Making Rental Property Home Housing Studies – Assessment And Activities

When completing your assessment

Discuss About The Making Rental Property Home Housing Studies.

The information and resources that can assist you in answering the questions in this assessment can be primarily sourced from the learner guide and supporting resources for ‘Identify Legal and Ethical Requirements of Property Management to Complete Agency Work (CPPDSM4007A)’, located on your eLearning platform. You may also be required to conduct some independent research.

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This assessment is your opportunity to demonstrate your competency in the following unit:

CPPDSM4007A

Identify Legal and Ethical Requirements of Property Management to Complete Agency Work

The activities contained in this document are outlined below.

Part 1: Short answer questions

• This section consists of 9 short-answer questions.
• Question 2, 3, 5, 6 & 7 consist of multiple parts.

Part 2: Case study

• This section consists of 2 questions based on a provided scenario.
• Both questions consist of multiple parts.
• Question 2 (d) requires the completion of 3 industry forms.You can access these forms in the supporting resources for your state. Where available, also refer to any other handouts/factsheets in your supporting resources on how to complete the forms.

If you have any questions about this assessment you can email us at [email protected] You can expect an answer from one of our technical advisers or student support staff.

Part 1: Short-answer questions

In your own words explain why effective communication skills are so important when managing property on behalf of landlord clients.

Being that agents are the mediators between the landlord and the tenants, they need to have effective communication skills for them to win new tenants and to update the landlord about everything happening with the rental property (McIntosh, Davis, Luecke & American Management, 2008). Clients need a clear, to the point, and honest information about the property they are yet to occupy, and with effective communication skills that is so easy to achieve.

(a) Name the main legislation in your state/territory (state the name of the Act as well as any Regulations related to this Act where relevant) that covers residential tenancy matters and which statutory authority administers this legislation.

Note:If you are in the ACT, the body that covers residential tenancy matters and administers this legislation is a Government body not a Statutory authority.

YOUR STATE	The main legislation in your state that covers residential tenancies	Statutory authority that administers this legislation
New South Wales	Residential Tenancies Act 2010 under Victorian Government or VIC legislation.	Community Legal Centres NSW (CLCNSW).

(b) Where within your state’s legislation can you locate the ethical and conduct standards applicable if you were working in property management? List two (2) of these conduct standards.

Note: Not all states have a separate rules/code of conduct legislation. If this is the case for you, refer to the main legislation in your state governing agency practice. This legislation will cover an agent’s responsibility and conduct requirements. Identify two (2) requirements from the agent legislation in your state that relate to property management.

YOUR STATE	Where specifically within your state’s legislation can you locate information regarding the ethical and conduct standards in relation to property management?	Provide two (2) examples of these conduct standards that are specifically relevant to property management.
North South Wales	Property, Stock and Business Agents Regulation 2003.	· Clients will be getting the offers in the verbal as well as written format. They will have a detail instruction about the property in order to avoid any kind of miss selling or miss guidance.   · There should be a prompt response to all the requests of the tenants for the purpose of maintenance and repairs. Landlord should immediately respond to the tenants in this regard to avoid any kind of issues as a result of miscommunication.

(a) What is the name of dispute resolution body for residential tenancy disputes in your state?

NSW Civil and Administrative Tribunal (NCAT).

(b) Name two (2) types of disputes that you may need to use this body to resolve?

The two types of disputes to use this body to resolve are, · Commercial or retail lease disputes. · Disputes between the tenants.

Explain the process for taking, processing and releasing a rental bond in your state by completing the table below, including:

• The maximum amount that can be required from a tenant
• Any legislative requirements restricting when the bond can be required from the tenant
• What the managing agent must do with the rental bond upon receiving it, including stating the statutory authority that the bond must be paid to, any prescribed forms for lodgement and any time frames to do so.
• The process for releasing the rental bond, including when the rental bond should be released, any prescribed form/s to be used and any time frames involved.

