When viewing a rental property, what questions need to be answered before signing the tenancy agreement? What is the main reason why tenancies fail?
Rental Application in Three Steps
How do Renters get what they want?
Renter’s Due Diligence —what is the deal?
The term Due Diligence is commonly used when evaluating and preparing a decision due to be made for instance when buying a house, business, or doing some research before signing a contract. Also for signing a tenancy contract it makes sense to gather information about the agent/landlord, renter’s rights and of course about the chosen rental home. Whatever is important there is no better time to sort it out before signing a tenancy.
It happens all the time that renters signed a tenancy only to find out that the chosen home wasn’t suitable for them. For example I visited a family that settled in Wellington by now a year ago. They had chosen a nice rental home on a hillside with views, pretty new built in open plan design, etc. The first winter was a shocker, freezing cold despite high power bills, lots of condensation on single glazed windows and ingress of moisture damaged personal belongings in the garage. The letting agent promised to get the owner involved, but never did and the subsequent dispute ended the tenancy.
Could that situation and related costs have been avoided? YES — with proper due diligence on house and landlord. And here are some tips:
Due diligence in three steps
Amazingly people spending more time shopping than doing due diligence on a rental property they want to call home. So, what should you do? Well, you rent for good reasons, right? Translate these reasons into three steps:
1. View the property (size, location, conditions) and to launch your Tenancy Application.
2. Ask for everything that is important to you such as expected heating costs and expenses not covered by the rent, contract conditions, partners on the contract, etc
3. Reference check (background check) on the agent/landlord, what do people say and what information is available?
The Internet is for savvy renters a time effective source for being prepared and before spending time viewing the rental property.
Agent or landlord—any difference?
Based on experiences people have got preferences. But be clear about you rent the landlord’s property. Not having access to the property owner turns often out as disadvantage. That is why when dealing with an agent, I would try to get the landlord as second person onto the tenancy agreement. The difference - the quality of service depends on your contact partner.
Under difficult circumstances the agent tends to finger point while liabilities always lay with the property owner. However, the quality of services (you pay for) should not depend on the person who signed the tenancy.
Reason why tenancies fail
As it turned out in the initial story the house was misrepresented by the letting agent and renters made an emotionally driven decision when signing the tenancy. Later addressed problems have not been rectified, but also tenants did not exercise their rights e.g. sending a ten days notice for repairs and remedial work.
That is why it comes handy having direct access to the property owner (Landlord). Maintaining good relationships between parties is important to resolve issues before they grow into a problem. So, communicate well and be informed!
House Viewing—what questions would you ask?
How long will the property be available for rent?
Consider this question as the most important question of all, because legally the tenancy can be terminated at any point of time (know about the difference fixed or periodic tenancy contract). If the landlord/agent has confirmed the availability for a certain time frame, and serves you with a note to end the tenancy, he would breach the arrangement made. If you are bargaining for a long-term tenancy, make sure that the tenancy contract is reflecting your position.
What expenses are not covered by rents?
Metered services are normally not included in rents like electricity, hot water in apartments, water charges in properties with a water-meter, lawn mowing service, parking and similar.
What are the expected costs for heating?
Be knowledgeable about radiant heat (you feel warmth on your skin exposed to the heat source, sun or fire) and/or convection heat (air circulation). As seen in this article some heat sources are not suitable for houses with bad heat retention and others cost a fortune to run. Be aware of the specific with heat-pumps.
Has the rental shared facilities & who is responsible for housekeeping?
Think of shared drive ways, laundry, parking
Are any rules or policies attached to the contract?
House rules, body corporate rules, pet policies, regulated parking and cross-lease arrangements are common.
When viewing a rental property, try to imaging the impact of noisy neighbours on your lifestyle. When in doubt, ask for a confirmation. If you don’t ask the agent won’t disclose anything to you.
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Klauster Properties Ltd - Renter’s Blog
Rent or Own - Decision at some stage in life?
Renter’s Blog lead to a real person, IT professional, investor, landlord and business owner with interests in sharing experiences. Life is a dream with a deadline, happiness comes from making the right choices and having realistic expectations.
Confession: I have been a happy renter for more than 25 years before buying a family home and later becoming involved in property investments and developments.
I used to live in apartments or rental homes, worked in many different countries and experienced different housing standards and renting cultures. I would love to see a social and legal frame work around housing policies that supports renters and landlords alike.