Too many people think they can make a quick buck, or it’s an easy form of investment. But you do have to follow the law. Not every Tom, Dick and Harry can be a company director – you have fiduciary obligations, and ignorance is no defence. As far as I’m concerned, owning rental property is no different to running a small company.

#12
Rangi3:59 pm, 21 Sep 10

Property Manager said :

Woody Mann-Caruso said :

Assuming you already have a full time job, why would you question that cost to have someone spend their entire working week looking after your rental investment?

Now I don’t think you would spend your whole week looking after my property for $150, I am almost sure you would devote some of the week to looking after one or two other peoples properties.

After years of managing our property ourselves we have switched to a manager and it is worth every cent to do away with the hassle of monitoring rent, etc

#13
Property Manager4:15 pm, 21 Sep 10

#9 – Colourful Sydney…:
Your attitude is indicative of the broader problem that I am trying to provide assistance with. I don’t disagree that there are lazy property managers out there who bully and do little to assist – but show me an industry where there aren’t good and bad operators. I’m sure you could offer some thoughtful and relevant insights to the issues faced by tenants that would help everyone understand things better, but instead your comment offers nothing constructive – you really are missing an opportunity to add something of value.

#10 – Enrique:
I agree with all of your comments, but while an internet forum is not substitute for either being properly informed as a self-manager or engaging a professional, I am simply trying to assist all parties with professional advice. The last thing I want is to push people away from professional management (I’ll be out of a job), but trying to minimise the incidence of unnecessary conflict doesn’t seem like a disservice to anyone. Further, I want to demonstrate that there are professionals in the industry who know what they are doing and aren’t afraid to actually do some work.

#11 – Trix:
Probably true, but there’s plenty of reasons why investors choose to self manage – many of these reasons revolve around numerous bad experiences with previous agents. I too believe that owning an investment property is in fact a business; but it’s worth remembering that on the other side it is someone’s home.

#14
Deano4:16 pm, 21 Sep 10

Woody Mann-Caruso said :

Property managers who demand 7% of a weekly rent that’s more than double what it was ten years ago for doing less work.

Which property managers are quoting 7%??? I recently had one quote me 11%!

#15
colourful sydney rac4:21 pm, 21 Sep 10

@ #12. I will try again.

My relevant insight is that property managers, in my experience, take up valuable oxygen that other people could breathe.

My constructive comment is that if we deprive them of oxygen there will be more to go around.

#16
Woody Mann-Caruso4:24 pm, 21 Sep 10

why would you question that cost to have someone spend their entire working week looking after your rental investment?

The entire week? Looking after my investment? You make it sound like you sit there watching the house on a hidden camera, fretting all the while. Well pull the other one, it plays Holiday in Cambodia.

1. Start of tenancy. Put ad in allhomes. Watch tens of applications roll in instantly. Pretend to undertake some sort of objective assessment of which is ‘best’ (ie, discard brown people, pick the white couple with the highest two incomes and no kids.)
2. Watch rent flow into bank account. If the little spreadsheet notices a two week gap with no money, print a form letter. F*ck it, automate it with a few lines of VB and get the receptionist to stuff envelopes.
3. Once every six months, walk through house and note that there’s dust on the laundry window sill, the oven could look a bit more like it was just installed and that the grass looks a bit brown. Send a notice first if you remember. Repeat at end of lease.
4. Every eight months or so, try to hit the tenant up for a rent increase. The worst that can happen is they know their rights and say no, so what’s to lose? Just hit them up on the anniversary of the lease with an enormous increase instead, and hope they can’t find the relevant CPI figures.
5. Go to 1. Lookit, I didn’t even have to start counting on my other hand, which is free to count all the money.

None of this has changed since 2001, except it’s easier than ever thanks to allhomes and a vacancy rate tighter than a fish’s bumhole. However, property managers’ fees have doubled in the same period, because they take a percentage. The job isn’t twice as hard. You’re not adding double the value. You’re just taking double off the top, trading on fear, uncertainty and doubt that some tenant will trash the place or skip town without paying rent – which you’re utterly powerless to stop until it’s too late anyway.

And just to make sure we’re all above board here – you’re not Jazz’s missus, are you? Because if there’s one thing Rioters love, it’s astroturfers.

#17
enrique4:29 pm, 21 Sep 10

Property Manager said :

I am simply trying to assist all parties with professional advice.

That’s mighty altruistic of you… something in the back of my mind asks why… I’m not sure what that niggling feeling is though…

#18
thehutch5:07 pm, 21 Sep 10

Property Manager said :

davecdp said :

We have decided to sell a rental property and the tenants lease runs out in February. How much notice am i required to give them? How much notice would you (or the rest of you) recommend i give them? i know availability is at its worst just before and just after Christmas and they have been great tenants so i’m happy to make this as easy for them as i can.

