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Investing in property isn’t just about securing tenants and earning rental income. In fact, one of the biggest blind spots for investors is this: not understanding their property compliance obligations.
Under Australian law, landlords have a stack of obligations and boxes they need to tick before leasing their rental property. And this isn’t something you want to ignore, as non-compliant property can be a serious legal and financial headache.
But, getting your head around property compliance doesn’t have to be a major effort. Let’s run you through what compliance is, why it’s important and practical steps you can take to meet your compliance obligations as a landlord.
What is rental property compliance in Australia?
First up, let’s cover what compliance is and how it applies to rental properties in Australia.
In a nutshell, property compliance is about making sure every rental property meets the latest health and safety guidelines set out in Australian law.
Typically, it involves a range of different inspections, checklists and certifications to prove your rental property is in good condition and can be safely leased to new tenants.
Each state and territory has different compliance requirements for landlords, so it’s important to check what laws apply in your local area:
- NSW: Fair Trading
- VIC: Consumer Affairs
- QLD: Residential Tenancies Authority
- SA: Consumer and Business Services
- WA: Consumer Protection
- TAS: Consumer, Building and Occupational Services
- NT: Consumer Affairs
As a landlord, it’s your job to make sure your property meets these requirements and standards. It can be a time-intensive process to figure out what audits and inspections need to be done (especially if you’re a first-time investor), which is why many landlords (80% of landlords in Australia, in case you were wondering) work with a property manager to meet these compliance obligations.
Why is home rental compliance important for landlords?
While it might seem like a hassle, property compliance isn’t something you want to skimp on as an investor.
The truth is that not meeting your compliance requirements can cost you thousands of dollars in legal costs as well as cause a stack of wanted legal consequences.
Let’s put this into perspective: landlords can be charged up to $220,000 if they’re found to have a non-compliance property. Plus, your tenants may choose to make compensation claims if they suffered any damage, harm or injury as a result of your non-compliant property.
By taking your property compliance obligations seriously and getting them sorted proactively, you can:
- Limit your exposure to risk and potential litigation: the safer your property is, the less likely you are to encounter the legal headaches of a non-compliant rental property.
- Avoid unwanted costs: hiring a lawyer can cost you anywhere from $200 to $600 per hour if you are found to have a non-compliant property, which can easily add up to thousands of dollars if you have a range of compliance issues to resolve.
- Keep your rental property in good condition: by meeting your compliance requirements, you’re also practising proactive maintenance and repairs. Not only does this keep your tenants safe and happy, but it also safeguards the condition of your rental for years to come.
Ultimately, being on the front foot with compliance is your ticket to a low-risk, stress-free and profitable investment property.
What is a certificate of compliance in property?
A certificate of compliance is a document verifying that the build of your investment property is in line with your local council requirements and that all measures of health and safety of tenants can be maintained. This certificate is vital if you are looking to secure your long term returns from your rental home.
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Your ultimate rental property compliance checklist.
While there’s no set of standardised compliance guidelines in Australia, the key areas to pay attention to are the same across each state and territory.
Whether you’re a DIY landlord or working with a property manager, it’s your job to make sure your rental property is safe, secure and ticks the following compliance boxes.
So, here’s your ultimate rental property compliance checklist.
Decks and balcony safety
As you’d expect, an unstable railing or weathered balcony can cause serious harm to your tenants if left unchecked. And sadly, non-compliant balconies and decks have led to a number of injuries and even deaths across Australia.
When it comes to decks and balconies, your rental property needs to meet the requirements of the Building Code of Australian and relevant Australian safety standards. In broad terms, this means making sure the right materials have been used and that the area can withstand reasonable loads and stresses.
As a landlord, it’s your responsibility to get your property’s decks and balconies regularly inspected and maintained.
A good rule of thumb for keeping your deck and balconies safe is to:
- Always get the property planning and building approvals from your local council for any building renovations or additions.
- Only work with licensed tradespeople and always check they have the proper licenses for your state or territory.
- Book a professional to inspect your balconies and decks on a regular basis to check for wear, tear and serious deterioration.
Unsafe windows can be a major hazard to your tenants, especially if they have young children. Unfortunately, around 50 children fall from windows or balconies every year in Australia, with many suffering injuries or even death as a result.
That’s why a key compliance obligation for landlords is to make sure window safety devices are installed to prevent the risk of falling (especially from a height).
But there are a few practical ways you can boost the safety of your rental property’s windows, including:
- Don’t rely only on fly screens as these are only designed to keep out insects, not hold the weight of a falling child.
