The Central Coast and Sydney has been lashed with some serious thunder storms this summer causing havoc and destruction to hundreds of businesses and homes. Blackouts seem the norm and after a stinking hot day its almost guaranteed a spectacular electrical storm will follow.
Are you a landlord and your investment property has been damaged from a storm or natural disaster? Although we can’t stop a storm from hitting, we can be prepared and aware of the next steps ii damage is caused.
So what happens if you are a landlord and your investment property has been affected by a Natural disaster such as flood or a fire and is now partially or totally uninhabitable?
What can you and your tenant do if the property is partly uninhabitable.
If the property is only partly uninhabitable your tenant may make the decision to stay in the property while the repairs are being carried out. This should only be considered if the damage is relatively minor and there is no ongoing safety risk.
Regardless of whether they move out temporarily or continue to live in the partially damaged property it is your responsibility for maintaining the property, including cleaning or clearing any debris caused by a storm, fire or flood. The rent may need to be reduced. The level of rent payable will depend on the extent of the damage and the amount of use they have of the property. Any agreement in these situations should be put in writing, including how long and how much the rent will be reduced.
On the other hand if the property is totally uninhabitable after a natural disaster, what options do you and your tenant have to end the tenancy?
The tenancy agreement does not automatically end if a rental property becomes uninhabitable after a natural disaster. You will need to discuss this with your tenant and come to an agreement about the tenancy.
Either party can give a termination notice in writing to end the tenancy. The notice, once served, can take effect immediately or can specify a later date. If the tenancy is ended permanently, no rent is payable from the date of the notice. Any rent already paid in advance must be fully refunded.
Another option is for the tenant to move out temporarily and return once the property is liveable again. No rent is payable during this period. If appropriate, both parties can also decide to formally end the agreement and re-sign a new agreement after the repairs are complete. The tenant should be aware that in this scenario a higher rent could be included in the new agreement.
How quickly do you need to make repairs to the property after a natural disaster?
There are a number of factors to consider when deciding how quickly repairs should occur after a natural disaster. The first step is to assess the extent of the damage and the repairs needed. Your Agent should perform an inspection of the property as soon as it is safe to do so and document the repairs needed.
Preferably your tenant should be present for this inspection as this will give you the opportunity to discuss the time frames needed to perform the repairs. Generally, damage caused by a serious storm, fire or flood are considered to be urgent and repairs should be completed as soon as possible.
However, you should keep in mind that the demand for qualified tradespeople may be limited after a natural disaster, which will affect the time frames for repairs.
In the case of a natural disaster, how much notice must I give my tenant to access the property for repairs?
It depends on the urgency of the repairs. If the repairs are considered to be urgent, then a notice period does not apply and you can organise for repairs to be done. Damage caused by a serious storm, fire or flood are usually considered to be urgent repairs.
If the repairs are deemed to be non-urgent then a minimum notice period of two days applies. In some instances it may be in your tenant’s best interest to agree on a shorter notice period in order to get the repairs completed sooner.
If you property has been affected by Serious Flooding or Fire, what are your responsibilities to disclose this information in the future
If you are aware of it, then you are required to tell any prospective tenant about flooding or fire which has occurred. This applies where the rental premise was subject to flooding or bushfire in the five years prior to entering into a tenancy agreement.