Rental properties - routine gas, electricity and smoke detector inspection frequencies

Home & Living
1

I have a small 1BR rental property in Victoria.

I am still trying to get to the bottom of this, but it looks like Mylo Property Solutions and my managing agent are performing too many safety checks:

The safety checks have been these:
19/1/2022: smoke, gas and electricity checks
<18 month gap>
31/7/2023: gas and smoke checks
<8 month gap>
27/3/2024: elec and smoke checks

It looks like there are too many checks in a short period of time.

The gas and electrical checks should be every 2 years.
The smoke alarm check is every year.

I wonder if there is a conflict of interest, like the Strata insurance issue, where the consumer is being taken advantage of.

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2

You are right that generally smoke detectors need checking at least yearly (year being maximum period between checks), gas and electricity generally at least every two years.

It appears that broadly your property manager is doing this (noting that 18 month gap for smoke detectors is longer than suggested and the 8 months shorter than suggested).

Possibly the question should be asked of the property manager why routine inspections aren’t scheduled closer to the recommended maximum timeframes, rather than being either early or late. It should be something which should be easy to do, assuming they are different tradies which inspect gas, smoke detectors and electricity. If they are the same person, say for gas and smoke, 18 months might be to reduce number of visits (12 months and then 2 years).

I expect there are risks of not carrying out regular inspections when due, both for a landlord and property manager. There could also be insurance implications if there was a claimable event resulting from a fire, gas leak etc and inspections had not been carried out.

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3

It may pay to check your agency agreement and terms of delegation for these checks to be carried out. If one has authorised the agent to do so without evidence of competitive quotes using their preferred business one conclusion. Agency agreements can include the requirement that the owner must be consulted and agree to any such work (authorise) in advance. For some owners it may be appropriate to leave it to the agent. For others they may have a preferred business and pay directly for the inspections.

The sequence of the inspections you quoted is not as one would expect. The gas and electricity may be a lesser cost if concurrent. It was for the first noted but not for the subsequent two. They are as you note both two yearly requirements. The follow up gas after 18 months was 6 months early, and the subsequent electrical 2 months past due.

The following from one well known agent suggests the client is signing up to a fixed price service, with a preauthorisation for up to $200 of additional expenditure is required (extra work) for each area. The service provider/s and the true cost to Harcourts is not listed. One could expect a small single bed studio is less consuming and demanding than a luxury 3 bedroom townhouse. For the service providers engaged the overhead of visiting one strata for one only property, vs multiple properties managed by the one provider should make a price difference. Eyes wide open when signing the agency agreement?
https://www.rataandco.com.au/safety-checks-compliance/

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4

Metropolitan or regional or rural?

Most likely the managing agent is not qualified to perform the routine safety check - and so is dependent on an external party to do the check.

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5

Thanks to everyone for the replies, so far. The property is in metropolitan Melbourne. I have had a response from Mylo. It does not explain why a 2 yearly check was carried out before it was due. I will read it more carefully later. I have asked my agent to explain.

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6

As I understand it 2 years is the maximum. You would be unhappy if they went longer than that but don’t see what is wrong with doing them a bit more frequently. In what way would this be taking advantage of you?

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7

Being charged $319 three times in 24 months, when it should be $319+$97+$319 is first issue. Being charged $319 for the second and third check when they say they have only performed two of three possible checks, which should be $197 each, is the second issue. I could pay for a haircut every week but I would never choose to. I calculate that I have been charged $957 when $735 is what I should have been charged in that time.

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8

I would like to clarify your situation. I understand the following from your post;
. You are the landlord and not the tenant.
. Your managing agent organised the checks.
. Your managing agent organised the contractor to do the checks.

Have you been provided invoices from the contractor to see what they are charging, and what they carried out?

Have you asked for quotes from other firms to carry out the necessary checks? If you do a browser search you may find cheaper prices.

Smoke detector checks must be carried out annually, while electricity and gas safety checks only need to be carried out two yearly. So unless there is an emergency repair required, your checks should be on a rolling schedule: Year one, the smoke alarm(s) should be checked. Year two, the smoke, electricity, and gas safety should be checked. The following year is back to the year one check
. etc.

I suggest you talk to your managing agent and sort this out.

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9

A while ago when I was landlord, I made it absolutely clear to the managing agent that ALL activities regarding repairs or checks HAD to be approved by me first.

So if a compliance check was to be done and arranged by them when not due, my answer would have been no way.

And all documentation and invoices regarding work done, especially electrical and gas which have compliance implications, would be sent to me. There are tax implications, insurance issues. My property, my responsibility.

The agent is just there to find a tennant, and collect the rent.

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10

My smoke alarm is checked annually.

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11

Of course they are. :roll_eyes:
But if one is to ask an agent why they are there?

Some agents are less able than others. None in our experience are set and forget. Although one can see how it goes.

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12

Obviously it is up to you what you use the agent for, including not using one at all.

However an agent can also

  • provide up-to-date knowledge in an increasingly complex and litigious regulatory landscape
  • provide advice on what market rent is for your property via the rest of their rent roll and via comparable listings with other agents in the area
  • act as an intermediary in sometimes awkward conversations about rent increases.

Another consideration is your proximity as a landlord to the property. Let’s say you go overseas for a couple of years, leaving your place rented out. Even apart from the timezones, in that scenario you probably want to delegate more than what you have said. Similar but less severe considerations would apply if interstate or otherwise distant.

