Property services real estate law land property essay

Course: Certificate IV in Property Services Real EstateCourse No: National Code: CPP40307Training Package: CPP07Subject No: CPPDSM4010ASubject: Lease propertyAssignment: 1Student: Dominic BrooksPostal Address: 30 Ultimo WalkTaylors HillVictoria 3037Student No: N453534Date sent: Monday, 13 September 2010

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Assignment3Assignment answerQuestion: Page No: Part 1 – Case study14, 52536, 7, 8485969, 10710, 11Part 2Forms13-23Bibliography24

Assignment Question:

This task is designed for you to demonstrate your understanding of lease residential properties for rent. The assignment is in two parts, both of which are related to the case study.

In part 1 you must answer all related questions to the case study.

In part 2 you must complete tree property management documents. The documents are form part of a portfolio related to the tenant you deem to be most suitable applicant in part 1.

The documents you must submit are:

A complete first page of the residential tenancy agreement.

A completed rental bond lodgement form.

A completed rental trust receipt.

All three documents can be found on the Management Form page of the Evansdale Reality intranet site.

Case study

Claire Bradman (70 Church Street Evansdale 2929) has approached Evansdale Realty to find suitable tenants for her newly purchased property at 200 Gladstone, Evansdale. You carry out an inspection of the property and find it is a small two bedroom weatherboard and fibro cottage with a double garage that is two kilometres from the two centre.

The small yard is fully fenced. The house has new carpet, renovated kitchen and is freshly painted with light caramel coloured walls and white ceilings. There is a 20 cm hole in the back of the laundry door and the kitchen tap is leaking. There is also a small round patch of mould on the ceiling of the family room.

You have to undertake a physical inspection of the property and you estimate a reasonable rent for the type of property is $180. 00 per week.

Claire has authorised you to spend up to $250 on repairs and maintenance and has requested that Sparkies Electrical (phone 6372 1499) and Darkside Plumbering (phone 6372 5000) be used in case of emergency repairs.

The initial term of the tenancy is 26 weeks.

You have received three applications from prospective tenants. Details are as follows:

Tim (36) and Tina O’Brien (35) have four children, aged 12, 10, 8 and 6. Time works at the local hardward store and Tina works part-time at the bakery.

Alice Jones (67) is retired teacher who know successfully writes children’s storey books. She has a pet cat and a goldfish.

Justin (23) and Amy McNeil (21) are brother and sister and have recently arrived in Evansdale. They come from nearby town and are still looking for jobs. They have a large dog and cat.

Assignment answer

Part 1 – Short answer questions.

What steps would you take before deciding which tenant would be suitable for the property?

As the Property Manager it is my responsibility to find the right tenant. The final decision as to who rents the property will be made by the landlord based on the advice provided to them by me. Therefore, I must establish if the tenant’s applying to lease the property can: Pay the rent; and, Will respect and look after the property. The following information must be obtained to determine suitability of tenants for the landlord: Name[1]. Address[2]. Occupation[3]. Employer(s)[4]. Driver licence or other form of identification[5]. Bank details[6]. How many people will live in the premises[7]? References[8]. Past rental history[9]. Proof of identify[10]. If the premise is to be tenanted by more than one adult, each adult must provide the property manager with the above information on separate forms. The application form provided by the agent to tenants must contain sufficient information advising tenants of what to expect under the lease agreement.

How would you select a tenant for Claire’s property?

As the Property Manager I would review all documentation received and check the references provided by Tim, Tina, Alice, Justin and Amy. I would contact the agent or owner of other properties they have rented seeking answers to the following questions: When did the tenant rent from you[11]? Did the tenant pay the rent on time[12]? Did the tenants leave the premises in good condition[13]? Were there any problems with the neighbours[14]? Did the tenant keep pets[15]? Would you rent to the tenants again[16]? Based on the information I receive I would then make an informed decision as to the most suitable tenant to rent the property. I would provide the landlord with two options, tenant A and B and some feedback on the person/s. Before providing information to the landlord I would check the tenancy databases, to check if the tenant has been listed on the database. Under the Privacy Act (Commonwealth) and Privacy and Personal Information Protection Act 1998 (NSW) I am restricted as to what I can tell the landlord about the tenant. I can provide answers to the above questions A to F. The information obtained about the tenant can only be used to determine their suitability and cannot be used for any other purpose. As the landlord makes the final determination on who rents the property it is important that I am honest when providing information to them on potential tenants. Wrong or misleading information provided by me will result in future problems at the site and I or the agency may be held accountable. Potential tenants must be kept informed during the negotiation process. They will be keen to know if their application has been approved or refused. Any conversation you have with tenant’s need to be recorded and kept in your dairy or on file.

