Holding fees
At present, there are a number of issues that can arise for landlords in connection with the acceptance of holding fees.
One issue is that a holding fee currently binds the landlord to the approved applicant, but does not bind the approved applicant to the landlord. The landlord is effectively obliged to take the property off the market, but the applicant can withdraw their application at any time before the agreement is signed. This means that the landlord misses the opportunity to consider other potential tenants during the holding period.
Another issue is that accepting a holding fee prior to an existing tenant vacating the premises can leave the landlord liable to pay temporary accommodation costs for a new tenant if the property is not vacated on the agreed date.
These issues need to be resolved in the revised legislation.
Recommended: If the holding period exceeds seven days, the holding fee should be able to be increased to the equivalent of a maximum of 14 days’ rent.
Recommended: If a holding fee is accepted prior to the existing tenant vacating the premises, the fee should be subject to the existing tenant vacating (as the tenancy agreement will not be able to be signed until after the tenant vacates). A holding fee equivalent of a maximum of 14 days’ rent should be payable in these circumstances.
Recommended: If the approved applicant fails to sign the tenancy agreement within the seven day holding period or by the original agreed signing date (whichever is earlier), the landlord can give notice that the property is being placed back on the market. In such a case, the holding fee will be forfeited by the approved applicant.
Rental bonds
Without doubt, there are aspects of the bonds regime that need to be modernised to meet the needs of the current marketplace.
Maximum bond amount
The current maximum bond of four weeks’ rent does not provide for an equitable balance between the landlord and the tenant. Legislation in other states recognises that there are circumstances where a higher bond is necessary.
Recommended: The legislation should provide for the ability to apply a bond of six weeks’ rent where the premises are furnished or the rent is more than $450 per week.
Bond top-up
Where a tenant has leased a property for a number of years, the bond will no longer be in line with the market. This creates difficulties for landlords who need to carry out repairs at current market prices when the tenant vacates.
Recommended: A bond top-up option be allowed where a tenant has occupied a premises for more than three years. This not only protects the landlord, but also the tenant by ensuring no financial hardship or surprise in relation to the bond amount when finding a new premises.
Pet bond
Prospective tenants with pets are often overlooked by landlords.
Recommended: To level the playing field for all prospective tenants, a pet bond should be introduced. Prospective tenants regularly offer to pay landlords a pet bond, even though the legislation does not currently require it.
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Rental arrears
The current provisions relating to termination for rental arrears and late payment of rent do not strike the right balance between the interests of the landlord and those of the tenant.
Termination
The timeframe whereby a landlord has to wait for 14 days to elapse before serving a termination notice for non-payment of rent is excessive. By the time a hearing at NCAT is heard, the tenant is in significant arrears which can result in hardship for the landlord.
Recommended: As the tenant protections under the Act allow them the opportunity to rectify non-payment of rent, REINSW believes the landlord should be able to serve a termination notice for non-payment of rent after seven days, rather than waiting 14 days. This will create a more equitable balance.
Late fees
Unfortunately there are tenants who routinely manipulate the system by being 13 days in arrears, and a late fee may encourage these tenants to pay on time.
Recommended: The introduction of late fees for rental arrears should be considered. |
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