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13

Quite right. My circumstances were that I had bought and lived in the home so knew how to fix things when needed. Lived close by, so could deal with most issues in a timely manner when the tennant had a problem.

But my point is that the property manager worked for me. I paid them a fee to do the job I wanted them to do. And that did not include calling out service people at hundreds of dollars a time when the tennant complained about broken hot water service (relight the pilot flame) or oven broken (replace the globe).

To me having checks ordered when not required smacks of over-servicing and I would be questioning what sort of arrangement the property manager has with the company doing the inspections. It is not uncommon for managers to have their preferred list of service people, and have little consideration for costs to the owner. They are not the ones paying.

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14

Admirable, however in the examples for Victoria there are stipulations on who is required to perform the inspections. There are also professional services who come around and check smoke alarms - another service the agent is likely to argue cannot be performed by the owner. Reality is most owners (landlords) choose to keep at arms distance. It’s last century since I rented paying directly the owner of the block in Unit no 1. YMMV.

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15

It is not disputed that certain work has to be done by licenced people, and appropriate certificates issued. That is not the issue.

The OP’s issue was that checks were being done when not required. At considerable expense to the owner.

So who is responsible for commissioning these unneccessary compliance checks? The property manager who doesn’t know the law, or doesn’t care about their customer the owner, or are they getting a kickback or fee everytime it happens?

It needs to be questioned. And if I owned the property, I would be asking some serious questions. But then I was a hands on landlord, concerned about my property, and my tennants, and my expenses.

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16

I’m aware that real estate agents/property managers have their preferred ‘service companies’ (which can be exit/bond cleaners, handymen, etc.) that can be more expensive than other companies and the agency gets a kickback by using and recommending them to vacating tenants. It’s the agency making money from any source they can, be it owner or tenant.

17

Sure. Premium price and high volume gets priority service though.

18

I had two investment properties in Victoria.

Compliance checks are mandatory.

Smoke alarms must be checked every 12 months.
Gas and electricity safety checks must be completed every 24 months.

I sold Property 1, last year.

While reviewing my transactions I noticed the following issue.

I had organised a compliance checking firm to carry out the checks.
They had and have a subscription where you sign up for the safety checks to be performed for a minimum of 2 years.
“Please note a minimum two year commitment on any subscription”
The website says “$290 per year (min 2 years)”

For Property 1, I noticed the following:

The first check of Smoke alarm, Gas, Electricity, was performed in January 2022.
The second GAS check was performed after 18 months, not 24 months.
The second SMOKE check was performed after 18 months, not 12 months.
The second ELECTRIC check was performed after 26 months, not 24 months.

GAS and ELECTRIC are now being performed at different times when I want them at the same time.

Therefore, I have cancelled the arrangement for both of my properties.

I am now getting chased for the invoice for the second year for Property 2. They have not performed any checks in year 2, I cancelled it before that did any work.

The invoice for property 2 has this text:
-Balance of safety inspection payment as per agreement.
2nd installment of 2 years subscription, due to safety check services are no longer required.

The compliance provider has stated this in an email:
“Basically, the Year One gas, smoke and electricity check service (completed on xxx) is priced at $580 plus GST, but to assist Rental Providers with cash flow, we divide our total cost into 2 annual payments. Even if someone sells their property in the meantime or proceeds with another safety check provider, they are still required to pay the balance of the inspections that were done in year 1.”

***Please note that our full fee is split across two years and you are not paying for checks not completed but the balance of year 1

$580 for one year compliance checks is very expensive. I would not choose that price for one year when there are many providers that are much cheaper.
The website says “$290 per year (min 2 years)” - This makes it look like the cost is $290 per safety check, this is competitive. $580 is not competitive.

So, I have two issues:

  1. Checks were not carried out at the right times, which would cost me more as being carried out 6 months early means the next one is due too soon.
  2. The advertising was misleading - I would never choose $580+GST for a single year check. I thought it was $290 per instance of checking.

Can I refuse to pay the second year balance for property 2 that they are demanding?
Any advice on what the best option is would be appreciated.

19

You have indicated that

This suggests the minimum contractual commitment is for 2 years, at $290 per year. This would be a minimum commitment of $580.

Whether there is an out for you will be dependent on the contractual obligations in place at the time you accepted the services. It might be worth gaining legal advice to whether you have obligations to meet your contractual obligations relating to a minimum 2 year subscription (or total financial liability of $580).

This is what is called a ‘red herring’ in relation to whether you are required to meet a minimum 2 year subscription. It is unrelated to the subscription. It appears you tried to cancel the subscription early because you sold the property, not because the service was unsatisfactory.

It is a bit like going on a mobile phone contract, finding after 12 months of a 2 year contract, you no longer needed the phone. So you tried to cancel it. On finding it can’t be cancelled, you then say the mobiles service was rubbish and this supports your claim that it should be cancelled. It usually doesn’t work that way.

20

It appears you bought a $580 one year inspection program billed and payable as a 2-year installment plan. Review your subscription contract and post what you did purchase if different from their statement claim

My layman’s advice is, if your contract subscription T&C is as they stated, pay their invoice and write it off as an educational experience to be more diligent in reading contracts and subscriptions T&Cs..

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