Who would you advise Claire to choose as a tenant, and why?

The property for lease is located at 200 Gladston Street, Evansdale 2929 having these characteristics: Small bedrooms x2Weatherboard and fibro constructionDouble garage. Two kilometres from the town centre. Small yard fully fenced. New carpet. Renovated kitchen. Freshly painted with light caramel coloured walls and white ceiling. 20 cm hole in the back of the laundry door. Kitchen tap is leaking. Small mould patch in family room. Assumed by not stated bathroom provided. The owner seeks to rent the property at $180 per week for 26 weeks. No advice has been provided by Claire as to the keeping of animals at the site. Such information is to be obtained from Claire as two potential applicants have animals. Tenant assessment:

Information sought

Tenant A

Tenant B

Tenant C

Name

Tim O’BrienTina O’BrienAlice O’BrienJustin McNeilAmy McNeil

Age (provided cannot be used as a means to reject a person under the Anti-Discrimination Act)

3635672321

Address

No provided based on information provided in case studyNo provided based on information provided in case studyNo provided based on information provided in case studyNo provided based on information provided in case studyNo provided based on information provided in case study

Occupation

Full time employmentLocal hardwardPart time employmentBakeryRetiredwrites books and is successfulUnemployed recently moved to town seeking employmentUnemployed / recently moved to town seeking employment

Employer(s) details.

No provided based on information provided in case studyNo provided based on information provided in case studyNo provided based on information provided in case studyNo provided based on information provided in case studyNo provided based on information provided in case study

Children

4NilNil

Driver licence or other form of identification

No provided based on information provided in case studyNo provided based on information provided in case studyNo provided based on information provided in case studyNo provided based on information provided in case studyNo provided based on information provided in case study

Bank details

No provided based on information provided in case studyNo provided based on information provided in case studyNo provided based on information provided in case studyNo provided based on information provided in case studyNo provided based on information provided in case study

Animals / pets

Nil1 cat and 1 gold fish1 large dog and 1 cat

Status

MarriedMarriedNo provided based on information provided in case studyAssumed singleNo provided based on information provided in case studyAssumed SingleNo provided based on information provided in case studyI recommend the following person: Alice Jones because it is assumed that she is financial secure based on her occupation. She is retired and the property’s size including the yard would be most suited to her situation. What needs to be established is if Claire is accepting to having animals at her property? I would not recommend the following persons: Tim or Tina O’Brien as the house is too small to house the family. The property contains two small bedrooms which would not be suitable for six family members. Justin or Amy McNeil simply because both do not have a job and cannot make rent repayments. If they had jobs and provided the yard was suitable for the keeping of a dog and Claire agreed, they would be my second choice as tenants. It is recommended as property manager that I provide information on two suitable tenants for Claire’s consideration. However, based on my assessment, I do not feel there are two suitable tenants. There may be grounds to consider Tim and Tina as suitable tenants, given they could meet rent repayments. However, I feel, that the site’s characteristic do not lend itself to being a suitable site for them to rent. The Anti Discrimination Act, 1977 states that you must not discriminate against someone, or harass them because of their: race, sex, pregnancy, marital status, disability, homosexuality, age or transgender. Given Tim and Tina could meet rent repayments I would advisable Claire of these tenants and their situation and permit Claire to make the final decision.

What documentations are you required to give the tenant under the Residential Tenancies Act 1987?

The tenant must be given a copy of the: Tenancy agreement[17]. Renting Guide a publication produced by Department of Fair Trading; and, Condition report. Upon receiving a copy of the condition report for the property from the landlord / agent the tenant is afforded 7 days to review the document and to either agree or disagree with the comments identified within the report. If the tenant does not agree with the comments identified in the report they must provide reasons as to why and include such comments on the condition report before signing it and returning it to the landlord / agent.

Calculate the entry costs for the tenant?

