With some states and territories changing their legislation to allow tenants to make ‘minor modifications’ to the property they are leasing in order to make it feel more like home – without landlord consent in some cases – what can you, as a property manager, do to protect your landlords in the event that a so-called ‘minor modification’ goes too far?
Before the legislation changes, any modification to a rental property, needed to be approved by the landlord. Any unauthorised changes were considered ‘tenant-related damage’ by landlord insurance providers. The damage varied from minor, such as picture hooks being nailed into walls, to major, such as walls painted and building works. But with legislation allowing for certain minor modifications to be made and landlords not permitted to unreasonably withhold consent in some states and territories, the door is wide open for confusion and grey areas.
What are minor modifications?
Minor modifications to a rental property include things like hanging artwork using picture hooks, child safety measures such as securing furniture to the wall, installing temporary window treatments, changing the garden and modifications for safety, security, disability, energy efficiency and telecommunications access.
Click on the link below to see the minor modification legislation that applies in your state or territory (Note: the legislation has not been amended in some parts of Australia or may be under review):
- New South Wales
- Australian Capital Territory
- Western Australia
- Northern Territory
Where it gets tricky
Before the amendments were introduced, any modification needed landlord approval. So, any intentional damage to a property caused by an unauthorised modification may have been covered by landlord insurance, at the discretion of the insurer.
Now, where legislation has been amended to allow for modifications where landlord consent is not necessarily required, the modification is unlikely to be considered intentional damage, even if the landlord believes it is. However, the landlord would have grounds to make a claim if the property is not returned in acceptable condition on termination of the lease. For example, if the tenant installs wall anchors and child safety gates, they must remove them and repair any damage caused in the removal process before vacating the premises.
It becomes a grey area when a minor modification leads to accidental damage. For instance, let’s say a tenant installs a furniture anchor to the wall for child safety (an allowable minor modification) and accidentally creates a hole in the wall with the hammer, damaging electrical wiring behind the wall in the process. Who is liable in this instance? We’re sure you can see how intentional damage has become a bit of a grey area.
The best advice you can give your landlords is to ensure they are aware of the updated legislation and check their insurance cover carefully in case they need to modify their policy or seek another provider that offers greater flexibility.