Renting Out Your Property – Homeowners Rights and Responsibilities

Increasing numbers of homeowners are investigating renting out their property, as holding costs seem to be decreasing for many negatively-geared properties. Today we look a little deeper at the issues involved with renting out your home and the responsibilities and rights of landlords in Melbourne.

Landlords in Melbourne: Your Rights

Landlords in Melbourne are fairly well protected by a strong set of rights. There are certainly unusual horror stories to be found – but on the whole, renting out your property is a safe and sound investment decision. You’re protected by landlord’s rights such as:

• Security deposit: The right to take a bond, or security deposit, of at least one month’s rent from your tenants on acceptance of the rental agreement. Landlords can claim on the bond for damage, cleaning expenses, the tenant abandoning the premises, loss of the landlord’s goods and unpaid rent.
• Inspections: You have the right to carry these out 4 times a year, with 7 days notice each time.
• Entering the property: You have the right to enter the property with 24 hours notice for the purposes of valuing the property, showing prospective buyers, tenants or lenders through, carrying out your duties, or to verify a reasonable belief that a tenant has not met their own duties.
• Rent increases: You can increase the rent only at the end of a standard lease; on other leases increases can only be made every six months, with 60 days notice.

 

Landlords in Melbourne: Your Responsibilities

As a landlord you need to be aware of short-term impingements on your pocket like:

• Connection costs for electricity and gas: Installation and initial connection costs for electricity and gas must be paid by the landlord. Landlords are also responsible for the cost of hiring gas bottles, though not for the gas itself.
• Repair costs for premises: Your property has to be kept ‘in good repair’ during the term of the tenancy. There is obviously some wiggle room within this definition and disputes can occur. Non-urgent repairs must be carried out within 14 days.
• Building insurance: You are responsible for building insurance, but not contents insurance
• Public liability insurance: You’ll be required to maintain this in case anyone is injured on your premises as a result of negligence
• Install and maintain smoke alarms: A minor cost, though you will need to arrange for regular testing
• Council rates, land taxes, sewerage charges and water service charges: These additions to your rental property costs can be significant.

There is also a collection of other non-monetary responsibilities of landlords, including:

• Allowing your tenants ‘peaceful enjoyment’ of the property
• Guidelines on timing of inspections and notice periods
• Ensuring the property is safe and secure
• Give 60 days written notice of any rent increase
• Give 14 days notice of the end of a tenancy agreement

On the balance, renting out a property, especially in Melbourne’s current housing climate, can be a very sound financial decision … just make sure you’re well-informed of the ‘policy’ side, as well as the financial side.

appreciation · homeowners · property investment · renting

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