CPPDSM4016A Monitor and Manage Lease or Tenancy Agreement

NSW Assessment Task

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ASSESSMENT TASK 1 – Multiple Choice Questions 

Please review the questions below and select the most correct answer, eg c or d or a etc

  1. When must the tenant return a copy of the completed Condition Report (which usually accompanies the signed lease or tenancy agreement) to the lessor/agent:
  2. by the end of the month
  3. within 10 days of receiving it
  4. within 7 days of receiving it
  5. Under theResidential Tenancies Act 2010, tenants must be given a copy of what document by the landlord or the landlord’s agent before entering into a residential tenancy agreement?
  6. The renting Guide
  7. New tenant checklist
  8. Condition report
  9. An entry condition report is a record of the condition of the premises at the:-
  10. start of the tenancy
  11. during the tenancy
  12. at the end of the tenancy
  13. When must the tenant return a copy of the completed Entry Condition Report to the lessor/agent?
  14. within 3 days after the day they’re allowed to move in
  15. within 7 days of receiving it
  16. within 5 days of vacating the premises
  17. Three copies of this condition report are filled out and signed by the landlord or the landlord’s agent. What happens next?
  18. before the tenancy begins, the landlord or the landlord’s agent must inspect the residential premises and record the condition of the premises
  19. two copies of the report which have been filled out and signed by the landlord or the landlord’s agent must be given to the tenant before or when the tenant signs the agreement
  20. the landlord or landlord’s agent keeps the third copy
  21. the tenant must inspect the residential premises and complete the tenant section of the condition report
  22. the tenant must return one copy of the completed condition report to the landlord or landlord’s agent within 7 days after receiving it and is to keep the second copy
  23. at or the termination of the tenancy agreement, both the landlord and tenant should complete the copy of the condition report that they retained, indicating the condition of the premises at the end of the tenancy
  24. all of the above
  25. a, c and e only
  26. The maximum bond a lessor/agent can charge is:-
  27. 4 weeks rent if the rent is $500 per week or less
  28. 4 weeks rent
  29. 6 weeks rent if the property is furnished
  30. $1000 if the tenant has a pet
  31. Can a tenant transfer the bond from their previous place to their new place?
  32. yes – there are no conditions attached
  33. yes, but there are some conditions to be met
  34. no
  35. Tenants are required to pay rent in an approved way, this includes payment by :-
  36. cash
  37. cheque
  38. deposit to a financial institution account nominated by the lessor
  39. credit card
  40. an EFTPOS system
  41. deduction from pay, or a pension or other benefit, payable to the landlord/agent
  42. another way agreed on by the lessor and tenant
  43. all of the above
  44. Is it essential a property manager treat tenants with the same level of appropriate rapport they would use when dealing with landlords?
  45. at certain times
  46. no
  47. yes
  48. A tenant must pay the water usage charges for the residential premises, but only if:
  49. the premises are separately metered
  50. the premises contain water efficiency measures
  51. the charges do not exceed the amount payable by the landlord for water used by the tenant
  52. all of the above
  53. a and b only
  54. If a tenant is coming to the end of a fixed term agreement, the tenant and the lessor/agent need to decide whether the tenant will stay on under a new fixed term agreement of periodic agreement or move out. When should this be decided?
  55. after the term has expired
  56. before the term has expired
  57. either of the above
  58. Under a periodic agreement rent may be increased at any time by giving:-
  59. 60 days notice in writing of the increase
  60. 30 days notice in writing of the increase
  61. 90 days notice in writing of the increase
  62. A tenancy agreement may be ended when:
  63. fixed-term agreement has ended and either party doesn’t wish to extend the agreement
  64. the tenant or lessor/agent seeks to end it during a periodic agreement or
  65. the tenant or lessor/agent has not complied with a Tribunal order
  66. all of the above
  67. If a property manager hand delivers a 7 day notice on the 3rd February, on which day can the next action be taken:-
  68. 9th February
  69. 10th February
  70. 11th February

ASSESSMENT TASK 2 

Short Answer Questions – Please answer in 100-200 words (1-2 paragraphs)

1) Explain the meaning of the following residential tenancy agreements:-

  1. a) Fixed term

Fixed term tenancy agreement is created where two parties agree on a single definite length of tenancy. Even though this period is usually 6 or 12 months, it can be for any period as long as the period is fixed. According to section 18 of the Residential Tenancies Act 2010, a fixed term agreement continues to be periodic agreement after the end of the fixed term. In this case the agreement continues to apply as if the fixed term agreement were replaced by a periodic term agreement and on the same terms as immediately before the end of the fixed term.

