Investing in a property doesn’t mean just securing tenants and earning rental income. If a rental provider is renting a house or unit, he must meet the mandatory property compliance obligations.

Under the Australian Law, rental providers must make sure that the property they are renting out meets the minimum standards on or before the day a renter moves into the property. If the property is uncompliant – meaning it doesn’t meet the minimum standards, it can turn into a serious legal and financial headache. Having said that, getting the house or unit to meet the compliance standards doesn’t require a major effort.

Definition of minimum standards

The minimum standards apply to rental agreements that:

• started after 29 March 2021
• started before 29 March 2021 and roll over into periodic agreements on or after 29 March 2021

Rolling over to a periodic agreement is considered starting a new agreement, even if occupancy began before 29 March 2021.Minimum standards do not apply to rental agreements that started before 29 March 2021 and rolled over into a periodic agreement before 29 March 2021.

The minimum standards are divided into categories. All rental properties must meet the standards for each category.

Locks

The property’s external entry doors must have functioning deadlatches or be fitted with locks that can be unlocked with a key from the outside but can be unlocked without one from the inside.

Vermin proof bins

Rental providers must supply a rubbish bin and a recycling bin for the renter to use. The bins can be provided by the local council or purchased elsewhere, as long as they are vermin proof and meet council collection standards.

Bathroom and Toilets

A rental property’s bathroom must have a washbasin and a shower or bath and be connected to a reasonable supply of hot and cold water.Showers must have a shower head with a 3-star water efficiency rating.

The property’s toilet must be in a good working order and must be connected to pipes that carry the sewage to a treatment plan or a wastewater treatment system. The toilet must be in a separate room in the property, either by itself, or in an appropriate room like a bathroom or in a combined bathroom-laundry.

Kitchen

The property must have a kitchen with a dedicated cooking and food preparation area as well as sink connected to a supply of hot and cold water and a stovetop in a good working order with minimum of two burners.

Window coverings and windows

From 29 March 2022, windows in rooms likely to be used as bedrooms or living areas must be fitted with curtains or blinds that can be closed, block light and provide privacy. In addition to this, all external windows that can be opened must be lockable.

2023 Compliance standards updates

Electrical safety

On 29 March 2023, the electrical safety rental minimum standard will commence.

The electrical safety standard requires that rental properties must have modern style switchboards, with circuit breakers and electrical safety switches installed. Electrical safety switches are correctly known as residual current devices (RCD, RCCB or RCBO).

Rental providers are responsible for ensuring their rental property complies with the electrical safety standard by engaging a licensed or registered electrician.Rental providers are encouraged to engage an electrician early to ensure that they are meeting their legislative obligations.

Heating

Rental properties must have a fixed heater (not portable) in good working order in the main living area. If a fixed heater has not been installed in the main living area by 29 March 2023, the rental provider must install an energy efficient heater.

From 29 March 2023, the heater must also meet energy efficiency standards. This means that if a renter enters into a rental agreement from 29 March 2023, there must be a fixed energy efficient heater in the main living area. If there is an existing fixed heater that is not energy efficient, the rental provider must upgrade it.

An energy efficient fixed heater must be one of the following:

• a non-ducted air conditioner or heat pump with a 2 star or above energy rating
• a gas space heater with a 2 star or above energy rating
• a ducted heating or hydronic heating system with an outlet in the main living area
• a domestic solid fuel burning appliance, such as a fireplace or wood burning stove

The importance of rental compliance for rental providers

While it might seem like a hassle, property compliance isn’t something you want to skimp on as a rental provider.

The truth is that not meeting your compliance requirements can cost you thousands of dollars in legal costs as well as cause a stack of wanted legal consequences.

Let’s put this into perspective: landlords can be charged up to $220,000 if they’re found to have a non-compliance property. Plus, your tenants may choose to make compensations claims if they suffered any damage, harm or injury as a result of your non-compliant property.

Ultimately, being on the front foot with compliance is your ticket to a low-risk, stress-free and profitable investment property.

How can a property manager help you meet your compliance obligations?

As you can probably tell, compliance involves a lot of work. But as a rental provider, you don’t want to spend your spare time booking inspections, filing reports, and gathering certifications, right?

That’s why many rental providers choose to work with a property manager to meet their compliance obligations. A good property manager has the expertise and industry contacts to ensure your rental is properly managed, compliant and ready to be leased.

They can conduct routine inspections on your behalf (as well as in-going and outgoing inspections between tenants) to pick up any compliance issues that need to be addressed.

What a lot of rental providers like about using a property manager is the peace of mind of knowing an expert has ticked all their compliance boxes. Navigating compliance is a property manager’s bread and butter, meaning less risk exposure for you, too.

When it comes to meeting your property compliance Australia obligations, it’s important to be proactive and not put your head in the sand. By working with an experienced property manager, you can rest assured knowing you’ve got an expert by your side to make sure your rental property is up to code.

Ultimately, a property manager can help you avoid the headaches and hefty costs of a non-compliant property, which is well worth the investment.