YOUR STATE	Maximum amount that can be required from a tenant	Any legislative requirements restricting when the bond can be required from the tenant	Statutory authority bond must be paid to and any forms and time frames to pay to statutory authority	The process for releasing the rental bond, including when the rental bond should be released, any prescribed form/s to be used and any time frames involved.
NSW	Under the VIC legislation rule, the tenants will be charged with the one month rate of the property. That rate will be charged from the tenant when the weekly rate is less than or equal to $350. This rental bond must be deposited to the landlord or the authority of the residential property. The rental bond is generally paid within the 10 business days.	When the residential tenancy bond is over, the amount of the rental bond should be paid back to the tenant. There should be an agreement paper duly signed by both the parties. The amount of the rental bond can be claimed by the landlord if the property is damaged or any kind of serious losses is caused by the tenants. A cleaning cost is also reduced form the rental bond of the property.	The bond must be paid within the three days of occupying the property. There will be two signed copies and one of those two copies will be kept by the tenants and other copy will be provided to the landlord. A condition report should also be given to the tenant before the tenancy of the premises. That condition report will be returned back to the landlord on the next day, after signing it properly.	· First of all, the rental bond must be deposited to the landlord within 10 business days and it should be lodged online in the RTBA website.    · If the deposited bond is received by the authorities of RTBA then it will send a deposit notice to both the landlord and the tenants. · The rental bond is released after the completion of the period of occupying the premises by the tenants. It is released after a detailed check up if the property has been damaged or not. After transferring bond, a receipt should be hand over to the tenant for the future security.

Saving your work

(a) Explain the difference between a fixed term tenancy and a periodic tenancy, and how this impacts on the potential sale of the rental property.

A fixed term tenancy has a definite commenment date and expiry date, while a periodic term tenancy has a commencement date with no expiry date. In a fixed term tenancy, a tenant cannot give a notice to end the contract as stated under Residential Tenancy Act 1995 (SA), except where there is a breach of contract by the landlord. In investors point of view, a negative aspect of periodic agreement is that at the end of tenancy, the owner must give 28 days notice to the tenant for them to get vacancy possesion, while the tenant is only required to give 14 days notice.

(b) Can a rental property be sold during a fixed term tenancy, and if so, on what basis?

Yes a rental property can be sold during a fixed tenancy. The landlord must give a 14 days notice to the tenant. Because of early termination, the tenant will not have to compensate the landlord.

(c) In the event that a rental property is being sold, what is the legislative requirement in your state regarding providing notice of the sale and gaining access to show the property to prospective buyers?

Note: WA, VIC & TAS, do not have legislative requirements for providing notice to tenants of the sale of the property. If you reside in one of these states, please write ‘nil’ in this column.

YOUR STATE	Legislative requirement for providing notice to tenant of sale	Legislative requirement for gaining access to show new prospective buyers
New South Wales	Nil. This is because, under the rule of VIC legislation, it is not required to have any legislative requirement in order to provide any notice to all the tenants for the sale of the property. Without any legislative requirement, it is possible to provide notice to the tenants for the sale of the property under this legislation. New South Wales is the residing state here, which falls under the category of VIC legislation, so there will be no any legislative requirement in order to provide the notice to the tenants to sale the property.	· At the time of tenancy, there may be requirement for the landlord to have the access of the premises. To show the new prospective buyers, some legislative requirements are needed in order to gain the access. The tenant has the right to state the time when the new buyers are allowed to visit or enter the premises. Even though, the landlord owns the premises, but still, the tenant has the right in this regard. So, it means, the tenants have the right to say who and when the prospective buyers of that property will be allowed to enter the premises to see the property.   · But, in the case of some emergency, that is, if the guest or occupant is seriously injured, or in imminent danger then without the consent of the tenant they can enter the premises under this legislation. In some other circumstances, a notice before 24 hours should be issued to the tenants to have their consent to give access to enter the premises.

Your agency manages a property on behalf of a landlord and charges them 7.7% including GST. The property is signed up on a 12 month tenancy for $400 per week rent.

(a) How much is the agency going to attract in management fees over this twelve month period (given that the tenants stays in the property for the full 12 months)?You must show your calculation of how you arrived at this figure.

= (7.7/100 * 400) = 30.8 * 4 * 12 = 1478.4

(b) List two (2) other fees that might also be charged by your company as managing agent (besides the management fee stated above).

· Advertising cost · Preparing the tenancy agreement cost

(a) List two (2) reasons why a landlord may want to terminate the tenancy agreement they have with their tenant.

The landlord may want to terminate tenancy agreement if: · The tenant has breached the tenancy agreement. · There are serious damage to the premises or neighbouring property by the tenant (Wiesel & Pawson, 2015).

 (b) Describe the procedures involved when a managing agent needs to terminate a lease and have the property vacated, including any documentation required, and how the documentation needs to be served on the tenant.