  1. b) Periodic or continuing agreement

A periodic term agreement is for a recurring period and can continue indefinitely. Even though most periodic tenancies are verbal agreements, they can also be written.

2) When entering into a general tenancy agreement, the lessor/agent and tenant will need to negotiate any special terms. There are 40 mandatory terms in the standard form of tenancy agreement. Answer the following regarding ‘special (or additional) terms’:

  1. i) What is a ‘break fee’ and how are they handled?

A break fee us fixed penalty in a lease, which is charged in the event that a tenant breaks a lease before the end of fixed term period. Nonetheless, where there is no such penalty in the lease, the tenant is still liable to compensate the landlord for any losses incurred.

  1. ii) Can tenants make an agreement to keep pets? How is this recorded in the tenancy agreement?

Yes tenants can make an agreement to keep pets. If a tenant makes such an agreement then, the optional term relating to the restriction of pets should be deleted from the tenancy agreement before it is signed by the tenant.

iii) What other ‘additional terms’ may be written into a tenancy agreement?

Terms which would:

  • require the tenant to have the carpet professionally cleaned, or pay the cost of such cleaning, at the end of the tenancy (except as part of a separate arrangement to allow the tenant to keep a pet on the premises)
  • require the tenant to take out any form of insurance, such as home contents or public liability insurance
  • exempt the landlord, agent or any other person from legal liability for any negligent act or omission
  • require the tenant to pay a higher rent, a penalty or some other form of damages if they breach the agreement
  • give the tenant a reduced rent or rebate for not breaching the agreement or
  • require the tenant to use the services of a particular person or business to carry out their obligations under the agreement, such as a nominated lawn mowing or pool cleaning company.

3) According to the Residential Tenancies Act 2010 while a tenant has use of premises –

  1. a) What must a tenant do?
  • A tenant must not do any of the following:
    • use the residential premises, or cause or permit the premises to be used, for any illegal purpose,
    • cause or permit a nuisance,
    • interfere, or cause or permit any interference, with the reasonable peace, comfort or privacy of any neighbour of the tenant,
    • intentionally or negligently cause or permit any damage to the residential premises,
    • cause or permit a number of persons to reside in the residential premises that exceeds any number specified in the residential tenancy agreement.
  • A tenant must do the following:
    • keep the residential premises in a reasonable state of cleanliness, having regard to the condition of the premises at the commencement of the tenancy,
    • notify the landlord of any damage to the residential premises as soon as practicable after becoming aware of the damage.
  • On giving vacant possession of the residential premises, the tenant must do the following:
    • remove all the tenant’s goods from the residential premises,
    • leave the residential premises as nearly as possible in the same condition, fair wear and tear excepted, and, if there is a condition report, as set out in the condition report applicable to the premises when the agreement was entered into,
    • leave the residential premises in a reasonable state of cleanliness, having regard to the condition of the premises at the commencement of the tenancy,
    • remove or arrange for the removal from the residential premises of all rubbish, having regard to the condition of the premises at the commencement of the tenancy,
    • return to the landlord all keys, and other opening devices or similar devices, provided by the landlord to the tenant.

4) What are the landlord’s (lessor’s or agent’s) obligations to a tenant?

  • A landlord must provide the residential premises in a reasonable state of cleanliness and fit for habitation by the tenant.
  • A landlord must not interfere with the supply of gas, electricity, water, telecommunications services or other services to the residential premises unless the interference is necessary to avoid danger to any person or to enable maintenance or repairs to be carried out.
  • A landlord must comply with the landlord’s statutory obligations relating to the health or safety of the residential premises.

5) When completing an entry condition report, what should the tenant do if they disagree with the lessor/agents entries? Give a response in your own words.

If the tenant disagrees with the agents entries they should indicate that their findings on inspection of the property are not consistent with the findings of the agent on the entry condition report. If for instance there are marks on the walls, while the agent had indicated that the walls were clean, then the tenant should place “N” (NO) in the appropriate column, where the agent had placed “Y” (YES) and comment on the issue. In this case they would place “N” and comment that the walls have marks. Preferably, the tenant should take a photograph of the marks, put a time stamp on the photograph and keep it as evidence just in case a dispute arises at the end of the tenancy period.

