BEST PRACTICE VS. LEGISLATION

One affliction many agencies and property managers suffer is a blurring of the line between what is legislation and what is company best practice. It is essential to clarify this area if you are preparing for a case at QCAT (Queensland Civil and Administrative Tribunal), because what you often think is the right thing, can invariably be simply best practice, or alternatively when you realise you haven’t followed best practice, but it might still be within the realms of what the legislation requires.

Sounds confusing, doesn’t it! It actually is, the longer you work in property management or the more agencies you work for, the line between what is actually legislation and what is simply the companies policy or procedure becomes more difficult to determine. It’s not like we keep the legislation like a bible beside our desks, although that is probably a good idea.

A best practice is something that produces optimal results, and as such, is widely adopted. Property managers work in an industry filled with intense technological, cultural and demographic change.
Best practice are procedures an agency requires you to follow, within the realms of the legislation, but also incorporating the company’s own values and customer service initiatives.

Rental agreement document with keys and pencil

One example highlighted this very issue for us recently and it was to do with the Exit Condition Report. In our business it is best practice to give tenants a copy of the Exit condition report after we have completed it and allow them time to go back and clean following a vacate, however, the legislation mentions the following:

CONDITION REPORT AT END OF TENANCY

  1. (1) The tenant must—
  2. (a) prepare, in the approved form, a condition report for the premises and any inclusions; and
  3. (b) sign the report; and
  4. (c) as soon as practicable after the agreement ends, give a copy of the report to the lessor or lessor’s agent.
  5. (2) The lessor or agent must, within 3 business days after receiving the copy of the report—
  6. (a) sign the copy; and
  7. (b) if the lessor or agent does not agree with the report— show the parts of the report the lessor or agent disagrees with by appropriately marking the copy; and
  8. (c) if the tenant has given a forwarding address to the lessor or agent—make a copy of the report and return it to the tenant at the address.
  9. (3) The lessor or agent must keep a copy of the condition report signed by both parties for at least 1 year after the agreement ends.
    So if you were to go strictly by the legislation, the tenant is required to give the Lessor/Property Manager a copy of the exit condition report, not the other way around. There is no mention of giving the tenant time to go back and re-clean either. The only time the Lessor is required to give the tenant a copy of the exit condition report is if the tenant gives a copy of the exit condition report first, then they must add their comments, sign it and return within 3 business days.

Another classic is the two weeks rent in an advance. Most real estate businesses request the tenants to be Two Weeks in Advance as part of their best practice, but according to the act the tenants have to adhere to the following:

SECTION 87 – RENT IN ADVANCE

A lessor or lessor’s agent must not require, as payment of rent in advance under an agreement, more than— (a) for a periodic agreement or an agreement for moveable dwelling premises—2 weeks rent; or (b) for another agreement—1 month rent.


SECTION 101 STATES

Rent in advance (1) A provider or provider’s agent must not require a resident to pay more than 2 weeks rent in advance.
A provider or provider’s agent must not require payment of rent under an agreement in a period for which rent has already been paid.
So basically, under this section, the tenant isn’t required to pay any more rent for a period that has already been paid, so essentially up to their paid to date. It is ok to ask for rent in advance when a tenant moves in but following that they essentially only have to be paid up to their ‘paid to date’.

This is just one of many contradicting sections and why it is essential you become an expert on the legislation. Especially if you are preparing for a QCAT appearance, you must understand the parts of the act relating to what your dispute is about.

There are many examples in modern businesses where best practice has over-shadowed what is actually legislation, but if you understand legislation it will go along way to resolving many disputes with landlords and tenants before you ever have to even think about a third party dispute resolution service.