You need to give them a minimum of 8 weeks written notice AFTER their lease ends, meaning they won’t necessarily be moving until some time in April, by which time the market is typically a little more tenant friendly.

Remember, they can leave at any time after their lease expires by giving you 3 weeks written notice.

I would think that 8 weeks formal notice is usually enough for a good tenant to find a new place, but you could give them the heads up a little in advance – as long as you can deal with them moving out before the 8 weeks is up if they find a great place quickly.

I was of the impression that you can provide notice during a fixed term tenancy as long as it expires after the fixed term tenancy is due to expire.

#19
thehutch5:33 pm, 21 Sep 10

Without doubt there are a lot of bad property managers (and landlords)… but there are also a fair few bad tenants as well.

As a property manager (in a previous life), I found that most of the time when Tenants were unhappy, it was due to the Landlord being unreasonable… Although they might not have been acting illegally, they certainly didn’t want to act in a manner which most people would consider fair. This generally occurred when the landlord was too busy looking at short-term costs rather than the longer term benefit and won’t budge. On the flipside, when you get a tenant that is unreasonable, that also causes hell.

However, when you mix a good landlord (pro-active and reasonable), with a good tenant (pays rent, keeps the property clean & tidy) = life is good and you love dealing with those people. However sadly, there are a lot of people out there that shouldn’t own rental properties and people who can’t organise their lives in order to maintain a rental property (manage their money to pay rent etc)

In relation to property management, the main problems in the industry are that most agencies pay a pittance (hence miss out on good staff and have high turnover) and most agencies are run by sales agents who know nothing about property management, and if anything treat it with contempt (even though they need it). The other issue is the grey arears in legislation – where things are not properly defined.

#20
garner16:12 pm, 21 Sep 10

Can the landlord evict me if they want to sell my home?

Fixed Term Agreement

If you are in a fixed term agreement the landlord cannot evict you. Like you, they are committed to the agreement.

davecdp
Once the lease is up, it becomes a periodic lease. You have to give 8 weeks notice, tenants only have to give 3 weeks. Here is the info from tenancy advice.

Periodic Agreement

If your agreement is periodic, the landlord is able to issue a notice to vacate under clause 96(1)(d) giving you 8 weeks notice to move. If you are unable to do so the landlord must seek an order from the tribunal. Only the Tribunal can order an eviction (see Tenancy Tips: Eviction in the ACT).

#21
Property Manager6:33 pm, 21 Sep 10

#15: Thank you for removing any ambiguity in your early comment.

#16: I understand that is how it may look, but the comments from people who have happily changed from self-management to a professional agent are suggesting the opposite. I am sorry that your opinion on the value of property managers is so diminished, I hope that if you find yourself as a property investor at some point that everything is smooth sailing for your self-management so as to prove your comments. In response to your last question – I am not Erik’s wife, I have not (and have no intention of) disclosed which agency I work for, and just quietly I was quite amused to see Jazz ripped to shreds for ‘turfing.

# 17: Because you’re a cynic like many of us that frequent this site :) Fair question though, I would’ve been wondering the same. I have no intention of declaring which agency I am with, and I guess the primary motivation from a commercial sense is to demonstrate that there are agents with a clue who do their job well. If I can achieve this while answering questions and offering assistance that is fairly thin on the ground, is that a bad thing?

#18: Thanks Hutch. Davecdp could serve a Notice to Vacate on the tenants prior to the end of the lease, as long as he provides not less then 26 weeks notice, and provided the termination date is after the end of the fixed term lease. By this method he stands to have his house back maybe a month earlier. Of course you can market a property for sale with a tenancy in place and let the purchaser decide whether they need the property.

Another note on any notices (including termination notices) – make sure you allow 4 business days for postage, as per the Legislation Act. Without that your notices could possibly be declared void by the Tribunal.

#22
Property Manager6:48 pm, 21 Sep 10

#19: As always Hutch, well constructed comments and all valid.

#20: Your information is fairly accurate, but the following should be noted:
– As explained above the owner can serve a termination notice during the fixed term as long as they provide at least 26 weeks notice and the end date is not within a fixed term.
– During a fixed term the owner may apply to the tribunal for a termination and possession order (eviction) on the grounds of significant hardship. They need to prove their hardship would be greater if the tenancy continues than the hardship the tenant would face if it were to end. Pretty rare cases to the best of my knowledge.
– You are correct, the tribunal is the only body with authority to evict a tenant. Digging in your heels and forcing a landlord to the tribunal for an eviction order after they have issued a valid termination notice is not going to help anyone though. Chances are you will end up paying the owner compensation for any loss they have faced through your unwillingness to cooperate with the termination notice, unless you can provide a substantial and valid reason for not cooperating.