6) List the reasons why a lessor may enter the rental premises and what notice must be given.

Entry with consent

  • The landlord/agent, or another person authorised by the landlord, can enter the premises at any time with your consent.

Entry without consent, without notice

  • The landlord/agent, or another person authorised by the landlord, can enter the premises without your consent and without notice, only:
    • in an emergency, or b) to do urgent repairs (see Factsheet 06: Repairs and maintenance), or
    • if the landlord thinks that the premises have been abandoned, or
    • in accordance with an order of the NSW Civil and Administrative Tribunal (NCAT), or
    • if they have serious concern about the health/safety of a person on the premises (after they have first tried to get your consent to enter).

Entry without consent, with notice

  • The landlord/agent, or another person authorised by the landlord, can enter the premises without your consent for certain purposes including inspection of the premises, assessment of the need for repairs and health and safety upgrades, valuation of the premises and exhibition of the of the premises to prospective buyers or tenants. Each of these purposes has a limited frequency and minimum notice that should be given each time the agent/landlord intends to enter the premises.

7) In your own words, explain the rationale of charging a rental bond.

The main rationale for a rental bond is the fact that it acts as security in case the tenant breaches the tenancy agreement. This breach constitutes damages to the rental property, which might cost the landlord a substantial sum of money to return the property to its initial state. Apart from damage to the rental property, the tenant might also fail to meet their financial obligations such as rent and other service charges. As such, the landlord might retain the bond in the event the client is prompted to vacate the property because they are unable to pay rent.

8) Explain the process for refunding the bond when the tenant and the lessor/agent do not agree on how the bond is to be refunded.

  • The tenant can still make a claim if they disagree about the amount of bond to be returned to them. To this end, they should fill in the ‘Claim for Refund of Bond Money’ form with the amount that they want paid and return it to Fair Trading. They do not need the landlord’s/agent’s signature.
  • Fair Trading will give the landlord/agent written notice that the tenant has made a claim. If the landlord/agent does not dispute it, Fair Trading will pay the claim after 14 days.
  • If the landlord/agent does dispute the claim, they must apply to the NSW Civil and Administrative Tribunal (NCAT) within 14 days of receiving the notice and tell Fair Trading in writing that they have done so.
  • The Tribunal will decide how the bond will be paid out.

9) Explain the circumstances in which rent can be increased by the lessor for a:

  1. a) Fixed term agreement

For Fixed-term agreements of more 2 years, a landlord/agent is entitled to increase rent once in any 12-month period. On the other hand, for Fixed-term agreements of 2 years or less, the landlord/agent can only increase the rent if the tenancy agreement sets out the amount of the increase or the method of calculating it. The landlord/agent must however give you 60 days written notice of the rent increase specifying the increased rent and the day from which the increased rent applies. Moreover, if the landlord/agent posts the notice, they must allow an extra 4 working days for delivery. Even if details of the rent increase are set out in the tenancy agreement, the landlord must still provide 60 days written notice before the rent can be increased.

  1. b) Periodic agreement

For periodic agreements, there is no limit to the frequency with which the landlord to permitted to increase rent.

10) Explain why confidentiality is an essential element in property management when dealing with tenants and lessors. Give an answer in your own words.

11) When a tenants fixed term agreement is due to expire, explain what the agent/lessor must do when the tenant and lessor agree to:-

  1. extend the fixed term
  2. stay on under a periodic agreement

When a fixed term agreement ends, if the tenant remains and no new agreement is signed. The lessor/agent can have a periodic agreement from the beginning. In a periodic agreement, the lessor/agent and the tenant must follow the rules set out in the original agreement (or in the prescribed standard agreement if there wasn’t a signed agreement). The rights and obligations under both types of agreements are generally the same. However, there are differences in relation to terminating the tenancy and rent increases.

It should nonetheless be noted that if the lessor fails to have a written agreement in the proper form at the start of a tenancy, penalties can be imposed. Additionally, they will be unable to evict the tenant without a reason or put the rent up during the first 6 months.

  1. enter into a new fixed term agreement

 

12) A landlord or landlord’s agent must not induce a tenant to enter into a residential tenancy agreement by any statement, representation or promise that the landlord or agent knows to be false, misleading or. What type of information must be disclosed?