10 BEST PRACTICE TIPS FOR PROPERTY MANAGERS

1) COMMUNICATION
There are few things more important for property managers than effective and regular communication. You need to stay connected to your landlord’s and tenants. They will often have questions about utilities, payment scheduling and maintenance – especially during the first month. You should be able to answer these questions, requests and complaints. Lack of communication is one of the major reasons a landlord leaves an agency, so there are many effective communication strategies to put in place to ensure you are exceeding expectations on the communication front. Your entire team should know expectations from the start to the end of a tenancy or management with your company.

2) BE ON THE SAME TEAM AS YOUR TENANTS
The best way to attract new tenants is by keeping your current tenants satisfied. Set the tone for when a tenant moves in to educate them on your expectations and best practice. When you receive a request or complaint, respond quickly and follow up to see if the response was satisfactory. Happy tenants ultimately make everyone’s jobs easier.

3) EMBRACE INNOVATION AND TECHNOLOGY
Some of us simply hate change, but in the world, we are living in you either embrace it or get left behind. Understand industry trends and social trends and think about where they’ll go next. By staying one step ahead, you’ll become a leader in your field and ultimately your job and workload might become easier.

4) MAKE MAINTENANCE MANAGEABLE
One of the main reasons a tenant leaves an agency is due to maintenance, or rather maintenance not being addressed. To a tenant, there’s nothing worse than asking for a repair and waiting over a month to receive it. Take initiative when it comes to maintenance on your property. Create an effective and efficient maintenance plan that ensures most, if not all, requests can be addressed and expectations set on when they will be addressed.

5) TRUST ACCOUNTING
With so much compliance around the management of Trust funds, a good system for managing the trust account is essential. Ensure banking is completed daily and engage in a software program that automates the receipt sending aspects. Some banking software also allows you to automatically upload bank files and process receipts. Ensure the storage of the files is compliant with legislation as well. Do your research and homework on this one, if you get it wrong someone could end up in the big house.

6) HAVE A GOOD NETWORK OF TRADES
There will be many times when property managers need to call on service providers in a variety of trades. Ensure they have all the relevant insurances and qualifications in place, and make sure they give you a pricing list. Also set expectations for timeframes when completing work.

7) STREAMLINE THE LEASING PROCESS
Make the process easy for leasing agents. When the leasing process is prolonged, possible renters tend to walk away. Keep your business running like a business, have timeframes and deadlines for processing applications and set client expectations from the start on how often you will be showing the property to prospective new tenants. Also, have a strategy if properties are taking a while to rent, what options does the landlord have?

8) EDUCATE YOUR TEAM
If your team isn’t clear on the businesses best practice how can they pass these onto the clients? Invest in training and regular sessions covering off on best practice.

9) MARKET PROACTIVELY
Do you have every avenue covered to market your properties, brand or yourself covered? From your online profile and social media to for rent signs and building relationships in your local community your name should be on peoples’ lips.

10) KNOW YOUR BOTTOM LINE
While you’re probably aware of the general state of your portfolio or business, have you taken a closer look to patch up holes? If your properties don’t rent as quickly as you’d like, what can you do to change that? If you are losing managements, why and what is the best solution.

Understanding and addressing problems as they arise and not sticking your head in the sand is probably the best, best practice advice given.
Stay tuned for our upcoming video series on Best Practice versus Legislation, where we will share some of our best practice advice for property managers and business owners.


ABOUT US

iThink Property has a team of real estate agents in Ipswich and Toowoomba offering property sales and property management services. With a passion for people and property, iThink Property was conceived with the notion of building a team of good people to work in a real estate brand that did things differently. iThink Property focuses on transparency, communication, innovation and teamwork and has become a leading independent brand with unique points of difference. So whether you are thinking of buying, selling or renting, think iThink Property.

KYLIE WALKER – DIRECTOR – BUSINESS DEVELOPMENT & MARKETING
0439 895 808
A former sports journalist, Kylie Walker brings a wealth of communication and marketing skills to the team at iThink Property. The busy mother of four launched and developed the company’s rent roll and has organically grown the business with iThink Properties rental network now spanning Ipswich, greater Brisbane and Toowoomba.

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