Friday, October 12, 2012

Here come the waterworks…

The Government of South Australia earlier this year released the latest fact sheet on water pricing from SA Water with increases that became effective as of 1st July. They are charging us more to invest in critical water security infrastructure ensuring safe, clean and reliable drinking water into the future but right now its just leaving a bigger hole in our pockets!
For landlords it’s the optimal time to review the water charges you can pass onto your tenants to minimize your own hip pocket.
A landlord may by agreement, pass any part or the whole of the charges for the usage of water to
the tenant (including the water supply charge) this is dependent on if there is a shared meter. Please note sewerage charges and the River Murray levy are always the responsibility of the
Water charges that can be passed on to tenants will vary depending on the property. Firstly you need to find out if your property has a separate meter, detached homes will have a separate meter, but typically units and apartments will have shared water meters. “The lack of a separate water meter does not preclude the landlord from passing on water usage charges. However, the lease must clearly stipulate how the water usage charge is to be calculated and this calculation must be seen to be fair and just by the tenant. A percentage of the water usage based on the number of properties and number of tenants may be considered reasonable. If water charges are not clearly written into the agreement or the agreement is seen to be unfair by the tenant then the tenant has the option to apply to the Residential Tenancies Tribunal for an order precluding payment of water usage charges on the grounds that the terms of the lease are harsh and unconscionable. An alternative to passing on water usage charges is to take into account water costs when setting the rental amount.”(Office of Consumer & Business Affairs, 2012)
If you are unsure whether your property has a shared meter check your latest water bill from SA water .
Once you have determined if you can charge for water usage you can decide on what charges if any you want to pass onto the tenant. Some options are charge no water usage, usage over & above annual allowances stipulated RTA 1995, all water usage; all water and supply charges, the supply charge can be added to any of these options or passed on as a quarterly charge.
The Office of Consumer & Business Affairs (OCBA) suggest that when considering what charges to pass onto the tenant to consider the following:
·         How many people live in the premise?
·         Are there gardens or lawns that the landlord wants watered?
·         Is there a pool or other special items that use a lot of water?
·         Is the premise fitted with water saving devices such as dual flush toilets & watering systems?
·         If you want to keep in top condition and it is a big garden, your better off to pay some of the water.
To avoid disputes about water ensure the following:
·         The lease clearly outlines the method by which charges will be forwarded
·         The tenant understands and agrees with  the method of water charging
·         The tenant understands their responsibility to notify the landlord/agent of maintenance issues i.e. leaking taps
·         Water charges are forwarded to the tenant promptly.

1 comment:

Perth property said...

Such policies will introduce some extra burden on landlords. A Property manager can help landlords in the regard.