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Natural Disasters and Rental Property - Real Estate Excellence
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The following steps
are best practice suggestions for licensees and property managers who face
flood disasters (or other natural disasters).
Consider making an email account that all emails can be
forwarded to (such as floods2013youragency@gmail.com or send to one existing
accounts.
- Start a separate disaster management journal (such as January floods
2011) for entry of all reported damage and incidents of properties
managed. This could be kept either electronically or in a paper based
manner; as long as it is easily accessible by all staff. Also ensure appropriate diary notes and
paperwork are placed in computer software and the property file. Draw up
six columns to record the following;
- Date
- Property
- Damage reported and by whom
- Insurance policy number (once advised by lessor)
- Action taken
- Task completed (once all works are finalised)
- Alternatively ensure two copies are made of any maintenance forms;
one to be centralised in one file for follow up and management over coming
weeks and months.
- Direct staff who are taking phone calls from tenants and any notification
of damage that the incident is to be recorded in the disaster management
journal.
- Prioritise the damage to property and tenant situation and work on
the highest priority first and make your way through the list.
- Contact lessors of known property damage and advise of the situation.
(further information is below on procedures). Where possible, send a
generic email to all clients advising of the situation and request
communication to be in writing.
- Contact tenants of suspected flood damaged property and the tenants
of property who have reported damage. Provide them with the RTA Fact sheet
on Natural Disasters. If the property is completely unihabitable, advise
the tenant that the tenancy most likely will lawfully end. Advise that
discussions will be needed with the lessor prior and more information will
be provided. If the property is not
completely unlivable and has only sustained ‘minor’ flood damage, advise
the tenant that the lessor will be contacted to discuss the matter
further.
- In regards to the tenant’s own property being damaged, advise them to
contact their personal contents insurance company. Regrettably some
tenants will not have their own personal insurance; in this event, advise
tenants that the lessor will be advised and all attempts will be made to
ascertain if the lessor’s insurance will cover the situation. In most
cases, the lessor’s insurance will not cover the tenants belongings.
- There is no legislative duty for lessors to provide tenants with
alternative accomodation in times of natural disasters; however this may
be recommended in some cases as a sign of good faith however many lessors
may not be in a situation to afford this option. Lessors may wish to
contact their insurance companies to identify if there is any coverage for
this situation.
- The Residential Tenancies and
Rooming Accomodation Act 2008 (Qld) RTRA Act allows for tenancies to
either end (if completely unliveable) or rent decreases to be negotiated,
in circumstances of partial non liveability.
- Contact lessors accordingly and advise the current status of their
property and that more information will be provided where required and
when obtained. Provide lessors with the RTA Fact Sheet on Natural
Disasters available from the RTA website (also available on the PME CD –
RTA Fact sheets). If the property
is not liveable, advise the lessor that the RTRA Act allows for the
tenancy to end on the same day. If the property is partially unfit to live
in and/or has suffered minor damage, advise the lessor of the provisions
of the RTRA Act which allow for a negotiated rent decrease during the
period of repair. (see section below)
- Advise lessors to contact their insurance companies (contents,
building and landlord insurance) to report the incident and to start the
process of making a claim. Advise lessors to start the claim paperwork
process.
- Advise lessors to provide the following information in writing to
your agency
- the insurer, contact phone details (email and phone number) and name
of contact (if possible)
- the insurance policy number;
- the claim number and
- the insurance paperwork (mostly completed) for finalisation once
required works are carried out.
- Explain to lessors that due to the large volume of properties and
people affected, all communicaton to be in writing in regards to this
matter.
- Contact the agency preferred tradespeople/contractors in regards to
high priority jobs and allocate work. Follow up the contact with a written
work order. In high to medium damage property (or if any doubt), contact
the insurer for advice before proceeding.
- Assess progress of high priority work daily until tasks completed.
Keep in regular communication with lessors and tenants as to progress and
for great customer service. Ensure the disaster management journal is
maintained.
- Once the majority of the works are considerably under control,
arrange for routine inspections to check on properties that have had minor
damage. Ensure photos are taken, extensive visual reports are provided to
lessors and take action as appropriate (such as advising lessors to make
insurance claims for particular cases)
- Following are the relevant sections from the RTRA Act for rent
decreases and ending the tenancy due to non liveability (agreement
frustrated). The relevant provisions are highlighted via shading below.
Ensure the RTA Form 12 Notice to Leave is conmpleted to end the tenancy
lawfully and that any rent decrease agreements are completed in writing.