A landlord or landlord’s agent must disclose the following to the tenant before the tenant enters into the residential tenancy agreement:

  • any proposal to sell the residential premises, if the landlord has prepared a contract for sale of the residential premises,
  • that a mortgagee is taking action for possession of the residential premises, if the mortgagee has commenced proceedings in a court to enforce a mortgage over the premises.

13) List the reasons a tenancy agreement may be ended and what notice is required.

The tenancy agreement might come to an end when the tenant decides to move out before the end of the fixed term, in which case they should give a written notice to the landlord or agent. The notice period required in this scenario will vary depending on the situation.

The tenancy agreement can also be ended at the end of the fixed term period. In this case the tenant needs to give at least 14 days’ notice, which can be given up to and including the last day of the fixed term

The landlord can also notify the tenant of his intention to sell the property during a fixed term. In this case the tenant can end the agreement without having to compensate the landlord for the early termination by giving by giving at least 14 days’ notice. Nonetheless, this is not applicable where the tenant was aware of the prospective sale for which a contract for sale was prepared

The landlord can also serve the tenant with a termination notice after which they should move out at any time before the notice elapses without having to give their own notice. If said notice was occasioned by fact that the fixed term was almost coming to an end, then the tenant will be liable to pay rent until the last day of the fixed term. Otherwise no further rent is payable as soon as the tenant vacates the premises.

14) Explain what the lessor/agent can do if they have good reason to believe that the tenant has abandoned the premises.

The landlord/agent or another person authorised by the landlord can enter the premises without the tenant’s consent and without notice if they have good reason to believe that the premises have been abandoned. However, the landlord/agent must formally end the agreement before they can take possession of the premises and deal with any property left behind by the tenant. In essence it can be concluded that the premises has been abandoned if:

  • rent has not been paid
  • there is a build-up of mail or newspapers still in the mailbox
  • observations of neighbours or others suggest the tenants have abandoned the premises
  • the household goods are absent
  • gas, telephone and electricity services have been disconnected, or
  • the tenant does not respond to attempts to contact them.

 

ASSESSMENT TASK 3 – Case Study 

Clive and Ruth have been renting a property in Emmaville, for 12 months. They vacate the property owing rent and costs for damage to the property. The property manager is instructed by the lessor to recover the arrears and damage costs from the bond.

The property manager attempts to contact the tenants by phone with no success. The property manager then prepares a letter stating the following:-

The tenants owed $1500 which includes:-

  • $500 to patch up holes in 2 walls and will require repainting
  • $300 to replace some kitchen floor tiles and have carpets steam cleaned
  • $300 for cleaning costs
  • $400 outstanding rent

Bond was to be claimed as well as an addition $150 to cover arrears and costs.

You are required to answer the following questions using the scenario above. A minimum of 1 page is required.

  1. Describe the process the property manager must follow in order to claim the bond money and extra costs of repairs

Because Clive and Ruth owe the property manager money, the manager can make a claim against the tenants’ bond. To this end, they will need to fill out a claim form and lodge it with Fair Trading. Alternatively, they can call Fair Trading on 13 32 20 or visit any Fair Trading Centre and ask for the form.

Ideally, the property manager should get the tenants to agree with their claim and sign the form as well. This way, the bond can be paid without delay. If this is not possible, they should lodge the form without the tenants’ signature as soon as possible with Fair Trading and send evidence of the claim to the tenant.

Fair Trading will send a notice to the tenants giving them 14 days to either settle the matter with the property manager or contest the claim by applying to the NSW Civil and Administrative Tribunal. For this reason, the manager should include the tenants’ forwarding address (if known) or other contact details in the claim form.

If the tenants do not apply to the Tribunal, the bond will then be paid out as per the manager’s claim. However, if the tenants apply to the Tribunal the bond will be held by Fair Trading until the dispute is settled. In this case the manager will then need to attend a hearing at the Tribunal and present evidence to back up their claim. If the tenant lodges a claim for a refund first without the manager’s signature, Fair Trading will send the manager a notice advising of the claim. If this occurs, the manager can either try to resolve the issue with the tenant or apply to the Tribunal within 14 days to dispute the claim.