The managing agent must: · Give a termination notice to the tenant that is signed, dated, properly adressed to the tenant, sowing the ending day of tenanacy by which is required to vacate, the reasons for termination, and all should be in writing. · The minimum period of notice should be 14 days if: o  the tenant has commited breach of tenance o 30 days if the agreement of the fixed term is due o 30 days if the premises if the vacant possession is required by the new buyer after the fixed term has ended according to the terms sale contract or, o 90 days if there no new agreement provided after the fixed period has expired.

(a) Explain the purpose of a managing agent preparing a financial statement for the landlord of a managed property.

The reason why the managing agent prepares a financial statement for the landlord is because they have a wider knowledge of the income and expenses of the property than the landlord being that they in charge of the property finances (Cain & Forell, 2011). They collect the rental payments on the behalf of the land lord, provide receipt, and deposit the rent into the property management account.

(b) List four (4) items that may be contained in a rental statement to a landlord for their managed property.

· Rental payments · Rental arrears report · Repairs and maintenance · Periodic inspection reorts

Imagine that you needed to lease the particular property that you are currently residing in. Identify three (3) different strategies for marketing this property for lease and explain why you think each of the strategies you have nominated would be appropriate as a way of marketing the property.

The strategies for marketing property for lease may include: · On-line advertising · Using real estate portals · Print media On-line advertising is appropriate for marketing the property because it enables numerious people to engage and engage with the property. Real estate portals are vital because most of the potential tenants use online as their tool to search for properties (Palmer, Instone, Mee, Williams & Vaughan, 2015). On the other hand, print media such as newspapers help those people who are no so active on the social media to or those who did no know they were searching for a property until they found the right property.

You’ve recently been employed in the property management department of a relatively new agency that has opened up in your area. They are a busy agency for property management and their rental property portfolio has grown rapidly over the last year since the agency opened. In your new role, you are going to be responsible for leasing properties and carrying out inspections, so you will need to regularly access the keys for the rental properties your agency manages. You have noticed that the key management system the agency is presently using is quite disorganised and messy. Keys for properties managed by the agency have gone missing and no one seems to know where some of these keys have gone.

Submitting the assessment

(a) Explain the risks associated in this scenario with not maintaining and keeping a key register appropriately, including possible consequences to all the parties (the tenants, landlords and your agency) if key security is compromised.

The tenants may sue landlords or the agency based on the orders of reasonable security, compensation, rent deduction, and locks and keys. It can also lead to insecurity of the tenants from robbers and other intruders. · The property theft may take place · Keys can be duplicated by thieves or stalkers · Tenants injury can happen

(b) Outline the basic way you would set up and maintain a key system including maintaining a register of keys held by the agency and a process to ensure that keys are kept secure.

· Avoiding handing out of keys · Photocopy both the keys handed to the tenants · Keeping key register safe · Keeping records of the key in and out register · Landlords should retain the complete set of keys

Your agency is approached by a landlord Ms Annette Peppertree, to list her property for lease and ongoing management.

The details of her property are:

Landlord details:

Landlord name: Annette Jayne Peppertree

Landlord Address: 11/23 Ross St, Elsewhere 1245

Tenant details:

Tenant Name: Mr John Doe

Tenant’s address: 6 Warra St, Somewhere 1234 (current address. i.e. where he is moving from):

Additional note: John Doe will be occupying the property with his son, who is 10 years of age.

The details of the managing agency are:

Agency name: ABC Pty Ltd Trading as ABC Real Estate (note: when stating agent details in forms, use the full details of the agent including corporation name and trading name)

Agency address: 10 Railway Street, Somewhere 1234

Agency ABN: 12345678

Agency Licence No: 123456

Rental property details:

Property Address: 15 Verity Street Somewhere 1234

Property description: 3 bedroom house with single lock up garage

Rental amount: $400 per week(paid fortnightly)

Length of tenancy: 12 months (note: a 12 month tenancy is 365 days. E.g. if the start date is 01/01/16 then the end date is 31/12/16)

The landlord authorises for the agent to refer back to them for instructions prior to signing a further tenancy agreement after the end of this fixed term period.

