How extreme weather affects your rent roll

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“Of droughts and flooding rains…” our sunburned country has its fair share of extreme weather.

Cyclones in the far north have decimated entire towns while those ‘flooding rains’ have a habit of making their way around the country.

Damage to rental properties from events like storms, bushfires and high winds is all too commonplace. From your perspective as the managing agent, this can spell a major headache. It makes sense to be across the facts for when this type of issue occurs.

 

Rules around property damage

Specific tenancy laws do differ from state to state. Generally speaking, however, if a property is rendered uninhabitable because of a natural disaster, this means the landlord is no longer able to collect the rent.

Tenants not only have the right to vacate the premises and stop paying rent, they can break their lease and not return when the repairs are complete.

If the house can still be lived in but certain areas are rendered off limits due to repairs, a solution may be reached on a case-by-case basis. This may involve the tenants paying reduced rent if both parties believe this is fair.

Should a tenant and landlord / agent not be able to come to an agreement in relation to rent payments during repairs, it may be necessary for the tribunal to become involved. With this being the case, it doesn’t hurt to have a pre-set policy you can share with tenants before they move in.

 

Landlord obligations

In some states it is mandatory for landlords to notify tenants if the area they are moving into is prone to bushfire, flooding or earthquakes.

According to NSW law, after a natural disaster most repairs are likely to be classed as urgent. As landlord or agent, it is your responsibility to liaise with tradespeople and insurers. You do not have to give your tenants any minimum period of notice before sending tradespeople to do this work.

 

Fairtrading NSW states that serious storm, fire or flood damage are all considered to be urgent repairs. Such repairs should be done as soon as possible. If your tenants believe you are not acting quickly enough on needed repairs they can apply to the Tribunal for their rental payments  to be held in a special account until the work is done. They may also arrange to have the work done themselves and be reimbursed for the cost.

Again, being prepared is the best advice. Have a trustworthy list of tradespeople on call so you can arrange work quickly and at the right price.

 

Preventing disaster

Natural disasters may be unavoidable but there are ways to limit the impact. These include:

  • Regular arborist visits to check for dead / dying trees and branches that will cause damage if they fall during a storm

  • Text message reminders for your tenants to clean their gutters regularly

  • Staying on top of roof and drainage repairs

  • Annual smoke alarm checks (in many states these are mandatory by law)

 

 

Finally, ensure the landlord has adequate building insurance, landlord fixtures and fittings insurance and public indemnity insurance.  Tenants must have their own contents insurance if they wish to claim damage to the contents of the property.

 

 

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