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As you are aware, lessors are able to pass on the full water consumption charges (including bulk water charges) for a rental property to tenants if the following criteria apply:
- The premises are individually metered; and
- The premises are water efficient; and
- The tenancy agreement states that the tenant is responsible for the water consumption at the property.
Concerns can arise as to whether it is the responsibility of the property manager to verify the accuracy or reasonableness of the water meter reading, in circumstances where the tenant or lessor disputes the bill. In this article, we will delineate the scope of property manager’s obligations in relation to the reading of water meters at rental properties.
Whose responsibility is it?
As an investor, you would be familiar with the layout of the Form 1a Entry Condition Report and Form 14a Exit Condition Report. On the first page of both reports, there is a section to record the water meter reading for premises that are individually metered. The inclusion of this section in both the Entry and Exit Condition Reports implies that there is an obligation on property managers to read the water meter during these inspections, or that property managers are by some measure responsible for verifying the accuracy or reasonableness of any reading taken.
Interestingly, the governing legislation, being the Residential Tenancies and Rooming Accommodation Act 2008 (Qld) and the Property Occupations Act 2014(Qld) do not contain any provisions which impose obligations on property managers to read the water meter during inspections.
In addition to this, the operation of clause 7.9 of the Essential Terms and Conditions of the Form 6 Appointment Agreement bolsters the position of agents in this regard. Relevantly, clause 7.9 provides that the lessor of the property acknowledges that the property manager is not a licensed engineer, architect, builder, pool safety certifier or any other type of professional or tradesperson (emphasis added) and is only responsible to report to the owner on matters that are readily apparent on a visual inspection. This clause offers an additional level of protection by denoting that property managers cannot be held responsible for making any assessments as to safety or functionality regarding features of the property, which would require special skill. The key point to be distilled here is that property managers are not responsible for reading water meters at rental properties.
However, as the legislation and appointment agreement is silent in regards to who is in fact responsible, we recommend property managers implement our best practice strategies in order to eliminate any concerns in relation to this issue.
It is our Best Practice Recommendations:
- When entering into a new appointment, we always ensure the lessor of the property is aware that we will not be responsible for reading the water meters at the property;
- We insert a special condition in the POA Form 6 to the effect that Rental Trends will not be responsible for reading the water meters at the property;
- For existing appointments, we ensure that there is clear communication with the lessor so all parties have a full understanding of the scope of our responsibilities regarding the management of the property; and
- We ensure that our owners are fully conversant with all legislative and contractual obligations imposed on us.