SALES INSPECTION COMPENSATION
The new updates to the Residential Tenancies Regulations 2021 do not come into effect until the end of March 2021, so our landlords, together with our Property Management team have a bit of time to acclimatise, however one of the changes that all landlords need to be aware of refers to compensation to tenants when a landlord is selling their investment property.
In short, from the 29th of March 2021, a renter will be entitled to compensation for any sales inspection that occurs at the property 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 per inspection; OR
- $30.00 per inspection
- A renters rent is set at $400per 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 tenant must be compensated $30.00 for every sales inspection conducted at the rented premises
- A renters rent is $450per week. At that amount, the daily rate of rent equates to $64.28. Half of the daily rate of $64.28 is $32.14. In this instance, the greater amount as dictated by the above formula is $32.14 therefore the tenant must be compensated $32.14 for every sales inspection conducted at the premises
First National Neilson Partners are currently awaiting further advice as to how tenants must be compensated.
WHAT DOES INSPECTION COMPENSATION MEAN FOR LANDLORDS?
Can a landlord provide a rent reduction, or must they provide a cashback refund?
How does the compensation get provided in time? In line with the rent payment schedule or in a lump sum once an unconditional sale is in place?
What constitutes a sales inspection? Does a building and/or pest inspection count?
As always, your First National Neilson Partners Property Management team will provide clarification as it comes to light though in the meantime please feel free to contact us should you have concerns.