It's time to get it right

Do you understand your rights and obligations regarding a final property inspection? Does the tenant need to be present? What does the final property condition report need to contain? If you want to avoid disputes and potentially save time and money, read on.

You are entitled to have your property returned to you in a clean and undamaged condition at the end of a tenancy. However, remember your tenant is not responsible for ‘fair wear and tear’.

As soon as possible after the end of the tenancy, and in any event within 14 days, you must conduct a final inspection of the property, prepare a final property condition report describing the condition of the property and provide a copy to the tenant.

You must give the tenant a reasonable opportunity to be present at the final inspection. It is in the best interests of both parties to undertake a joint inspection at the time your tenant moves out and to arrange for the return of the keys.

Using the Form 1 property condition report prepared at the start of the tenancy, compare the condition of each item with the original details and discuss any problems such as breakages, items missing etc. 

Work out any outstanding liabilities of your tenant such as:

• rent arrears;
• outstanding water, gas and electricity bills;
• cleaning costs (if the property was not left in a clean condition); or
• damage to the property and/or contents belonging to you.   

Costing repairs or additional cleaning

If your tenant has not cleaned the property to your reasonable satisfaction, or it needs minor repairs, you may undertake the work yourself. However, if you decide to repair or clean the property yourself you may only claim for out-of-pocket expenses, such as cleaning materials. You cannot charge for your own time, and should simply consider the time you spend part of your own responsibilities in managing your rental investment.

Your tenants are liable to compensate you for any wilful or neglectful damage they may have caused. However, unless your tenant has totally destroyed your fixtures or fittings, it is sometimes difficult to work out an amount to claim for damage to contents. If you can reasonably repair the damage, you may only charge the repair costs.

It is much more difficult to assess burn marks or stains that you cannot remove, as they depend on a number of individual factors, including the age of the property and the size and location of the damage.

In most situations, it is better to negotiate with your tenant a sum of money to be deducted from the bond as compensation.

Sometimes, carpet damage is so severe you may need to replace it. In such a case, your tenants would be liable to pay for replacing the damaged carpet with one of similar quality to the original. Of course, you cannot change ‘new for old’ and you must also make allowance for depreciation. Contact the Australian Taxation Office to obtain help in calculating depreciation.

Make every effort to agree with your outgoing tenants the amount of any deductions from the security bond. In the event of a disagreement, parties should try to compromise if possible. Otherwise, the disposal of the bond will need to be resolved in the Magistrate’s Court.

Your tenant is responsible for returning all sets of keys you provided them at the start of the tenancy. If they don’t return keys, you may hold the tenant responsible for the cost of changing the locks or charge rent until the keys are returned.

You can find further information on your rights and responsibilities as a landlord on the property renting guides and videos page on our website.  Another useful resource for you is the online publication Investment property ownership.

Important: From 3 July 2017, it  has been compulsory to use Form 19 Notice of proposed entry for those circumstances, where you may enter the rental  premises. For further information visit our Privacy and entry rights for rental properties page.