Pre-Tenancy Costs – Tenant
After signing the Tenancy Agreement the new tenant is given a date prior to the commencement of the tenancy by which the initial rent, bond and letting fee is to be paid. We require the maximum bond allowable by law – four weeks. One week’s rent in advance and a letting fee of one week’s rent (plus GST) is also payable. This equates to just over six week’s rent to be paid before the tenancy begins.
We will never release the keys to the tenant until all of the money due has been paid.
The tenant signs a Bond Lodgement Form along with the Tenancy Agreement. The bond of four weeks’ rent that we collect is then paid to the Department of Building and Housing, along with the Bond Lodgement Form. This is a legal requirement.
When the tenancy comes to an end, a final inspection is conducted. Any issues for which the tenant is responsible, such as cleaning, repairs, gardening and so on will be rectified and the cost deducted from the tenant’s bond. This includes any rent owing. If the tenant disputes a deduction, the matter is resolved in the Tenancy Tribunal (which is why thorough inspections are vital.) If the bond does not cover the repairs, cleaning, rent arrears etc for which the tenant is liable, they may agree to make a payment on top of the bond. If not, this is also resolved in the Tenancy Tribunal.
Monthly Accounting to Owners
It is standard practice in the property management business to account to owners on a calendar monthly basis. Our trust accounting system has been set up in this format also.
Throughout the month tenants make their regular rent payments to our trust account. On the first working day of the each month we print out our ‘Owner Statements’ and make a direct credit of available funds to the owner’s bank account. These statements detail all moneys received into our trust account for the previous month, including rents, bond refunds and any compensatory payments. It also details outward expenses such as contractors’ payments, regular outgoings such as rates or insurance premiums and the deduction of any management costs incurred.
The statement is then posted or emailed to the owners (or to the nominee of their choice) in accordance with their preference, wherever they may be in the world. Original copies of contractors’ tax invoices are kept on file at our offices and are available upon request.
Should our clients (or their tax consultants) require further copies of rental income and expenditure for the year, our software system is able to reproduce the required monthly statements for the property dating back to the time of our appointment.