Landlords should be prohibited from managing their own property. There are two reasons why landlords can’t manage properties in NSW:
1. The regulatory structures are too complex;
2. The legislation and the systems are tenant biased.
Residential tenancies Act 2010 sets out the rules that regulate the conduct between landlords and tenants. It is so complex that lawyers are having difficulty interpreting the legislation. Landlords who attempt to traverse this mind field either damage their own rights or provide tenants with a free gift.
The NSW Civil Administration Tribunal administers approximately 80,000 tenancy disputes per annum. The tribunal has available for every tenant a tenant advocate to assist in running and conducting cases against landlords. This is a free service, fully funded by the NSW government.
It is bad enough that a property manager who knows the rules but untrained in advocacy is facing trained and supported representation to the tenant, let alone a landlord who has no idea of their rights or obligations. Originally, tenancy claims could not exceed $3,000. Now they can claim $15,000 worth of damages. The example below cost the Landlord approximately $11,000. We reviewed the cases, one he should have won and the other he should have had at least half the damages ordered against him.
This landlord managed two properties. 12 months prior to the end of the lease he increased the rent with the agreement of the tenant. He failed to provide the 60 day notice in proper form. He lost the benefit of this increase at NCAT. Additionally, he allowed the mother to move out leaving the boys behind to live in the premises. Mum was on the lease and was held not to be liable for her boys’ destruction. As the head tenant, mum should have been held liable for damages or a lease should have been found against the sons and them made to pay. The Landlord did not possess sufficient skills or knowledge to protect himself.
His second attempt was in relation to a damages claim. Clearly the damage was done, but the tribunal found against him. The damages were in the vicinity of $7,000.
We have said it before, property managers are the most practiced solicitors in town. They attend the tribunal regularly, and have built up a range of skills that have taught them to survive in hostile territory. Although there are no clear statistics available, it appears that property managers in the right win more often than lose.
Agents should use these stories when speaking to landlords. Alternatively, landlords should think twice before managing their own property. If a landlord intends to manage their own property, they should undertake the real estate practice certificate course so that they are vested with the skills of the average property manager. For less than 5% of the rental income of your property you could avoid liability with an agent.