When any party digs in their heels and tests the limits of the legislation any chance of a reasonable outcome is all but lost, whether it’s the owner, tenant or agent who digs in, everyone pretty much loses.

#23
far_northact7:28 pm, 21 Sep 10

Ok. So as a tenant paying an above market rate (ie one bdrm in gunners 400wk). If I want to break lease 6 months early – landlord can charge difference between market rate (350wk) and what I’m paying, against me, for the next 6 months…. Assuming I find alternate tenant. Anyone know if this is legal? (fixed term 12 mth contract because no one in Canberra needs to be flexible?)

#24
enrique7:30 pm, 21 Sep 10

Property Manager said :

If I can achieve this while answering questions and offering assistance that is fairly thin on the ground, is that a bad thing?

Not at all, good on you for giving something back.

#25
imarty7:36 pm, 21 Sep 10

So what about advice on the best way to choose a property manager?

#26
toriness7:40 pm, 21 Sep 10

Woody Mann-Caruso said :

What issues are you facing with your Canberra rental property?

Property managers who demand 7% of a weekly rent that’s more than double what it was ten years ago for doing less work.

you’re lucky to only pay 7%. the standard is 10% or so i was told 5 years ago – i negotiated down to 8% because i was buying at the same time off same real estate agent.

#27
Jethro8:03 pm, 21 Sep 10

OP: The problem people have with real-estate agents and property managers (and hence the antagonism being directed towards you) is that they really do seem to be people who offer very little to our world (some might say you have a negative impact on society – having helped turn housing from a necessity of life that most people on a wage could aspire to, to nothing more than a nationwide Ponzi scheme that rips of both investors who are going to be wiped out when the housing bubble bursts and renters who are paying $350 a week for a 2 bedroom townhouse in Gordon or $400 for a 3 beddy in West Macgregor – to choose two examples from the cheapest end of the scale…. unbelievable really when you consider that the minimum wage is only $570). Yet estate agents are making an absolute fortune off of the fact that people need to live somewhere and are not confident that they can handle the arrangements themselves.

Your income to social value ration is unfortunately very lopsided.

I am sure you will reply with some passive-agressive condescending reply, as you have to the other people who have reacted angrily to the reminder that we live in a society that supports a real-estate industry.

#28
Property Manager8:25 pm, 21 Sep 10

#23: What you’ve described is the standard practice and in my experience would be supported by the tribunal. Essentially you’ve entered a contract and are seeking to break that contract. In doing so it is expected that you will leave the other party (the landlord) in no worse position than if you had fulfilled your contractual obligations. If applicable you are likely to also be invoiced for any advertising/re-letting fees that the owner has to pay the agent (up to one week’s rent). The Residential Tenancies Act (http://www.legislation.act.gov.au/a/1997-84/current/pdf/1997-84.pdf) supports such compensation in sections 62 and or 84 (depending on the situation), and this practice simply achieves the same result without forcing a pretty clear-cut case to the tribunal.

#25: Tough question. How do you get them to prove that they return phone calls, action requests, understand the tenancy legislation, can negotiate reasonable outcomes with tenants, be pro-active in caring for your investment and so on? It’s pretty easy to pay all that lip service, but so much harder to prove it. First, don’t be fooled by the one that guarantees a significantly higher rent – “buying” a management listing is illegal, but it still happens. Second, know what your expectations are and figure out some questions to see how they respond. In the end I can only suggest that you go with instinct. We’re all offering basically the same product at much the same price, so choose the agent you get the most workable rapport with.

#29
el9:49 pm, 21 Sep 10

Property Manager said :

(…)The last thing I want is to push people away from professional management (I’ll be out of a job),

Oh well, you could always go and sell used cars. Both occupations require a similar skillset: bastardry, dishonesty and a complete lack of ethics.

#30
FD1011:31 pm, 21 Sep 10

What issues are you facing with your Canberra rental property?

Actually getting a property. As student first-time male renters, it seems the entire rental world is against us. I have had property managers tell me that “I don’t rent to people like you”, implying that myself and my friends would be a worst case scenario which I highly doubt would be true. Frankly, I find it insulting that they make those assumptions without knowing anything about us.

Also, I’ve had property managers through agencies lie to my face about our application, which makes me wonder if they’re just out to waste our time.

Give us a chance!

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