Property management is a crucial aspect of the general real estate market. It involves, as the name suggests, managing the day-to-day matters of a particular piece of property. If you run or are thinking about running a property management business, it is crucial to understand the complex web of laws that govern this sector. This will help you streamline your processes and safeguard your reputation and financial security moving forward. This article explores the key laws you need to be aware of and comply with when engaging in real estate property management in Australia.
Why Are There Laws Governing Property Management?
Depending on the scope of services agreed to by the landowners, property managers may conduct a broad range of activities, including:
- conducting inspections and marketing the property;
- choosing and screening tenants;
- negotiating and collecting rent;
- preparing agreements;
- lodging bonds; and
- paying council rates and taxes.
This level of involvement and influence over a property means that, like much of the real estate industry, property management is heavily regulated.
Licensing
It is essential to note that depending on which state and territory you provide property management services, you will likely require a licence to conduct your business. This is the first and most important step in your property management business.
Continue reading this article below the formResidential Tenancies Act
One of the fundamental pieces of law you must be acquainted with is the residential tenancies laws specific to your state or territory. Each state and territory has its version, setting out the rights and obligations of both landlords and tenants. Since you will represent the landlord, you must know what you are obligated to do and what tenants can expect from you.
For example, in New South Wales, before a tenancy agreement is signed, property managers must:
- tell the prospective tenant if the landlord is planning to sell the property;
- tell the prospective tenant if a mortgagee is taking court action to take possession of the property;
- not encourage the prospective tenant to enter the tenancy agreement if the agent knows of a prescribed material fact about the rental property;
- give the prospective tenant the tenant information statement; and
- ensure that the landlord has read and understood the landlord information statement, and sign an acknowledgment of this on the tenancy agreement.
Note this is not an exhaustive list. Property managers may have other specific requirements if the property is a strata property.
Complying with these requirements is essential to legal compliance and establishing a good reputation with landlords and tenants.
Anti-Discrimination Legislation
Discrimination in real estate property management is strictly prohibited under Australian law. Once again, each state and territory has their own specific law. However, generally speaking, it is unlawful to discriminate against tenants or potential tenants based on:
- race;
- gender;
- disability; or
- any other protected characteristics.
Privacy Legislation
Australia has robust privacy laws covering the handling of personal information, including that of tenants and landlords. The Privacy Act 1988 (Cth) and similar state-based laws govern the collection, use, and disclosure of personal information.
As best practice, you should implement internal measures to protect the privacy of your clients, including:
- secure data handling procedures; and
- obtaining informed consent from your clients and tenants for the collection and use of their personal information.
Consumer Protection Legislation
The Australian Consumer Law (ACL) is a key piece of legislation that protects the rights of consumers, including tenants and landlords. It covers issues such as misleading advertising and deceptive conduct. You must ensure you are being truthful and honest in the representations you make. Furthermore, ensure that your advertisements accurately represent the property you manage.
This factsheet provides an overview of a real estate agent’s professional obligations.
Code of Conduct
Most real estate institutes in Australia have their own codes of conduct that property managers must adhere to. These codes typically outline ethical guidelines, standards of practice, and disciplinary procedures.
In specific states, such as New South Wales, there are specific codes of conduct for letting agents of short-term rental accommodations. This specific code, created due to the booming holiday letting industry, has specific details on standards of behaviour and requirements for hosts, guests, booking platforms and letting agents.
Depending on the scope of your business, each state-based regulator and your industry-specific institutes will enforce codes of conduct to govern ethical business practices. Familiarise yourself with these codes, structure your business around adhering to them and consider joining a professional association to stay updated on industry standards.
Key Takeaways
The real estate property management landscape in Australia can feel like a legal maze that requires a deep understanding of numerous pieces of legislation. Whether you are a property manager or someone assisting in this field, compliance is mandatory. Real estate property management is not just about bricks and mortar; it is about people and their homes. Therefore, compliance is the cornerstone of a prosperous and ethical practice in this field.
In addition, legal support is crucial to keep you updated and ensure your documentation and general business structure are compliant. If you need help meeting your obligations, our experienced real estate lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.
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