The manager should nonetheless ensure that they notify Fair Trading that they have applied to the Tribunal, so that the bond can be held until after the hearing. If the manager and the tenant reach a different agreement after one of them has lodged a claim, then a new claim form will need to be lodged with Fair Trading with both their signatures. Otherwise, the first claim lodged will be paid out after 14 days. Once the bond has been paid out either the manager or the tenant can still apply to the Tribunal. This can however be done only within 6 months.

If the tenants fail to cooperate, the additional arrears can be recovered from their property through the tribunal.

  1. Using the information above, complete the appropriate application form(s). Assume the agent has taken photos of the damage with the agencies digital camera.

iii. Describe the best way to notify the tenants that further action is being taken.

The manager should check with the neighbours, the tenant’s workplace or try contacting their mobile phone or email address if they have those details. If they have doubts about whether the premises have been abandoned, they can apply to the NSW Civil and Administrative Tribunal. If no doubt exists, they do not need a Tribunal order. They can simply change the locks to secure the premises and deal with any goods that have been left behind.

ASSESSMENT TASK 4 – Role Play 

You are required to write a minimum of 1 page and take on the role of either tenant or lessor/agent, then using the ‘Tips for Resolving Disputes’ – found in Learner resources – try to resolve the following disputes:-

  1. Tenant has not paid the rent on time

As a lessor/agent I would endeavour to find out why the tenant has failed to pay rent on time. If the failure was occasioned by personal reasons or unavoidable circumstances I would give them time to make the payment provided they do not make a habit of it.

  1. Lessor/agent has increased the rent without the proper notice

I would remind the agent that they are required to provide proper notice before deciding to increase the rent and advise them on the proper channels that should be followed towards this end

iii. Tenant has bought a pet after they had signed a Special Term stating ‘no pets allowed’

I would remind the tenant that keeping a pet in the premises constitutes a breach of the tenancy agreement and as such I would advise them to get rid of the pet or give time to look for another property that allows pets. If they opt for the latter, I would service them with a termination notice on account of the breach.

  1. Lessor/agent has entered the backyard to mow the lawn without any prior notice

I will remind the lessor of my right to privacy and the fact I am protected against arbitrary entry by the Residential Tenancies Act 2010. While they are justified to mow the loan, they should only do so with my consent or after they have served me with a notice of the same.

  1. Tenant has damaged the clothes line after trying to lop a branch from a tree in the back yard.

With reference to Entry Condition Report, the would request them to fix the clothes line with immediate effect or advise them that they would have to repair the line before or at the end of their tenancy agreement term failure to which, I would be forced to recover the charges for the repair from their rental bond.

  1. Lessor/agent has not repaired the faulty toilet after being informed it was broken

The lessor is bound by the Residential Tenancies Act 2010 to provide and maintain the premises in reasonable repair. As such, I would remind them of this obligation and request them to repair the toilet. Alternatively I would repair the toilet and furnish the lessor with all the documents detailing the costs I incurred so that he can reimburse me at his earliest convenience.

vii. Tenant has asked another two friends to live in the premises without asking permission from the lessor/agent

As the lessor, I would remind the tenant that accommodating the two friends on a permanent basis is breach of the permitted number of occupants, which is indicated on the tenancy agreement. As such, if the tenant wishes to live with the two friends they should either change the terms of the tenancy agreement, which would most likely attract a higher rental charge or look for another property that would permit their arrangement.

viii. Lessor has not reimbursed tenant for money they have spent on getting a burst water pipe fixed quickly.

I would remind the lessor that they are obliged to pay for the expenses incurred I in repairing the burst water pipe within 14 days of my notice failure to which I would be forced to report the issue to the NSW Civil and Administrative Tribunal (NCAT) within 30 days after the 14 day notice.

  1. Tenant has been playing loud music late into the night and the neighbours are complaining to the lessor/agent

I would advise them not to infringe other people’s enjoyment of their premises in area because it is tantamount to breach of the tenancy agreement. Such behaviour is simply not acceptable even for homeowners. If they failed to heed my advice I would be forced to terminate their tenancy.

  1. Lessor/agent has not fixed the back door lock that is broken

I would remind the lessor that they are obliged to provide and maintain locks or other security devices necessary to keep the premises ‘reasonably’ secure. I would also attempt to express my unrest occasioned by the lack of security in the premises caused by the broken lock. Other than that, I would explain that it was in the best interest of the lessor to replace the lock personally to ensure that no third parties including myself would not have access to the house after the end of my tenancy

 

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