SALES INSPECTION COMPENSATION
The updates to the Residential Tenancies Regulations 2021 came into effect at the end of March 2021.
Our Landlords, now referred to as Residential Rental Providers, together with our Property Management team have a bit of time to acclimatise, however one of the key changes that all Residential Rental Providers need to be aware of refers to compensation to Tenants, now referred to as Renters, when a Residential Rental Provider is selling their investment property.
In short, as from the 29th of March 2021, a Renter is entitled to compensation for any sales inspection that occurs at the rental premises during their tenancy.
WHAT WILL THE INSPECTION COMPENSATION AMOUNT BE?
For the purposes of section 86 (2A) (c) of the Act, the prescribed compensation for each sales inspection is the higher amount of the following:
- One half of the daily amount of rent payable under the residential rental agreement (formerly known as the Lease Agreement) per inspection; OR
- $30.00 per inspection
An example of this is:
- A Renter’s rent is set at $400 per week. At that amount, the daily rate of rent equates to $57.14. Half of the daily rate of $57.14 is $28.57. In this instance, the greater amount as dictated by the above formula is $30.00 therefore the renter must be compensated $30.00 for every sales inspection conducted at the rented premises
- A Renter’s rent is $450 per week. At that amount, the daily rate of rent equates to $64.28. Half of the daily rate of $64.28is $32.14. In this instance, the greater amount as dictated by the above formula is $32.14 therefore the Renter must be compensated $32.14 for every sales inspection conducted at the premises.
Upon the sale of the rented premises a rebate for the total sales inspection compensation amount will be applied as compensation to the Renter.
What constitutes a sales inspection?
A sales inspection is where the selling agent’s purpose of entry is to show the rental premises to prospective buyer/s
Does a building and/or pest inspection count?
No, a building or pest inspection does not constitute a sales inspection.
Does photography and/or videos for advertising purposes count?
No, the sales agent and photographer/videographer may enter the rental premises for marketing purposes and compensation is not required. The sales agent must give written notice to the Renter stating why they wish to enter the rental premises and they must enter the rental premises between the hours of 8am and 6pm and not on public holidays.
How often can sales inspections be conducted?
Sales inspections of rental premises can occur no more than twice a week and for no longer than 1 hour for each of those sales inspections.
Can a Renter refuse entry for the purpose of selling the rental premises?
As long as the Residential Rental Provider or their agent has followed the laws (section 89) and given proper written notice within the minimum written notice period of entering the rental premises, the Renter cannot refuse entry, however if the laws have not been followed, the renter can refuse entry to the Residential Rental Provider and their agent.
If you have further questions relating to the sales inspections process or any other concerns, please contact the First National Neilson Partners Property Management team.