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Ever been in a debate with a tenant? Here’s how your agent can help.
Sharon Fox-Slater, managing director of EBM RentCover, recently penned a piece for Smart Property Investment’s sister publication Real Estate Business (REB) on the rights agents have when it comes to rental properties.
“It is fair to say that there can be a bit of argy-bargy between landlords and tenants about rights and responsibilities. The favourite topics for debate include rent increases, inspections, bonds, repairs, cleaning,” Ms Fox-Slater wrote.
“As an agent, you have no doubt been ‘piggy-in-the-middle’ on more than one occasion. And while you’ll find hundreds of hits on Google about landlord and tenant rights, there aren’t so many sites about agents’ rights.
“Obviously, licensing requirements and state/federal legislation cast in stone your obligations, but sometimes your rights get overlooked. And understanding those rights can have an impact on insurance.”
Here are five rights agents have and how they impact cover on rental properties, according to Ms Fox-Slater.
1. Enter the premises without notice
As a general rule, agents can’t simply turn up to inspect a rental, but in some circumstances, they do not need to provide a tenant with notice before entering the home, Ms Fox-Slater said, noting that it’s important to check the legislation in your state to see what applies in your jurisdiction and under what circumstances.
“However, typically no notice is required in situations of emergency: if it is reasonably believed damage has occurred to the property; if there are reasonable grounds to believe entry is necessary to protect the premises from damage; there is a risk to the tenant or another person present on the property; to carry out urgent repairs; when attempts have been made to contact the tenant and there is reasonable cause for concern about their health or safety; or if the property is believed to be abandoned,” Ms Fox-Slater wrote.
“There is a clause in most landlord insurance policies that relates to ‘mitigating further loss’. In order to fulfil this (in emergency situations or to carry out urgent repairs), it may be necessary to enter the premises without notice.”
2. Take photos and video during inspections
One responsibility agents have is to perform rental inspections to ensure the lease agreement is being met and the property is being kept in a reasonable condition.
The information they collect during those inspections may form the basis of the evidence a landlord needs to make an insurance claim, Ms Fox-Slater said.
“As the old saying goes: ‘A picture paints a thousand words’. Taking photos or videos is a good way to accurately capture the state of the property, whether to support an insurance claim or to show visual evidence to the landlord of the need for repairs and maintenance,” she wrote.
However, if an agent is to take photos/videos, they must respect the privacy of your tenants.
“Any footage [taken] must not show the tenant’s property, including its contents and their physical living arrangements. If you do take visuals, you should only use them for the purposes for which they were collected and only pass them onto third parties (landlord, insurer, repairer) when necessary,” Ms Fox-Slater said.
“Make sure you check the legislation in your state to see what applies in your jurisdiction and under what circumstances.”
3. Refuse to enter the premises
Even though agents have a contract with the landlord to manage their investment property, they do not have to enter the premises if doing so would put them at risk, according to Ms Fox-Slater, who says agents should never enter a property if it is seriously damaged and/or dangerous.
“Ditto if you think the rental may be being used as a drug lab – do not enter, call the police,” Ms Fox-Slater said.
“You should also avoid entering the property if you think the tenant may have died onsite. Call the police and let them handle it. Even if there is no physical risk, you also need to think about your mental health.”
4. Perform contractual duties
When agents enter into a property management agreement with a landlord/owner, they will have certain obligations – and they have the right to carry out these obligations to the level of authority they have been given by the landlord, Ms Fox-Slater explained.
“In the event of an insurance claim, it will be important to check the contract. For example, if the property is damaged and the owner claims this happened because [the agent] failed to inspect the property, then the terms of the contract will be crucial,” she said.
“If [the agent] failed to meet some of [the] obligations under the contract, then [they] are likely to be liable for the owner’s loss. However, if [the agent] can show that [they] met all of your obligations, [they] may not be liable.”
5. Refuse to do anything that breaches a duty of care
If a landlord asks an agent to perform any action that could breach their duty of care to the tenant, then they have the right to refuse that request.
“[Agents] need to be cautious about encouraging tenants to engage in activities where there is a foreseeable risk of injury,” Ms Fox-Slater explained.
“For example, providing tenants with a vacating cleaning checklist that recommends cleaning drains with caustic soda. It can be argued that a tenant may misuse the product or fail to read or understand the safety information and end up being injured by the chemical).
“Or, allowing special clauses to be added to leases that require the tenants to undertake activities such as cleaning out gutters (tenants are being instructed to get up to the gutter height and then remove debris, and potentially the tenant could fall off the ladder or whatever they use to reach the gutter and injure themselves and damage the gutter/pipes, too).”