• Leasing fee is equivalent to one week’s rent.
• The management fee that the agent is asking is 7.7% including GST.
• The landlord authorizes the managing agent to have a budget of $1000 to spend on repairs and maintenance without having to go back to the landlord for approval.
• The landlord authorises the managing agent to pay council rates, water rates and repairs and maintenance invoices from the rental income

Following on from your marketing the rental property, you locate a tenant by the name of John Doe, who wishes to apply for the property.

(a) Explain the process of how you would decide whether this tenant should be approved as the new tenant for this rental property. Ensure that you cover the Application for Tenancy and appropriate checking of references in your response.

The process of deciding whether a tenant should be approved will depend on the surety that the tenant has appropriate forms of ID. Such identifications may include: · Tenant reference · Employment contract or the current payslip · Bank account statements within the last three months · Driver licence · Tax return statement · Passport · Vehicle registration papers · Credit Card · Phone bill, water bill, rates notice among others.

(b) The prospective tenant Mr John Doe wants to have the property kept for them until he can move in. Explain the legislative requirements in your state related to the payment of any fee (such as a reservation fee or holding fee) prior to the tenant signing the tenancy agreement. Complete the table below by outlining:

• What such fees called in your state; and
• What the legislative requirements are with regards to asking or accepting these fees including:

– Is this fee allowed in your state?

– Is the amount refundable if the tenant does not proceed to lease the property?

– Timeframes associated with the fee?

YOUR STATE	What are such fees called in your state?	What are the legislative requirements with regards to asking or accepting these fees? [refer above bullets]
New South Wales	Holding Fees	The fee is allowed in NSW and the maximum that can be charged for holding fee is 1 week’s rent. It is credited when the tenancy begins towards the first rent payment. The fee can only hold the premises for only 7 days (Wiesel & Pawson, 2015). However, may agree for the extension of the period beyond 7 days.

 (c) List the amounts that this new prospective tenant MR John Doe will need to pay upon signing his tenancy agreement, including

• the amount of rental bond
• the amount of rent in advance
• any other fees payable by the tenant.

YOUR STATE	Bond	Rent in advance	Any other fees payable by the tenant
New South Wales	$1600 because it is the same as 4 weeks’ rent.	$800 – because it is the same as 2 weeks’ rent	The tenant is not required to pay any upfront fees.

(d) Using the details provided in this case study, prepare and complete the following documentation for this tenancy (ensure all required fields, including signatures are completed):

• A residential tenancy agreement
• A rental bond lodgement
• A condition report

You may assume or use hypothetical information which hasnot been provided to you in the case study details, to complete the required forms.

Ensure that you use your state specific forms which are located in your supporting resources for this subject on the eLearning platform. In the case of the condition report, complete this on the property that you are living in, as if it were the rental property in the case study.

(Please note, generally the agent WOULD NOT sign the tenancy agreement on behalf of a tenant, nor the management agreement on behalf of the landlord. For training purposes only, this question requires you to include mock signatures to demonstrate thatyou know where relevant parties would sign)

(e) List the documentation, including any prescribed forms or fact sheets required by your state’s regulatory authority, that you would have to provide to the new tenant at (or immediately prior to) signing the tenancy agreement?

YOUR STATE	What documentation (including any prescribed forms or fact sheets) must be given to the tenant at or immediately prior to signing the tenancy agreement?
NSW	At the beginning of the tenancy, the landlord must provide the following documents to a tenant: · A copy of the property information · A copy of lease (tenancy agreement) · Two copies of the property condition report · An invitation to lodge the bond by the use of Rental Bonds Online or by signing a lodgement form · Keys to the new premises

 

References

McIntosh, P., Davis, J. H., Luecke, R., & American Management, A. (2008).Interpersonal Communication Skills in the Workplace.

Cain, M., & Forell, S. (2011). Recruitment and Retention of Community Sector Lawyers: Regional Differences within New South Wales. Deakin law review, 16(1), 265-284.

Easthope, H. (2014). Making a Rental Property Home. Housing Studies, 29(5), 579-596.

Palmer, J., Instone, L., Mee, K. J., Williams, M., & Vaughan, N. (2015). Green tenants: practicing a sustainability ethics for the rental housing sector. Local Environment, 20(8), 923-939.

Wiesel, I., & Pawson, H. (2015). Why do tenants leave social housing? Exploring residential and social mobility at the lowest rungs of Australia’s socioeconomic ladder. Australian Journal Of Social Issues (John Wiley & Sons, Inc. ), 50(4), 397-417.