Item

Calculation

Amount

Reservation fee

Note: money paid in good faith while the application is being considered.

$180$180. 00

Rent in advance

Note: 2 weeks rent in advance, if the weekly rent is $300 or less, or 1 month’s rent in advance, if the weekly rent is more than $300

$180 * 2 = $360$360. 00

Bond

Note:

4 weeks rent for unfurnished premises or 4 weeks rent, for fully furnished premises with a rent of $250 or less per week or unlimited, if the rent for fully furnished premises is more than $250 per week.

$180 * 4 = $720$720. 00

Lease preparation fee to a maximum of $15 for the tenant

$15 (tenant) + $15 (landlord) = $30$30. 00

Total costs

Excluding reservation fee.$1110. 00

Total costs

Including reservation fee$1290. 00

Explain how you would collect the rental bond and why?

The rental bond is a security bond paid by the tenant for the landlord against any future breaches of the tenancy agreement. The tenant must fill out a ” Bond Lodgement” form which is signed by either the landlord or agent. Either the landlord or the agent will send the bond to the Renting Service Branch of the Office of Fair Trading within 7 days of receipt of the bond. Once the bond has been received by the Renting Service Branch the landlord / agent and tenant will receive notification from the Office of Fair Trading[18]. At the end of the lease, a final inspection is carried out by the agent and provided there is no damage to the property the tenant can apply to get their bond money back from Office of Fair Trading. Either the agent or the landlord must sign the form to enable bond money to be reimbursed back to the tenant. Renting Services, a department of the Office of Fair Trading, will deposit the money back into the tenant’s account or post them a cheque. If the landlord / agent disagree with the bond refund, they must provide the tenant with details as to why they will not receive back their bond. A tenant can still make a request for a refund and complete a ” Claim for Refund of Bond Money” with the Office of Fair Trading. In this circumstance the OFT will notify the landlord of the tenant’s actions. Where the landlord refuses or disagrees with the tenant’s request for a refund of the bond money the landlord / tenant within 14 days must apply to the Consumer, Trader and Tenancy Tribunal.

List the documentation you will keep in your filing system? Explain why?

The following documents would be kept in the firm’s filling system: Residential tenancy agreement. The agreement outlines the terms, conditions and responsibilities of the owner and the tenant. The agreement is a legally binding contract. Condition reportThe condition report specifies the property’s condition at the start of the lease. The document is referred to by the agent and tenant at the end of the lease. Depending on what damage is done to the premises the bond may or may not be released. The renting guideThe renting guide is a document put together by the Department of Fair Trading providing advice for tenants who rent properties in NSW. Evidence must be recorded on your records that the document was provided to the tenant at the start of the lease. Key receipt. Acknowledgement in the form of an agreement signed by the tenants that they were provided with a full set of keys for the unit. Acknowledgement entry costs have been paid. Confirmation in the form of receipts that the following payments have been paid: Agreed rent in advance. Ie two weeks in advance if rent is less than $300 per week or 1 month in advance if more than $300 per week. Bond. Ie four weeks rent for unfurnished premises; six weeks rent for fully furnished premises with rent of $250 or less per week or unlimited if the rent for fully furnished premises is more than $250 per week. Half the agreement preparation fee to a maximum of $15. Received moneyEach time money is received from a tenant for payment of rent or other costs a trust account receipt must be issued. The receipt must show: The date of issue. The number of the receipt in numerical sequence. The name of the licensee and the words ‘ Trust Account’The names of the person from whom the payment was received. The name and ledger reference number of the person on whose behalf the payment was made. Sufficient particulars to identify the transaction in respect of which the money was paid. The amount of money received and whether (or extent to which) it was paid in cash or by cheque, by electronic funds transfer or otherwise[19]. The receipt must be kept for seven years and should be retained on the licensee’s premises for a period of 3 years before being archived. Bond lodgement formA copy of the Rental Bond Board must be filed in the tenant’s file. The document is required at the end of the lease for the claim on a bond refund. AccountingA copy of the financial / yearly transaction statement issued to the landlord.

Part 2 – Forms

Complete the following documents (available on the Evansdale Realty site) and submit along with the answers from part 1 above 1

A completed first page of the residential tenancy agreement.

A completed rental bond lodgement form.

A completed rental trust receipt.