- Install window safety devices on all above-ground windows which will stop the window opening more than 12.5 cm.
- Move furniture away from windows and the edge of balconies and keep light furniture out of reach of young children.
Blind cord safety
It’s not just windows that can pose a safety risk to your tenants. Curtains, shades and blinds with cords and chains can cause injury and death to young children due to strangulation.
That’s why there are two important blind cord safety requirements that apply to rental property across Australia:
- Installation: corded blinds must be installed in a way that prevents a loop from forming near the floor level and must be installed in accordance with installation instructions.
- Labelling: warning labels or swing tags supplied with blinds must not be removed.
The stats show that smoke alarms in homes really do save lives: the death rate is more than twice as high in properties that don’t have working smoke alarms.
That’s why a key compliance obligation is to ensure your rental property is fitted with at least one working smoke alarm in a hallway outside a bedroom and on each story of the home.
A practical way to meet this compliance requirement is to schedule an annual smoke alarm inspection. This ensures a professional is visiting your property on a regular basis and keeping your smoke alarms in working order.
Swimming pools and spas
If your rental property has a swimming pool, you’ll need to make sure its fence is up to the requirements set out in the Swimming Pools Act 1992.
Plus, landlords (like you) will need to provide a copy of your pool’s certificate of property compliance (showing that it meets signage, fencing and other risk regulations) and prove that it's registered with your local authority.
Locks and security devices
Keeping your property safe and secure isn’t just about boosting the appeal of your rental property. Well-maintained locks are actually a compliance obligation for landlords.
Plus, you need to be across the rules that apply in your local area around altering, removing or adding locks and security devices while your rental is tenanted.
Electrical and gas safety
Roughly 40% of house fires in NSW alone each year are caused by electrical faults.
That’s why it’s your responsibility as a landlord to make sure no urgent electrical repairs are needed before leasing out your property. Plus, your property condition report needs to highlight any electrical hazards (such as loose wiring or sparking power points) and confirm that safety switches have been tested and are working.
As for gas appliance safety, it’s important that any gas appliances in your property are regularly serviced to keep them in working condition. It’s also important to ensure all devices follow the correct efficiency labelling and standards to remain compliant.
Plus, be sure to check that any gas appliances have been installed by a licensed Gas Fitter to keep your property and your tenants safe.
Mould, pests and vermin control
Landlords have an obligation to keep their property well-maintained and free from things like mould, pests and vermin.
From repairing poor ventilation to booking annual pest inspections, these regular maintenance jobs need to be carried out to meet your home rental compliance obligations. Plus, you have an obligation to respond to any tenant requests to fix pest or mould problems in a timely manner.
If not, you’re putting your tenant’s health and safety at risk (as well as jeopardising the quality of your rental property).
Water efficiency standards
Last but not least is another key part of landlord compliance: water efficiency and water-efficient devices.
Leaky taps, dripping shower heads and poorly maintained toilets all need to be repaired and upgraded prior to tenants moving in (or fixed promptly if they crop up during a tenancy). If not, showerheads and taps can exceed the maximum flow rate and expel a high level of litres per minute.
Plus, your property’s water efficiency measures (and evidence that your rental meets the minimum standards for water supplied to your rental) needs to be outlined in your condition report, too.
How can a property manager help you meet your compliance obligations?
As you can probably tell, compliance involves a lot of work. But as a landlord, you don’t want to spend your spare time booking inspections, filing reports and gathering certifications, right?
That’s why many landlords choose to work with a property manager to meet their compliance obligations. A good property manager has the expertise and industry contacts to ensure your rental is properly managed, compliant and ready to be leased.
They can conduct routine inspections on your behalf (as well as in-going and outgoing inspections between tenants) to pick up any compliance issues that need to be addressed.
What a lot of landlords like about using a property manager is the peace of mind of knowing an expert has ticked all their compliance boxes. Navigating compliance is a property manager’s bread and butter, meaning less risk exposure for you, too.
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When it comes to meeting your property compliance Australia obligations, it’s important to be proactive and not put your head in the sand. By working with an experienced property manager, you can rest assured knowing you’ve got an expert by your side to make sure your rental property is up to code. Ultimately, a property manager can help you avoid the headaches and hefty costs of a non-compliant property, which is well worth the investment.
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Disclaimer: The views, information, or opinions expressed in this blog post are for general information purposes only and should not be relied upon. We have not taken into account specific situations, facts or circumstances, and no part of this blog post constitutes personal financial, legal, or tax advice to you. You should seek tax advice from your accountant, specific to your situation.