Tenants can also issue a RTA Form 13 to end the tenancy. Obtain lessors written instructions and
provide an agreement with the tenant in which they should sign. The
agreement should allow for how much the rent will decrease by, and for how
long. Also ensure is made in the agreement for when the rent is to go back
to the orginal agreement amount.
- If agreement cannot be reached for the rent decrease amount, complete
the RTA Form 16 Dispute Resolution and seek mediation assistance. If
dispute resolution is not successful, the matter may need to be referred
to Tribunal as a non urgent application (within 7 days of the unsuccessful
dispute resolution number being provided by the RTA).
- Ensure all verbal conversations with tenants, lessors and other third
parties are recorded in office files; either hard copy file notes or
electronic file notes.
- If your agency is at risk, ensure all files are safe and easily
accessable (such as back ups of site and retrievably remotely).
Queensland Legislation
– Residential Tenancies and Rooming
Accommodation Act 2008
94 Rent decreases
(1) This section applies if the premises—
(a) are destroyed, or made completely or partly unfit to live in, in a
way that does not result from a breach of the agreement; or
(b) no longer
may be used lawfully as a residence; or (c) are appropriated or acquired
compulsorily by an authority.
(2) This section also applies if—
(a) services, facilities or goods to be provided to the tenant under the
agreement are no longer available or are withdrawn other than because the
tenant failed to meet the tenant’s obligations under the agreement; or
(b) the amenity or standard of the premises decreases substantially
other than because of malicious damage caused by the tenant.
(3) The rent payable under the
agreement decreases accordingly or, if an order for a decrease in the rent is
made by a tribunal, to the extent stated in the order.
(4) A tribunal may make an order for a rent decrease only if—
(a) the tenant applies to the tribunal for the order; and
(b) if this section applies because of subsection (1)—the premises are
partly unfit to live in.
329 Handover day for notice to leave for premises that are not moveable
dwelling premises
(2) The
handover day for a notice to leave given by the lessor must not be earlier
than—
(a) if the
notice is given because of an unremedied breach and the breach is a failure to
pay rent—7 days after the notice is given; or
(b) if the
notice is given because of an unremedied breach and the notice is not a notice
to which paragraph (a) applies—14 days after the notice is given; or
(c) if the
notice is given because of noncompliance (tribunal order)—7 days after the
notice is given; or
(d) if the notice is given because of non-livability—the day the notice
is given; or
(e) if the
notice is given because of compulsory acquisition—2 months after the notice is
given; or
(f) if the
notice is given because of a sale contract—4 weeks after the notice is given;
or
(g) if the
notice is given because of ending of entitlement under employment—4 weeks after
the notice is given; or
(h) if the
notice is given because of ending of accommodation assistance—4 weeks after the
notice is
given; or
(i) if the
notice is given because of ending of housing assistance—2 months after the
notice is given; or
(j) if the
notice is given without ground for a periodic agreement—2 months after the
notice is given; or
(k) if the
notice is given without ground for a fixed term agreement—the later of—
(i) 2 months after the notice is given; or
(ii) the
day the term of the agreement ends.
(3) Nothing
prevents a notice to leave under subsection (2)(k) being given at any time
before the end of the term of the fixed term agreement.
284 Notice to leave if agreement frustrated
(1) The lessor may give a notice to leave the premises to the tenant
because the premises—
(a) have been destroyed, or made completely or partly unfit to live in,
other than because of a breach of the agreement; or
(b) no
longer may be used lawfully as a residence; or
(c) have
been appropriated or acquired compulsorily by an authority.
(2) A notice to leave under this section must
be given within 1 month after the happening of the event mentioned in subsection
(1).
(3) A notice to leave under subsection (1)(a) or (b) is called a notice
to leave for non-livability.
Editor’s note—
See
sections 329(2)(d) (Handover day for notice to leave for premises that are not
moveable dwelling premises) and 330(2)(d) (Handover day for notice to leave for
moveable dwelling premises) for requirements about the handover day for a
notice to leave given because of non-livability.
(4) A
notice to leave under subsection (1)(c) is called a notice to leave for compulsory
acquisition.
Editor’s note—
See
sections 329(2)(e) (Handover day for notice to leave for premises that are not
moveable dwelling premises) and 330(2)(e) (Handover day for notice to leave for
moveable dwelling premises) for requirements about the handover day for a
notice to leave given because of compulsory acquisition.
305 Notice of intention to leave if agreement frustrated
(1) The tenant may give a notice of intention to leave the premises to
the lessor because the premises—
(a) have been destroyed, or made completely or partially unfit to live
in, other than because of a breach of the agreement; or
(b) no
longer may be used lawfully as a residence; or
(c) have
been appropriated or acquired compulsorily by an authority.
(2) A notice of intention to leave under this section must be given within
1 month after the happening of the event mentioned in subsection (1).
(3) A notice of intention to leave under subsection (1)(a) or (b) is called
a notice of intention to leave for non-livability.
(4) A
notice of intention to leave under subsection (1)(c) is called a notice of
intention to leave for compulsory acquisition.
A tenancy
agreement does not automatically end during a natural disaster, even if the
property is totally destroyed.
A tenancy
agreement will only end if one of the following happens:
·
the tenant and lessor/agent agree in writing
·
the tenant gives the lessor/agent a Notice of intention to leave (Form 13) (or Form R13 for rooming accommodation) or the lessor/agent
gives the tenant a Notice to leave (Form 12) (or Form R12 for rooming accommodation)
·
the lessor/agent gives the tenant an Abandonment termination notice (Form 15)
·
the Tribunal makes an order
If either party disagrees with
the notice, they can dispute it by lodging a Dispute resolution request (form 16) with the RTA.
After a natural disaster:
·
A premises may be declared unliveable if it is unsafe to live in for
health and safety reasons, or if the premises cannot be occupied. Giving notice
will end the tenancy agreement from the day the notice is lodged, but must be
done within one month of the disaster. See If the premises becomes unliveable for more
information.
·
The tenant may be evacuated; however, they must still pay the rent. It
may be possible to negotiate a rent reduction for this period but it must be
discussed on a case-by-case basis.
·
The rent may be reduced if the property is damaged or if some of the
facilities are unavailable (e.g. carpark, pool, laundry). This is also on a
case-by-case basis and needs to be agreed between the tenant and lessor/agent/manager
and put in writing.
·
You may need emergency repairs on the property.
Fast facts
·
Following a natural disaster the rental market can become competitive
but the rent cannot be increased outside of the normal rules for rent increases.
·
A tenant cannot be evicted for one who will pay a higher rent outside of
the normal rules for ending a tenancy.
·
The lessor is responsible for maintaining the premises in good repair,
but will need to comply with Entry notice requirements when repairs are being done.
·
Bond processing with the RTA could be affected if postal services in
Brisbane or in the affected area are disrupted. Contact
the RTA for information on extended processing times.
Flood
affected properties
A tenancy agreement does not automatically end as a
result of flooding, even if the premises are totally destroyed. However, it can
be ended quickly if the correct notice is given. Until it is ended, the tenant
is still responsible for paying rent.
If the property is unliveable the tenancy can be ended on the day
the notice is given.
If a property is damaged, the lessor
and the tenant can come to an agreement to reduce the rent until the premises
are returned to the condition prior to the disaster. The agreement should be
put in writing and signed by all parties. If an agreement can’t be reached then
the RTA's free dispute resolution service may be able to assist. Under the Act, tenants may ask for a rent reduction if:
·
the premises are partly unfit to live in
·
if services, facilities or goods to be
provided to the tenant are no longer available
·
if the amenity or standard of the premises
decreases substantially, so long as the damage was not caused by the tenant.
Cleaning - who's responsible?
The lessor is responsible for the maintenance and repairs needed to bring the property back to a liveable condition, as well as fences, gardens and pools. These repairs need to comply with health and safety laws. The tenant is responsible for removing or cleaning their possessions. Lessors and tenants are encouraged to communicate with each other about the clean-up.
The lessor is responsible for the maintenance and repairs needed to bring the property back to a liveable condition, as well as fences, gardens and pools. These repairs need to comply with health and safety laws. The tenant is responsible for removing or cleaning their possessions. Lessors and tenants are encouraged to communicate with each other about the clean-up.
The information
provided by Real Estate Excellence is of a general nature only and is not
intended to constitute legal advice under any circumstances. Individuals
should consider their own circumstances before proceeding to rely upon any information
provided by Real Estate Excellence. Whilst care has been taken in best
practice advice provided, and the information contained in it has been obtained
from sources that Real Estate Excellence believe to be reliable, Real
Estate Excellence (including its directors, officers, employees and
contractors) does not warrant, represent or guarantee the accuracy,
completeness or fitness for purpose of that information. Real Estate Excellence
(including its directors, officers, employees and contractors) accordingly
does not accept any responsibility, liability, loss or damage whatsoever
resulting from the use of the information provided. By using the services of
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accepted this disclaimer of liability.
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